Don’t stifle innovation

The prosecution indicted two executives of ride-hailing service provider Tada without detention Monday on charges of operating the app-based mobility platform illegally. Lee Jae-woong, chief executive of car-sharing app operator SoCar, and Park Jae-uk, chief executive of Value Creators & Company (VCNC), a subsidiary of SoCar and operator of Tada, were accused of running a transportation business without a license.

Launched in October 2018, Tada has gained popularity by offering a new type of ride-hailing service using 11-seater vans. Korean laws allow rented vans with 11 to 15 seats to be leased and Tada has been offering this service. In February, an association of taxi drivers filed a complaint against Tada and the two executives, claiming that the firm was violating a law that only allows licensed operators to offer paid transportation services.

With the indictment, Tada’s fate will be in the hands of the judiciary.

It’s dumbfounding, however, that Tada, a sort of innovative business model that drew keen attention in the era of the Fourth Industrial Revolution, will be dealt with by judges. Certainly, there is no room for innovation if new technologies and services are choked off by outdated legal yardsticks. Tada has emerged as the country’s top ride-offering service, securing over 1.25 million subscribers and 9,000 registered drivers after a year of operation.

The Moon Jae-in administration has been championing innovative growth since its inception. But when it comes to innovation, there has been much talk but little action by this liberal administration.

The most important thing is that when an existing industry conflicts with a new innovative service, the government should make a judgment, focusing on which would serve the public best. Korea will have no choice but to fall behind in global competition if it goes against the stream of innovation, swayed by stakeholders.