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| A Kia Carnival van used by VCNC's Tada ride-hailing service is seen driving past the National Assembly in Yeouido, Seoul, March 8. / Yonhap |
By Baek Byung-yeul
Tada, a prominent Korean SME, will end its van-hailing service April 10 after the National Assembly recently passed a law revision aimed at prohibiting the operation of such services with drivers who do not possess a taxi license, the operator VCNC said Thursday.
According to the company, CEO Park Jae-uk gave notice to Tada drivers that its main service, Tada Basic, which enables passengers to call for a van through the firm's designated app, will be terminated after that date.
"We will operate Tada Basic service for a month until April 10 but it will remain out of service indefinitely," Park told the drivers. "It will be difficult for us to stay in operation for even a month, but we want to do our best."
A VCNC official confirmed Park gave notice to the drivers but said that doesn't mean all of its services will be terminated.
"As the CEO announced, VCNC will halt the operation of Tada Basic from April 11 but other Tada services such as Tada Premium, airport ride service Tada Air and the reservation-based Tada Private," will be available the official said. Tada Premium operates with luxury vehicles and has drivers who hold taxi licenses.
VCNC has operated the app-based rental van-hailing service since October 2018 using 11-seat Kia Carnival vans and outsourced drivers.
Though the company claimed its service complies with the transportation law that permits companies to provide drivers for rental vehicles with 11 seats or more, VCNC has faced setbacks from taxi drivers who called Tada "illegal" because the company transports passengers for money using drivers who don't hold taxi licenses.
Despite being criticized for disrupting the country's transport ecosystem, VCNC has gained explosive popularity with its Tada service, attracting more than 1.7 million users, many of whom are tired of the current taxi service, whose drivers have been criticized for reckless driving, rudeness and refusing to pick up passengers.
Under the revised Passenger Transport Service Act, transport platform operators will be able to provide outsourced drivers of 11- to 15-seat rental vans only if customers use the vehicle for more than six hours for touring purposes.
Given the revised act only allows outsourcing drivers when the vehicles are rented at ports or airports, VCNC said the revision was designed to prohibit it from operating the van-hailing service.
When asked about the company's future business plan, the VCNC official added nothing has been decided yet.
After the revision was, officials from startups expressed concerns that the "Tada Prevention Law" will have a devastating impact on the startup ecosystem.
The Korea Startup Forum, a lobby group of the startup community here, criticized the government's move to favor the existing taxi industry that has made Tada an illegal service operator, adding the decision will discourage entrepreneurs with good ideas from starting their own companies.
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