The Seoul Central District Court will Monday open a hearing on ride-hailing provider Tada, Yonhap News said, amid criticism of the company from traditional taxi services and allegations its operations break Korean law.
Offering transport for people in larger vans, the smartphone app-based service became popular in South Korea, where the likes of Grab Holdings Inc. and Uber Technologies Inc. haven’t been able to gain a foothold. In October, however, prosecutors indicted Park Jae-wook, chief executive of Tada service provider VCNC Inc., and Lee Jae-woong, the head of its parent SoCar, for allegedly violating the passenger transport service act.
South Korean law prohibits companies from operating paid ride services with rented cars unless they use vehicles with capacity for 11 to 15 passengers. The indictments of Park and Lee, who haven’t been charged or arrested, followed complaints by traditional taxi operators.
“I have a lot to say, but won’t say a word,” Lee wrote on Facebook at the time.
Tada “is among the mobility service providers that apply the AI technology the most,” he wrote, adding that over 1.3 million users and 9,000 drivers benefit from the service. “This service is allowed by the law. The police decided that this doesn’t violate the law and the transportation ministry has never ordered us to stop for over a year when the service ran.”
He also said the indictment was a contradictory signal from prosecutors and South Korea’s President Moon Jae-in, who pledged in October to ease regulations to help promote innovation and artificial intelligence.