|VCNC CEO Park Jae-uk announces a plan to expand rental van-hailing service Tada during a media conference in Seoul, Monday. / Courtesy of VCNC|
By Jun Ji-hye
Rental van-hailing service Tada's expansion plan is facing hurdles due to the transport ministry expressing concerns that the plan could lead to more conflicts with taxi drivers.
VCNC, which operates the Tada service, announced a plan, Monday, to expand the number of its vans to 10,000 from the current 1,400 and its drivers to 50,000 from the current 9,000 by next year.
VCNC is a subsidiary of car-sharing service SoCar.
VCNC CEO Park Jae-uk said the Tada service, which has been operating in Seoul and the surrounding metropolitan area, will be expanded nationwide.
"There has been growing demand from Busan, Daegu and other areas," he said during a media conference to celebrate the first anniversary of Tada's launch.
The Ministry of Land, Infrastructure and Transport released a statement after this announcement, saying the mobility platform provider's plan was "inappropriate" as it could ignite controversy over such services and again provoke conflicts with taxi drivers at a time when the government has been working on measures to settle these and promote mutual growth between the conventional taxi industry and new platform companies.
Tada, which uses 11-seat rental Kia Carnival vehicles and outsourced drivers, has expanded its presence swiftly over the past year despite protests from taxi drivers, boasting over 1.25 million users.
While taxi unions have called the service "illegal," VCNC has stressed it offers legal services, citing an enforcement ordinance of the Passenger Transport Service Act, which permits companies to offer drivers when using rental vehicles with 11 seats or more.
Amid intensifying conflicts between conventional taxi service providers and new mobility platform operators, the transport ministry announced a set of proposals in July to settle the discord, saying it will enact legislative measures by the end of the year.
The measures proposed by the ministry included the government's control of the number of taxi licenses that can be purchased by mobility platform providers.
During Monday's press conference, VCNC CEO Park expressed his dissatisfaction with the measures, saying the core of the platform business is the flexibility to supply in accordance with demand.
"The government has moved to create laws calling them innovative measures, but there is great possibility for such measures to become regulations that block new businesses," he said. "More sufficient discussion will be necessary."
But the ministry once again stressed that additional services of mobility platform providers should be created within its new measures.
It sent a de facto warning to the company, saying it would push to revise the enforcement ordinance of the Passenger Transport Service Act, which has offered grounds for the Tada service.
If the ministry revises the enforcement ordinance, the Tada service would become illegal.
Regarding the ministry's statement, a VCNC official said, "We will continue to consult with the ministry."