Tada, One Day Before First Trial Verdict... "We Will Go to the End"

CEO Lee Jae-woong "It's the first time, so it's insufficient, but we will steadily improve"
The fate of Tada expected to be decided based on court's guilty or not guilty judgment

Lee Jae-woong (right), CEO of Socar, and Park Jae-wook, CEO of VCNC, are entering the courtroom to attend the first trial sentencing hearing disputing the illegality of 'Tada' at the Seoul Central District Court in Seocho-gu, Seoul on the 10th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Jin-gyu Lee] With the first trial verdict for the van-hailing service 'Tada' just one day away, Lee Jae-woong, CEO of Socar, and Tada are reportedly determined to "defend themselves until the end." This is interpreted as an intention to immediately appeal if the first trial ruling is unfavorable. The industry views this verdict as a decision that will determine the fate not only of Tada but also of the domestic mobility industry.

According to the industry on the 18th, Judge Park Sang-gu of the Criminal Division 18 at the Seoul Central District Court will hold the first trial verdict hearing for CEO Lee and Park Jae-wook, CEO of VCNC, at 10:30 a.m. on the 19th. Earlier, the prosecution demanded a one-year prison sentence for them on the 10th. Additionally, fines of 20 million won were requested for the corporate entities Socar and VCNC, respectively.

◆ "Tada will continue to improve" = Ahead of the court ruling, the battle between startups including Tada and existing industries such as taxis is intense. CEO Lee stated on his Facebook the day before, "The first step after Tada's independence is to protect the drivers who play the most important role in the Tada ecosystem," adding, "Although it is still the beginning and there may be various shortcomings, we will steadily improve," expressing his determination not to stop Tada's operations. VCNC will implement the 'Tada Partner Care' policy in April to support Tada drivers against social risks such as injury and illness. CEO Park said, "We take pride in this completely new attempt to practice corporate social contribution and responsibility and to expand the platform ecosystem," and added, "We will challenge ourselves to create a unicorn company." On the 14th, 280 startup CEOs submitted a petition to the court requesting a not guilty verdict for Tada and expressed support for Tada and CEO Lee.

On the other hand, the Seoul Individual Taxi Transport Business Association opposed, stating, "If the rule of law in the Republic of Korea is alive, Tada is clearly illegal, and the court will naturally deliver a guilty verdict," adding, "If a not guilty verdict is issued, anyone could operate a taxi business with an 11-passenger rental car, which would be indefensible." Independent lawmaker Kim Kyung-jin also argued, "The Passenger Transport Service Act completely prohibits the act of arranging drivers for those who rent rental cars," and claimed, "The purpose is to prohibit indiscriminate taxi operations using rental cars."

◆ Tada's fate depends on the court's judgment = Tada's fate is expected to be decided based on the court's guilty or not guilty ruling. If a not guilty verdict is delivered in the first trial, Tada will breathe a sigh of relief; however, if a guilty verdict such as a fine is issued, a red light will be lit for Tada's management. Kim Kyung-hwan, lead attorney at Minhoo Law Firm, explained, "If a not guilty verdict is issued in the first trial, there will be no major problems in management, but if a guilty verdict such as a fine is issued, Tada can operate until the Supreme Court ruling is made, but it will face significant setbacks such as investment cuts." There was speculation that Tada's planned spin-off from Socar in April to launch as an independent company might be a preparation for any eventuality ahead of the court ruling. Regarding this, CEO Park denied the possibility of a sale, stating, "Socar and Tada have different business models, and it is advantageous to separate Socar and Tada to attract new investments, so we decided on the corporate split."