Tada executives indicted for ‘illegal’ service
Prosecutors indicted the heads of Tada, a ride-hailing service, Monday, declaring the app-based business “illegal.”
Lee Jae-woong, chief executive of car-sharing app operator SoCar, and Park Jae-uk, chief executive of its rental car hailing service unit, Value Creators & Company (VCNC), face charges, without physical detention, of running a transportation business without a license, the Seoul Central District Prosecutors’ Office said. VCNC operates the Tada service.
An association of taxi drivers in Seoul filed a complaint against the two businessmen in February.
Tada was launched in October 2018 and has rapidly grown to become Korea’s leading ride-offering service. It operates mostly in the Seoul metropolitan area.
Taxi drivers claim that Tada threatens their livelihood and violates Transportation Law that forbids rented vehicles from offering rides in exchange for money.
Tada argues its business is within legal boundaries based on a written exception that specifically allows rented vans — or vans with 11 to 15 seats — to be offered with drivers.
The local taxi industry argues this is an arbitrary application of the rule, irrelevant to its original purpose of promoting tourism.
At issue will be whether Tada should be considered as a type of rental car service or an illegal taxi service operating without a license.
“Tada users think they are hailing a cab, not renting a car,” an investigator at the prosecution office said. “The truth behind Tada’s service is that it is a paid taxi service, not a vehicle rental business that comes with a driver.” Tada said it will make clear in any trial that its service is a legal business that is meeting changing customer demands in the transport industry.