The Tada Basic Controversy and What Followed... Unfinished Challenges

"Platform Transportation Business Contribution Scale Must Be Promptly Calculated Through Broad Opinion Gathering"
Urgent Need to Resolve Mobility Platform Workers' Rights Protection Issues

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

[Asia Economy Reporter Jin-gyu Lee] Although the 11-passenger van call service 'Tada Basic' has disappeared into the annals of history, industry confusion continues. Following the passage of the amendment to the Passenger Transport Service Act, the success of new mobility business models and the protection of the rights and interests of mobility platform workers remain challenges to be addressed.

According to the amendment to the Passenger Transport Service Act on the 3rd, platform transportation operators can operate services like the existing Tada Basic if they pay a contribution fee based on the number of permitted vehicles or operation frequency and obtain platform transportation business approval from the Ministry of Land, Infrastructure and Transport. However, the specific levels of vehicle permits and contribution fees have not yet been determined.

The National Assembly Legislative Research Office recently pointed out in its report titled "Institutionalization of Platform Transportation Business and Future Tasks" that "from the perspective of the platform transportation industry, detailed matters such as the total number of permitted vehicles, contribution fee levels, and payment methods can still act as sources of business uncertainty." It also stated, "The government needs to present the total scale of platform transportation business permits annually or in stages according to a long-term plan."

Furthermore, it advised, "Especially since the total number of platform transportation business permits is linked to the trend of taxi reduction performance, it is necessary to establish a reliable policy direction to alleviate concerns about the recent sluggish taxi reduction status." It continued, "Regarding contribution fees, a reasonable scale and calculation criteria should be promptly prepared through broad opinion gathering. It is necessary to defer or significantly reduce contribution fee payments for small-scale companies for a certain period. If the contribution fee is set too high, it will create entry barriers for small startups, allowing only capital-rich large corporations to enter the market."

VCNC, the operator of Tada, despite a 1.5-year business grace period following the passage of the Passenger Transport Service Act amendment, ultimately took the bold step of suspending the Tada Basic service on the 11th of last month. They judged that there were limits to service growth under the government's total volume regulation.

Along with this, the protection of the rights and interests of mobility platform workers, which emerged after the suspension of Tada Basic, has also become an issue to be resolved. Tada drivers who lost their jobs due to the suspension of Tada Basic established a labor union on the 27th of last month and decided to take legal action. They plan to demand confirmation of the drivers' worker status and payment of unpaid wages from Socar and VCNC. On the 9th of last month, Tada drivers also filed a complaint with the prosecution against former Socar CEO Lee Jae-woong and CEO Park Jae-wook for violations of the Labor Standards Act and the Dispatch Act. They argue that legal responsibility must be borne for the damages suffered by Tada drivers due to the suspension of Tada Basic.

The National Assembly Legislative Research Office stated, "Although the amendment has virtually established the minimum legal basis for platform transportation business, issues regarding the protection of working conditions for platform laborers such as Tada drivers remain," and suggested, "Since legislation to protect platform laborers is expected to take considerable time, in the short term, it is necessary to create conditions that allow platform transportation operators and platform laborers to voluntarily establish a joint code of conduct."