Mobility Industry Divided by Tada Ban Law... What Is the Fate of Tada?

Lee Jae-ung "Time to Restore the Abnormal Taxi Industry to Normal"
7 Mobility Companies "If the Amendment Does Not Pass, It's a Matter of Life or Death"
Uncertain Passage of Amendment in National Assembly Due to COVID-19 Spread Impact

Van for the vehicle call service 'Tada' operating in Seoul city. / Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Jin-gyu Lee] The mobility industry has split into two over the amendment to the Passenger Transport Service Act, known as the 'Tada Ban Law.' Broadly speaking, the division is between supporters of Tada and those opposing it. Due to the uncertainty of the amendment's passage in the National Assembly amid the COVID-19 pandemic, the future of the domestic mobility industry has become unpredictable.

On the 29th, Lee Jae-woong, CEO of Socar, stated on his Facebook, "It is not something that taxi labor unions should oppose to ban Tada, which is legal and can be chosen as an alternative by users and taxi drivers," adding, "The first issue to resolve is the illegal and livelihood-threatening working conditions of taxi drivers." He also emphasized, "Since large corporations like Kakao are acquiring taxi companies and receiving government subsidies, it is now time for taxi labor unions to come forward and create coexistence plans for taxi drivers struggling to make a living."

CEO Lee has been raising his voice in criticism over the amendment's handling day after day. He said, "We should not pass a law that only benefits taxi operators without preparing measures for people suffering from the economic crisis caused by COVID-19," and added, "Tada has steadily improved drivers' working conditions and expanded users' choices over the past year, which is why Tada has managed to survive despite people reducing their travel due to COVID-19."

In particular, he pointed out, "The Ministry of Land, Infrastructure and Transport, the taxi labor union, and the Democratic Party's Euljiro Committee, who have let taxi policies be dictated by operators for decades and caused this situation, should not worry about passing the Tada Ban Law but should instead normalize the abnormal and illegal taxi industry," and stressed, "It is time to protect hundreds of thousands of taxi drivers from infection and guarantee their basic livelihoods."

On the other hand, other mobility platform companies excluding Tada have opposed this, urging the prompt passage of the amendment in the National Assembly. They have been preparing coexistence plans with the taxi industry, such as securing taxi licenses, in anticipation of the amendment's passage, and now they cannot simply disregard these efforts. These companies stated, "If the amendment is not passed, mobility companies that have trusted government policies and prepared their businesses will be driven to a matter of life and death."

Seven mobility companies, including Kakao Mobility, KST Mobility, and Buxi, recently issued a statement saying, "The amendment is currently pending in the National Assembly's Legislation and Judiciary Committee, but its passage is very uncertain," and added, "If the National Assembly delays the amendment until the end of the 20th National Assembly session and discards the bill, it would be a dereliction of duty by the National Assembly, betraying the expectations of mobility companies and users who trust and expect the bill's passage based on government policy."

These companies said, "This amendment was prepared through mutual concessions at the same table between taxi organizations and the mobility industry, resolving conflicts between the existing industry and mobility and providing a foundation for coexistence," and criticized, "If the law is not passed in the 20th National Assembly, the hard-won foundation for coexistence will collapse, and the conflicts that have continued for years will intensify again." They also emphasized, "Mobility companies have already invested and launched services trusting government policies, and if the law is not passed this time, companies that prepared services based on government policies may face investment freezes and risk closure."

Meanwhile, as the COVID-19 situation spreads, discussions on the amendment pending in the Legislation and Judiciary Committee have been delayed. The February extraordinary session is effectively the last session of the 20th National Assembly, and if the bill is not passed at the plenary session scheduled for March 5, the amendment will be automatically discarded. The amendment, proposed by Democratic Party lawmaker Park Hong-geun in October last year, stipulates that when renting a van with 11 to 15 seats, a driver can only be arranged if the rental is for tourism purposes for six hours or more or if the return location is an airport or port. If the amendment passes the plenary session, the current 11-seat van call service 'Tada Basic' will no longer be able to operate domestically. CEO Lee stated regarding this, "If this law passes, Tada will have to close."