'Stormy Waters for Tada'... How Will Service Operations Proceed After the Tada Ban Law?

"Tada Premium Expansion Plan Reset from the Beginning"
Main Service Tada Basic Ends After 1 Year 6 Months
Lee Jae-woong: "We Will Somehow Join Forces with Socar to Survive"

On the 5th, with the enforcement 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] Tada has been thrown into turmoil following the passage of the Tada Ban Act (Amendment to the Passenger Transport Service Act). Lee Jae-woong, CEO of Socar, stepped down from the front lines of management, and the plan to split the Tada company was scrapped. Tada's main service, the 11-passenger van call service 'Tada Basic,' will also be suspended next month.

According to Tada operator VCNC on the 14th, Tada will temporarily suspend the Tada Basic service from April 11, but will continue to operate services such as 'Tada Premium,' 'Tada Air,' and 'Tada Private.'

Initially, Tada, which was acquitted by the court on the 19th of last month, had planned to expand the premium business nationwide to about 1,000 vehicles. Currently, Tada Premium is operating with about 90 vehicles only in the metropolitan area.

Unlike Tada Basic, which operates on a rental car basis without a taxi license, Tada Premium operates as a luxury taxi in collaboration with drivers who hold taxi licenses. As part of business expansion, VCNC had planned to support 5 million KRW per vehicle when newly registered taxi drivers and taxi corporations purchase new vehicles for Tada Premium, and to waive platform fees for three months after service launch.

However, with the passage of the amendment in the National Assembly on the 6th, VCNC found it impossible to attract investment and expand the business of Tada, forcing them to reconsider the Tada Premium expansion plan from scratch. With Tada's accumulated deficit exceeding 30 billion KRW, the passage of the amendment blocking investment has become a major obstacle. Tada is currently undertaking workforce reductions. Additionally, the planned corporate split scheduled for next month to attract aggressive investment has been withdrawn. A Tada official stated, "We need to reset the overall business plan of Tada first. However, the premium service will continue."

Lee Jae-woong, CEO of Socar, expressed on his Facebook, "We will suspend the Tada Basic service and try to survive by somehow joining forces again with Socar," and added, "We will unite with the goal of moving the world through mobility innovation and create change," showing his commitment to the Tada Premium business. He criticized, "It is absurd to believe that taxis, which have not been innovated due to the Ministry of Land, Infrastructure and Transport's policy failure, will be innovated just because Tada is banned. Minister Kim Hyun-mi of the Ministry of Land, Infrastructure and Transport, who pushed the policy to ban Tada for taxi innovation, should at least apologize and prepare measures for the drivers who lost their jobs due to this wrong policy."

Meanwhile, the Tada Basic service, launched in October 2018, will disappear into the annals of Korean mobility history just one year and six months after its launch due to the passage of the amendment. Also, Lee, who said in April of the same year that he would "create new rules in the mobility market," will step down from the front lines of management. The new CEO of Socar will be Park Jae-wook, Chief Operating Officer (COO), who will also concurrently serve as CEO of VCNC.

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