The Supreme Court rules that the Tada mobility app was not illegal

A vehicle with the Tada logo passes through the Jung district of downtown Seoul on Thursday. On Thursday, the Supreme Court upheld the lower courts’ acquittal verdict, dismissing the prosecution’s allegation that Tada Basic’s app van service did not violate the transportation law. [YONHAP]

The country’s supreme court found car-sharing app Socar and its former executives not guilty of violating the nation’s transportation laws, dismissing the prosecution’s allegation that the app’s Tada van service was illegal.

The Supreme Court’s ruling could serve as a landmark decision for emerging car rental and sharing companies, as Korea’s draconian regulations, coupled with strong taxi driver unions, have often stymied new services.

Former Socar CEO Lee Jae-woong and Park Jae-uk, former CEO of VCNC, a Socar affiliate that ran Tada, were indicted without jail time in 2019 for running the service, accused of violating Passenger Transport Service Act with its van – Tada Basic calling service. Park now leads Socar as CEO.

Tada said his service was legal “like a rental car service that offers drivers.”

The Supreme Court upheld the lower courts’ acquittal rulings, saying the defendants “did not misinterpret the provisions of the previous transport law”.

Lee stepped down from his position in 2020 to take responsibility for discontinuing Tada Basic service.

Park took over Lee’s position as CEO of Socar.

It has finally been recognized in the Supreme Court that innovation is not a crime, Lee wrote on his Facebook account Thursday. The people who didn’t understand innovation and prevented it still hold the power. [Tada] it should be the latest case of vested interests cursing and incriminating entrepreneurs who create changes or amend laws to ban innovation.

The Korea Startup Forum, a non-profit organization that has more than 2,025 startup members and partners, welcomed the Supreme Court’s verdict.

It was a natural decision, but the Tada Basic service has already disappeared from the market after being stigmatized as illegal by the investigative authorities and was shut down after the implementation of the revised bill, the so-called Tada Prohibition Act”. Thursday.

The innovation efforts of many startups are still hampered by old regulations and opposition from the upper class. We wish the maximum attention and support from the government and the National Assembly so that the Tadas case does not happen again.

Lee founded Socar as a car sharing service in 2011. With Socar affiliate VCNC, Lee released Tada in 2018.

Lee Jae-woong, former CEO of Socar, is pictured in front of the Seoul Central District Court in Seocho district, south Seoul, Sept. 29, 2022. [NEWS1]

The Tada Basic service was Tada’s main revenue stream offering 11 to 15 seat vehicles, along with a driver. Its operator VCNC used rental cars from Socar and matched drivers with app users.

VCNC indefinitely discontinued its Tada Basic service in 2020 after a revision of the Passenger Transportation Service Act that banned the rental of 11-passenger vehicles with drivers for purposes other than tourism, mandated van rentals for at least six hours at a time, and required users to possess boarding passes when renting or returning vehicles at airports and seaports.

Due to the revised law, Tada Basic cannot be revived despite the acquittal verdict.

The revised clause closed a legal loophole through which the van service had been able to operate without a government license since its launch in October 2018.

Tada still provides services like Tada Light and Tada Next, which do not violate transportation laws.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]