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Tada challenges law that could kill the service

Company publishes a statement, while CEO lashes out on internet
Nov 28,2019
Tada is calling for a public discussion over amendments to transportation laws that could prohibit the mobility platform altogether.

In a statement Wednesday, the van-hailing service and Socar, its parent company, called for calm while at the same time arguing that the amendments would create even more conflict. Later the same day, Socar’s CEO offered more strongly worded sentiments via an internet post.

“This proposal does not only ban innovative mobility services such as Tada, but will also deepen the chasm in the current social conflict,” the statement read.

“We hope that the National Assembly holds a public hearing and an open discussion so that we have an opportunity for existing [transportation] and platform industries to communicate and listen to each other.”

The National Assembly is currently reviewing the proposed amendment by Democratic Party lawmaker Park Hong-geun. If passed, the amendment would greatly strengthen approval standards for services linking drivers with customers, effectively making platforms like Tada impossible.

The mobility service is already at the center of the storm as the taxi industry argues that it is outright illegal. Late last month, prosecutors indicted Park Jae-wook, CEO of VCNC, which operates Tada, as well as VCNC parent company Socar CEO Lee Jae-woong.

Local transportation law prohibits unlicensed companies from offering paid ride services.

While the company claims it is simply linking customers with van drivers, prosecutors argue that Tada is similar to a taxi service and that the start-up should obtain a government license.

The government has so far allowed Tada to operate.

Socar CEO Lee fiercely criticized the proposed amendment and government efforts to mediate between new mobility and the taxi industries in a separate Facebook post the same day.

“Tada does not lead to losses to taxis,” wrote Lee. “It is creating a new mobility market by working through rental vehicles that are registered to link drivers as approved by the law.”

“I don’t understand the reasoning behind trying to ban an innovative effort in mobility, which can lead to even more innovation.”

“If they are making a law, it shouldn’t be as it is right now by rushing without discussions and taking the taxi industry’s and large corporations’ side,” he continued. “A law that considers the convenience of the public and the future industry should be made.”

The number of Tada subscribers broke 1.25 million in the year since the service was launched in October last year, while the number of drivers increased to 9,000 over the same period.

BY CHAE YUN-HWAN [chae.yunhwan@joongang.co.kr]