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| Park Jae-uk, right, CEO of VCNC that operates Tada, answers questions from reporter while Lee Jae-woong, center, CEO of VCNC parent company SoCar, smiles, at the Seoul Central District Court, Wednesday, after the court acquitted them over illegality of the app-based business. / Yonhap |
By Jun Ji-hye
Taxi drivers here are reacting angrily to the recent not-guilty verdict given to the owners of rental van-hailing service Tada, pledging to intensify their protests against the service, their associations said Thursday.
The Seoul Central District Court acquitted Park Jae-uk, CEO of VCNC that operates Tada, and Lee Jae-woong, CEO of the VCNC parent company SoCar, Wednesday, on charges of violating the Passenger Transport Service Act.
The court did not agree with the prosecution argument that Tada was an "illegal taxi service," instead calling it a "legitimate rental car service based on a mobile application." The landmark decision will likely pave the way for new mobility platform companies to develop their services further.
Four associations of taxi companies said in a joint statement that the ruling excluded a judgment on how Tada's business has "collapsed" the nation's passenger transportation industry.
"The court's ruling was just sophistry to give an indulgence to Tada that used large amounts of money and a large law firm," the statement said. "We will go on a general strike and stage a rally mobilizing all taxi drivers."
The associations called on the National Assembly to promptly pass a revision to the Passenger Transport Service Act, designed to effectively outlaw Tada's business.
They also asked the prosecution to lodge an appeal.
Launched in October 2018, the Tada service, which uses 11-seat rental Kia Carnival vehicles and outsourced drivers, has expanded its presence swiftly, boasting over 1.7 million users.
When a user enters a destination in the mobile app, an 11-seat van arrives for them.
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| Rental van-hailing service Tada / Yonhap |
Taxi unions as well as prosecutors have claimed that Tada is an illegal taxi-like service because it transports passengers for money using drivers who do not have taxi licenses.
VCNC, on the other hand, has stressed it offers legal services, citing an exceptive clause of the standing law that permits rental vans with 11 to 15 seats to be offered with regular drivers.
The court sided with VCNC, saying, "The number of Tada users has been increasing despite the higher price of the service. It should be seen as a free-market choice."
The court, however, pointed out that its ruling was a primary judgment in accordance with legal principles, asking the conventional taxi industry, new platform companies and the government to continue to consider ways of resolving disputes and promoting mutual growth.
After the ruling, SoCar CEO Lee Jae-woong wrote on Facebook: "I deeply appreciate the court's wise decision that will open a new path for the future."
He said Tada will continue to create new business models.
