Kim Hyun-mi, "'Tada Ban Law' Is Not True"... "Tada Can Operate If Platform Registration Is Completed"

▲ On the 6th, Kim Hyun-mi, Minister of Land, Infrastructure and Transport, holds a press briefing on the amendment to the Passenger Transport Service Act at the Sejong Government Complex (Photo by Ministry of Land, Infrastructure and Transport)

[Asia Economy Reporter Lee Chun-hee] "There is no need to complicate the law just to ban 'Tada'"

On the 6th, Kim Hyun-mi, Minister of Land, Infrastructure and Transport, held a meeting with the Ministry of Land press corps at the Sejong Government Complex and said that the purpose of the recent amendment to the Passenger Transport Service Act is fundamentally "to completely create a new law and introduce a new platform business." She explained that if the intention was merely to ban the Tada service, it would have been sufficient to remove related provisions such as Article 34, Paragraph 2 of the Passenger Transport Service Act, which Tada cited as the basis for introducing the service. This was a direct rebuttal to Tada's claim of the so-called 'Tada Ban Law.'

VCNC, the operator of Tada, has argued since the early days of service introduction that the Tada service is legal based on Article 34, Paragraph 2 of the Passenger Transport Service Act and related enforcement decrees, which specify that "it is possible for a car rental business operator to arrange a driver for a passenger vehicle with a seating capacity of 11 to 15."

However, this claim by Tada will lose its validity once the amendment to the Passenger Transport Service Act, which passed the National Assembly's Legislation and Judiciary Committee on the 4th, is enacted. The bill adds a clause to Article 49, Paragraph 2, which defines types of passenger car transport platform businesses, including "cases where a car rental business operator rents a vehicle for rental business use" under the platform transport business category, thereby allowing a 'rent-a-car' type business. However, in Tada's case, it must obtain a platform transport business permit to continue its current operations. This bill is expected to pass the plenary session of the National Assembly on the afternoon of the 6th.

Tada strongly criticized the amendment as the 'Tada Ban Law' and announced that it would suspend its Basic service. Park Jae-wook, CEO of VCNC, the operator of Tada, lamented, "A service that an entrepreneur and about 100 colleagues devoted nearly two years of their lives and careers to has been dashed by a few words from the Ministry of Land and some lawmakers."

According to the amendment, Tada's rent-a-car usage method will be banned 1 year and 6 months after the law is promulgated. If the law passes on the 6th, this is expected to be around September next year. Regarding this, Minister Kim said, "Tada can operate for one and a half years," and "if they register as a platform transport business during that period, they can continue to operate." He also rebutted Tada's claims about contribution fees, saying, "Other countries also require contribution fees when operating in the mobility market," and "Korean platform companies have previously stated they would pay contribution fees during discussions, and Tada itself has said it would pay contribution fees."

Regarding the high public support for Tada due to the basic decline in taxi service quality, he explained, "Company taxis are due to the daily quota system," and "individual taxis have become aged and have poor reviews," adding that it is possible to improve taxi service quality through institutional reforms. The Ministry of Land has previously proposed alternatives for improving taxi service quality, such as establishing a monthly salary system and full management system for taxis, and easing qualification requirements for individual taxi license transfers. Minister Kim particularly viewed the easing of individual taxi license transfer qualifications as a way to "encourage younger people to drive taxis and combine with platforms," expecting that service quality will improve.

He also continued to explain future plans. Kim Chae-gyu, Director of the Transportation and Logistics Office at the Ministry of Land, said, "We will create a Mobility Innovation Committee (tentative name) to gather experts from related industries," and "we will discuss issues such as total volume and contribution fees, and exempt or reduce contribution fees for small-scale early platform operators to lower entry barriers."

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