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It’s not just about Tada

Dec 13,2019
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Lee Jae-woong, CEO of SoCar ?the parent company of VCNC that operates van-hailing service Tada ?receives questions from a reporter before appearing at the Seoul Central District Court on Dec. 2 for his first trial on charges of violating the passenger transportation service law. [JANG JIN-YOUNG]
Yi Jung-jae
The author is a columnist of the JoongAng Ilbo.

Lee Jae-woong, CEO of Socar — the parent company of VCNC, which operates van-hailing service Tada — has become hard and spiteful. He has been using social media for his offensive against the mainstream — the government, the National Assembly, the prosecution, the taxi industry and others who are against his ride-sharing business. His writing has gone beyond wretchedness and frustration over the never-ending impediments to the new mobility service. He referred to the revised Passenger Transport Service Act, which passed the transportation committee in the legislature, as a “Red Flag,” “Anti-Tada” or “Anti-Innovation” law. He argued that he must fold his business if the law passes in a plenary session of the Assembly.

He gave his reasons. “Tada cannot be sustained if it can only carry a passenger who shows an air ticket. It cannot maintain economies of scale. Over 10,000 drivers will lose their jobs, and 1,500 vans, which had been in service for one year, will go to waste.”

He lashed out at Land, Infrastructure and Transport Minister Kim Hyun-mee. He had refrained from directly attacking the Transport Ministry which is in charge of vehicle policy, even while directing harsh words at the deputy prime minister for the economy or chiefs of the Fair Trade Commission and Financial Services Commission. The ministry accused him of being selfish and demanded him to be more understanding towards the taxi industry. Lee did not back down and criticized the government for being partial towards cab drivers. Lawmakers and businessmen joined the fight. Rep. Park Hong-keun of the ruling Democratic Party defended the revised bill as one for symbiotic growth, while Park Yong-mann, chairman of the Korea Chamber of Commerce and Industry, called it a hindrance to the future.

We must go back to the basics when the brawl gets heated. The sharing economy has been the starting point. Ride-sharing, fourth industrial revolution, platform businesses and greater consumer choice and convenience have long been the buzzwords. But they no longer matter. Now it is all about co-existence with the taxi industry. This is because the government and politicians are entirely mindful of the votes in the Apr. 15 general elections. When the presidential tripartite committee aimed at ironing out differences between the business and workers at the mediation of government launched early this year, none from the consumer and platform businesses were included. Minister Kim vowed that an Uber-like car-pool service would never take off in Korea.

The path to innovation has become narrower and bumpier. It has been revised to best serve taxis. Taxi-conscious mobility services cannot be regarded as novelties. Ride-sharing data would be a gold mine, whereas a data platform based on existing taxis would be old steel, one industry member said. Korean services can hardly compete against Uber, Didi Chuxing of China or Singapore-based Grab, which come up with customized services through analytics in ride flow and passenger habits in seconds and minutes. We may be going back to the days of the carriage instead of riding on the sharing economy. Lee Jae-woong stressed that Tada does not wish to become a plain taxi service.

Uber founder Travis Kalanick in 2015 said the company envisions Uber to be as “reliable as running water” as well as “efficient and so highly utilized that for most people it is cheaper than owning a car.” He also claimed if 90 percent of cars sitting idly in parking spaces or garages are shared, traffic and air pollution problems would significantly ease.

Ride-sharing services can also generate many jobs whereas other fields, including artificial intelligence, in the digital and machine-led age replace human labor. Authorities must guide policies with farsightedness. They must first deem if the Korean industry can compete with China’s Didi Chuxing and whether the Korean industrial players and economy have a sustainable future. Because they have eyes on immediate votes, they can promise that Korea will never have Uber-like carpool service. Therefore, the revised act that bans Tada should be scrapped and rewritten.

There has been one gain from the controversy though. When I got into a taxi recently, the driver thanked me for using his service and bade me good-night as I got off. I too wished him well. It was a rare pleasant drive in a taxi where irritable radio and political rambling had been the usual. We owe Tada for these changes.

JoongAng Ilbo, Dec. 12, Page 34