The Frustration of 'Tada'... From a Spectacular Debut to Suspension

Declaration of Complete Service Suspension After 1 Year and 5 Months

[Asia Economy Reporter Buaeri] The rental car-based ride-hailing service 'Tada' has come to a halt. With the amendment to the Passenger Transport Service Act (Passenger Act), known as the 'Tada Prohibition Law,' passing the National Assembly's Legislation and Judiciary Committee on the 4th, Tada officially declared that it will "suspend the Basic service."

Launched in October 2018, 'Tada' was a rental car-based transportation service that sent an 11-passenger van when a passenger called a car via an application. It gained popularity and praise for its comfortable and spacious vehicles and a system with no ride refusals. Starting with 300 vehicles, Tada's fleet quickly expanded to 1,500 vehicles.

However, what seemed to be a smooth journey for Tada faced adversity starting in February last year when conflicts with the taxi industry began. The taxi industry claimed that Tada operated without the necessary licenses for transportation business, violating Article 4 of the Passenger Act, and abused Enforcement Decree Article 18 of the Passenger Act, which was created to promote tourism and states that "a person renting a van with 11 to 15 seats may arrange a driver for the rental vehicle."

Eventually, the Seoul Private Taxi Association filed a complaint with the prosecution in February last year against Lee Jae-woong, CEO of Tada's parent company Socar, and Park Jae-wook, CEO of the operating company VCNC. The conflict continued with incidents such as taxi drivers self-immolating and large-scale protests demanding Tada's expulsion.

As the conflict persisted, the Ministry of Land, Infrastructure and Transport stepped in to mediate. In July last year, the ministry announced a 'Taxi System Reform Plan,' turning the conflict into a new confrontation between Tada and the government. The reform plan centered on allowing platform operators to operate passenger transport services within the permitted total volume if they pay contributions to the government and obtain licenses. Tada opposed this, citing significant uncertainty.

Later, in October last year, the ruling Democratic Party also proposed an amendment to the Passenger Act restricting Tada's business grounds, stirring up controversy once again. The amendment, Article 34-2, proposed by Democratic Party lawmaker Park Hong-geun, allows operators to arrange drivers only when renting 11-15 passenger vehicles for tourism purposes for more than six hours or when the rental and return locations are airports or ports. Lee Jae-woong called this the 'Tada Prohibition Law' and waged a public opinion battle.

On the 29th of last month, the Seoul Central District Court acquitted Lee and Park, seemingly turning the tide. However, the Ministry of Land, Infrastructure and Transport then introduced a 'revision card' specifying rental cars in Article 49-2, and after twists and turns, the amendment to the Passenger Act ultimately passed the National Assembly's Legislation and Judiciary Committee.

Immediately after the amendment passed the committee, CEO Park stated, "Tada has done its best over the past one year and five months as a legal service to create a happier ecosystem together for safer mobility for 1.72 million citizens, better jobs for 12,000 drivers, and better earnings for taxi drivers." He added, "Now, according to the judgment of the legislative body, Tada will soon suspend the Basic service."

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