CEO Lee Jae-woong Sentenced to Prison... Will Tada Ultimately Be Hindered by 'Illegality'?

Attention Focused on Whether the Tada Ban Law Passes the National Assembly

Lee Jae-woong (right), CEO of Socar, and Park Jae-wook, CEO of VCNC, are entering the courtroom to attend the first trial sentencing hearing disputing the illegality of 'Tada' at the Seoul Central District Court in Seocho-gu, Seoul on the 10th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Jin-gyu Lee] The prosecution has classified the van-hailing service 'Tada' as illegal and requested a prison sentence for Lee Jae-woong, CEO of Socar, putting Tada at risk of being shackled by the illegal label. Furthermore, with the Passenger Transport Service Act amendment, also known as the 'Tada Ban Law,' likely to pass in the February extraordinary session of the National Assembly, Tada's future is shrouded in uncertainty.

On the 10th, during the sentencing hearing, the prosecution requested a one-year prison sentence for CEO Lee and Park Jae-wook, CEO of VCNC. Additionally, fines of 20 million won each were requested for the corporate entities Socar and VCNC.

During the sentencing hearing, the prosecution pointed out, "Tada customers perceive that they are using a call taxi service, not that they have signed a lease contract with Socar and rented an 11-seater Carnival," adding, "In conclusion, Tada corresponds to multi-passenger call taxi operations, i.e., paid passenger transport, and cannot be considered a car rental business."

If the prosecution's argument is accepted, Tada would become an illegal service that cannot operate domestically. CEO Lee and Tada have argued that Tada's operation is legal based on an exception clause for driver mediation by rental car operators. The current enforcement decree of the Passenger Transport Service Act exceptionally allows driver mediation for 11- to 15-seater vans. The legality of Tada's business is expected to be determined by future court rulings.

So far, the startup industry has criticized that domestic innovation industries are regressing due to regulations as Tada is being pushed into illegality. Following the prosecution's request for a prison sentence, some voices have expressed concerns that mobility services in Korea may find it difficult to grow freely.

Meanwhile, with the ruling and opposition parties agreeing to hold the February extraordinary session of the National Assembly, the possibility of the Passenger Transport Service Act amendment passing the plenary session has increased. Last month on the 9th, the submission of the amendment to the Passenger Transport Service Act was postponed after failing to be listed in the National Assembly's Legislation and Judiciary Committee. On the 7th, Park Hong-geun, a member of the Democratic Party of Korea, emphasized, "The Passenger Transport Service Act amendment I proposed is not the Tada Ban Law but a Taxi Innovation Law," adding, "The Passenger Transport Service Act currently pending in the Legislation and Judiciary Committee must be passed during this extraordinary session."

In response, CEO Lee criticized on his Facebook, "What is the reason or justification for banning Tada for taxi innovation?" and questioned, "Is there no interest in public convenience, innovative growth, job creation, or economic vitality, but only in expanding the interests of some large corporations or taxi operators?"

This content was produced with the assistance of AI translation services.