Will the Future of Korean Mobility Be Bright After the Passage of the Tada Ban Law?

Tada Basic to Suspend Service Within One Month of Bill Promulgation
Startup Industry: "Government Holds Life-and-Death Control Over Mobility Industry"
Lee Jae-woong: "Who Would Challenge When Labeled a Criminal Group?"
Meanwhile, Government Says "Various Services Can Be Launched Within the System"

On the 5th, with the implementation of the amendment to the Passenger Transport Service Act, known as the Tada Ban Act, just around the corner, a 'Tada' vehicle is parked at a garage in Yeongdeungpo-gu, Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Jin-gyu Lee] With the passage of the Tada Ban Act (Amendment to the Passenger Transport Service Act) through the National Assembly, Tada will cease its services. While the passage of this amendment is being seen as enabling rental car-based businesses like Tada to pursue various projects within the regulatory framework, concerns are growing that the domestic mobility industry will be controlled more by the government and taxi industry interests rather than growing through technological innovation.

Tada’s operator VCNC announced on the 7th, "With the Tada Ban Act approved by the temporary National Assembly, only the final promulgation of the law remains," adding, "Upon the law’s promulgation, the 11-passenger van call service 'Tada Basic' will temporarily suspend its service within one month." Additionally, the service for mobility-impaired individuals such as the disabled and elderly, 'Tada Assist,' will operate only until today.

Following the amendment’s passage, Tada is expected to decide whether to completely shut down its services or focus on operating the premium taxi call service 'Tada Premium.' Currently, Tada owns about 1,500 vehicles, including approximately 1,400 for Tada Basic and 90 for Tada Premium. Since the Basic service accounts for most of Tada’s business, its suspension could effectively mean the termination of all operations.

Startup industry players and experts have raised critical voices, stating that with the amendment’s passage, no new mobility business opposing the taxi industry’s interests can emerge domestically anymore.

The Korea Startup Forum (Kospo), an alliance of about 1,230 startups, commented, "Mobility startups now face a cliff of 'total volume' and 'contribution fees,'" and pointed out, "The more fundamental issue is that the government, like with the existing taxi industry, has seized the 'life-and-death control' over the entire new mobility industry." They added, "Now, the coexistence and innovation of the domestic mobility industry can only rely on the government’s will and goodwill, making innovation through market competition even more difficult."

Kospo further criticized, "Regulations such as total volume and contribution fees may be one way of coexistence, but at the same time, they are massive regulations structurally restricting the emergence of mobility unicorns in our country," and said, "Only companies with already grown capital strength may be able to enter the market."

Professor Jeong Hyun Wi of Chung-Ang University’s Business Administration Department explained, "With the amendment’s passage, new mobility services that infringe on the taxi industry’s interests can no longer emerge domestically," adding, "Even though the court ruled not guilty for Tada, the National Assembly has set a precedent of defending the interests of specific interest groups against the will of the people."

Lee Jae-woong, CEO of Socar, criticized on his Facebook on the same day, "I failed, but someone has to challenge innovation; however, with being labeled as fraudsters and criminals, who would dare to challenge?" He added, "A lawmaker under prosecution for defamation verbally attacked entrepreneurs in the plenary session and even denounced colleagues; can we build a venture powerhouse and achieve innovative growth like this?"

On the other hand, the government evaluated that the amendment allows mobility businesses previously outside the regulatory framework to launch various services within it. The amendment newly establishes ▲platform transportation business targeting rental cars ▲platform franchise business exclusive to taxis ▲platform brokerage business through applications, and adds rental cars as a vehicle procurement method. For Tada to maintain its Basic service, it must pay a certain contribution fee based on the number of vehicles and obtain a license as a platform transportation operator, following the 'taxi total volume system' to increase vehicles within the permitted scope.

The Ministry of Land, Infrastructure and Transport stated, "The amendment is a law institutionalizing the resolution of social conflicts and enabling various mobility operators to conduct innovative businesses stably within the regulatory framework," and added, "Rental car-based businesses such as Tada, Buxi, and ChaCha can continuously pursue their businesses within the system, and more diverse and innovative mobility services will be launched."

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