‘Illegal Call Taxi Operation’ Controversy: Former Tada CEO Lee Jae-woong and Others Acquitted

Court: "Arranging car rentals through articles... not a transportation business"

The former and current executives of the vehicle call service "Tada," which was embroiled in controversy over "illegal call taxi operations," have been acquitted.

The Supreme Court's 3rd Division (Presiding Justice Oh Seok-jun) on the 1st upheld the lower court's verdict of not guilty in the final appeal trial against former Socar CEO Lee Jae-woong, VCNC CEO Park Jae-wook (a subsidiary of Socar and operator of Tada), and the corporations Socar and VCNC, who were charged with violating the Passenger Transport Service Act.

Tada is a service that allows users to call an 11-passenger van with a driver via a smartphone application. It was operated by VCNC, a subsidiary of Socar and the operator of Tada, which rented cars from Socar and then rented them out again to customers along with drivers.

The prosecution judged that the Tada service constituted "illegal call taxi operations" prohibited under the Passenger Transport Service Act and brought charges against former CEO Lee and others.

The defense argued that the Tada service was not transporting passengers but rather a concept of "rental cars with drivers," and thus did not violate the law.

The key issue in the trial was how to legally interpret the actions of Tada users requesting and using vans from Socar through the Tada app.

The first trial court ruled that the Tada service was a rental car under a lease contract for vans between the user and Tada and acquitted the defendants.

The second trial court also ruled, "The Tada service can be seen as a car rental service, including driver mediation, which was already permitted, and it cannot be considered as transporting passengers for profit. It only rents cars to specific members who pre-book the vehicle and arranges drivers for them, and does not respond impulsively to requests from unspecified individuals on the street, so it cannot be said to transport an unspecified number of passengers by car."

The Supreme Court also agreed with the lower courts' judgment that Tada did not operate a passenger transport business for profit but rather rented cars by mediating drivers.