Socar "Respect Constitutional Court Decision"... Industry 'Retreats' After Tada Ban Law

[Asia Economy Reporter Buaeri] The Constitutional Court has ruled the amendment to the Passenger Transport Service Act, known as the 'Tada Ban Law,' constitutional. In response, VCNC's parent company, Socar, which operates Tada, stated that it "respects the Constitutional Court's decision."

A Socar representative said on the 24th, "Socar and Tada will provide convenient and safe mobility services in accordance with the Passenger Transport Service Act."

Previously, in May last year, Socar filed a constitutional complaint arguing that the Passenger Transport Service Act restricts users' choice of transportation and discriminately allows the right to arrange drivers based on travel purpose, time, and location, thereby infringing on self-determination and equality rights.

The Constitutional Court stated regarding the Tada service, "The driver arrangement by car rental operators combined with ultra-short-term car rentals effectively provides services overlapping with existing taxi transportation businesses but does not receive equivalent regulation, which has significantly increased social conflicts."

It further explained, "The provisions under review are intended to prevent regulatory imbalance, promote a fair passenger transport order, and foster the development of the passenger car transport business. The legitimacy of the legislative purpose and the appropriateness of the means are recognized," adding, "Regulations on rental locations and rental times are not considered excessive restrictions."

Within the industry, concerns have arisen that following the 'Tada Ban Law,' mobility services have effectively been reorganized into franchise taxis, contrary to the Ministry of Land, Infrastructure and Transport's assurance that "more 'Tada' services will emerge."

According to the Passenger Transport Service Act amendment pushed by the Ministry of Land, Infrastructure and Transport, platform operators are classified into three types: ▲Platform Transport Business (Type 1), such as 'Tada Basic' operated with existing white Carnival vehicles, ▲Platform Franchise Business (Type 2), like Kakao T Blue, and ▲Platform Brokerage Business (Type 3).

To operate a platform transport business, operators must pay a contribution fee in the spirit of coexistence with existing taxis. Platform transport operators running rental car call services in the existing Tada Basic style must choose one of the following contribution fees: 5% of sales, 800 KRW per trip, or 400,000 KRW per month per permitted vehicle. At the time of the law's passage, the Ministry promoted on its website header that this was not the 'Tada Ban Law' but the 'Mobility Innovation Law,' stating, "'Tada' will increase and diversify."

However, since the passage of the Tada Ban Law in March last year, the platform transport business is widely regarded as having regressed. Socar withdrew the Tada Basic business in April last year, judging that the current contribution fee system made the business unfeasible. Chacha Creation, which offered a similar service to Tada Basic, also ceased operations. Currently, only Papa Mobility's 'Papa' maintains a presence.

An industry insider said, "Although we did not initially consider the Passenger Transport Service Act amendment unconstitutional, the legislation should have proceeded in a way that revitalizes the industry, but a completely different situation unfolded," adding, "It is time for a flexible policy shift regarding contribution fees and total volume."

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