Tada "Position on Non-Participation in Ministry of Land Contribution System Remains Unchanged"

Service Suspension of Tada Basic on April 11 as Originally Planned

On the 5th, as the implementation of the amendment to the Passenger Transport Service Act, known as the Tada Ban Act, approaches, a 'Tada' vehicle is parked at a garage in Yeongdeungpo-gu, Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporter Jin-gyu Lee] As the government moves to establish subordinate regulations for the amendment to the Passenger Transport Service Act, Tada has maintained its stance that it will not pay contributions to the government nor seek platform approval.

On the 31st, Tada stated, "At present, there is no particularly new position regarding participation in the government's contribution system," adding, "It can be seen as the same position we have previously announced."

Tada's operator, VCNC, plans to temporarily suspend the Tada Basic service starting April 11 as originally planned, and will continue to operate only services such as 'Tada Premium,' 'Tada Air,' and 'Tada Private.'

Regarding the suspension of the Tada Basic service, Tada explained, "To continue the service, we must pay contributions to the Ministry of Land, Infrastructure and Transport and obtain approval, but it is difficult to predict the total volume of licenses to be approved or the scale of contributions."

In particular, with investment funds cut off due to the passage of the amendment, Tada holds the position that it is impossible to maintain a business with greatly reduced predictability. With the amendment passed by the National Assembly on the 6th, VCNC is now unable to attract investment or expand the business of Tada. With Tada’s accumulated deficit exceeding 30 billion KRW and investment attraction blocked by the amendment’s passage, the company has been hampered. Ultimately, Tada proceeded with workforce reductions and withdrew its planned corporate split scheduled for next month to pursue aggressive investment attraction.

Meanwhile, the Ministry of Land, Infrastructure and Transport plans to form a 'Mobility Innovation Committee' next month to determine the level of contributions paid by platform transportation operators and the total volume of platform transportation business licenses. Following the approval of the amendment at the Cabinet meeting held at the Blue House presided over by President Moon Jae-in, the Ministry plans to accelerate work to specify detailed institutional measures in subordinate regulations.