The Turbulent 'Tada Basic' Ultimately Fades into History... What Challenges Remain?

Focusing on Mid-to-High-End Taxi Service 'Tada Premium'
Remaining Challenge: Resolving Conflicts with Tada Drivers

On March 5, when the enforcement of the amendment to the Passenger Transport Service Act, known as the Tada Ban Act, is just around the corner, a 'Tada' vehicle is parked at a garage in Yeongdeungpo-gu, Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporter Jin-gyu Lee] The 11-passenger van ride-hailing service 'Tada Basic,' once hailed as an icon of innovation, has finally faded into history. However, the legal battles with Tada drivers facing job loss due to the service suspension remain unresolved challenges.

According to Tada operator VCNC on the 11th, Tada Basic completed its final operations the day before and fully suspended the service at midnight on the 11th. It has been about a year and a half since Lee Jae-woong, the founder of the portal 'Daum' and former CEO of Socar, launched Tada in October 2018 with a vision of mobility innovation.

Last month on the 6th, a revision to the Passenger Transport Service Act, which effectively made the current Tada Basic service operation impossible, passed the National Assembly. Despite a one-and-a-half-year grace period, VCNC took the bold step of immediately halting the business within just a month. According to the amendment, Tada Basic could have continued by paying contributions and obtaining platform transportation business qualifications from the Ministry of Land, Infrastructure and Transport, but VCNC judged that under the government's total volume regulation, there would be limits to service growth.

Instead of continuing Tada Basic, VCNC decided to focus on operating other services such as 'Tada Premium,' 'Tada Air,' and 'Tada Private.' Unlike Tada Basic, which operates on a rental car basis without a taxi license, Tada Premium operates as a semi-luxury taxi in collaboration with drivers holding taxi licenses. Currently, Tada Premium operates about 100 vehicles in the metropolitan area.

VCNC plans to hold a business briefing on the 14th for taxi drivers to expand the Tada Premium vehicle lineup. Earlier, VCNC was acquitted by the court in February and planned to expand the premium business nationwide to about 1,000 vehicles. However, with the passage of the amendment last month, VCNC found it impossible to attract investment and expand the business, forcing it to reconsider the Tada Premium expansion plan from scratch. Some speculate that part of the approximately 1,400 Carnival vehicles used for Tada Basic may be utilized in the Tada Premium service.

Meanwhile, although the Tada Basic service has ended, conflicts with Tada drivers and appellate court battles with the prosecution remain unresolved issues. How smoothly VCNC can resolve conflicts with Tada drivers ahead of the Tada Premium business expansion is crucial. Recruiting taxi drivers to join Tada Premium while clashing with Tada drivers could become an obstacle. On the 9th, Tada drivers filed a complaint with the prosecution against former CEO Lee and Socar CEO Park Jae-wook for violations of the Labor Standards Act and the Dispatch Act. They claimed, "Tada violated the law by dispatching people contracted as dispatched workers to the transportation business, and failed to pay night and holiday work allowances, annual leave and weekly holiday allowances, and severance pay." They argue that Tada should bear legal responsibility for the damages suffered by Tada drivers due to the withdrawal of the Tada Basic service.

Additionally, the appellate issue with the prosecution remains. In October last year, the prosecution judged the Tada Basic service to be illegal and indicted former CEO Lee and CEO Park. However, since VCNC has already suspended the Tada Basic service and the first-instance court ruled in February that Tada Basic is a 'legal rental car,' it is expected that there will be little impact on Tada's management.