Korea’s surviving ride-hailing Tada on the brink of being outlawed by a revised bill

2019.11.28 14:01:53 | 2019.11.28 14:03:01

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South Korea’s rental van-hailing service Tada has hit yet another snag after indictment of its executives and may be forced to suspend its fledgling business, with the ruling party out to revise the vehicle law that could outlaw vans from carrying passengers beyond tour purpose.

Lee Jae-woong, chief executive of the car-sharing platform SoCar, which owns Tada operator Value Creators & Company (VCNC), on Wednesday criticized the proposed move to revise the country’s transportation law in a way that could significantly limit the business scope of Tada.

He urged lawmakers “to create a law that values the benefit of the public and the future of industry instead of rushing to pass a bill, which sides only with the taxi industry and large enterprises.” He stressed the revision in passenger transportation act should be made after careful review, as he accused National Assembly members are rushing to pass the bill within this year without full discussion.

The transportation committee of the National Assembly on Monday started its discussion on the proposal to revise the current passenger transportation law, which allows rental vans with 11 to 15 seats to be legally leased with a driver. Due to the fierce opposition from the local taxi industry against Tada service, the country’s lawmakers have proposed a revision in the law to restrict such passenger transportation service under strict conditions. If the parliament passes the revision, Tada service would be strictly limited to tour services with each van entitled to operate for six or longer hours only. Tada fears this would literally put it out of business.

The transportation committee did not put the revision proposal on vote yet but the time is running out fast for Tada as this year’s regular session of the National Assembly is due to close on Dec. 9.

“Tada does not cause harm to the local taxi industry,” Lee protested as the number of private taxi services last month reached record high of 692, which is up 8 percent from a year earlier and 15 percent from two years earlier.

Lee and another executive face trial after the prosecution found the van-hailing service “illegal” as rented cars cannot carry passengers for commuting, jeopardizing the sole surviving car-sharing service in the face of die-hard taxi industry. Uber and Kakao Mobility all had to fold their businesses before they could take off.

By Oh Dae-seok, Hong Sung-yong, Lee Seok-hee, and Cho Jeehyun

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