Tada Operator VCNC Files Appeal against Revised Transport Act

The operator of the South Korean ride-hailing service provider Tada, Value Creators & Company (VCNC), filed an appeal to the Constitutional Court against the administrative restriction imposed on its operation after an amendment to the passenger transport act passed.

VCNC presented the petition to the Constitutional Court last Friday, explaining that the challenge against the revised transport bill is to “restore its honor,” and not to continue its business.

The company said that the amended bill infringes on the freedom of employees of VCNC and SoCar, and Tada drivers to pursue corporate activities. The operator added that the revised act violates the company’s right to “equality by unduly limiting the usage purpose, time and place” of its van-hailing service.

The revised bill passed the National Assembly in March, effectively banning the ride-hailing service. The act requires chauffeur-driven Tada vans for tour purposes only for at least six hours. The amendment also requires the drivers to rent or return the vehicles at seaports and airports.

Previously, Tada vans with drivers could operate without limits on rental areas and service hours to serve customers.

VCNC said in a statement that it filed the appeal on May 1, as the revised bill infringes upon people’s constitutionally protected rights placing restrictions on transportation options.

Conflict Over Mobility Market

Intense conflict between technology-driven mobility companies and traditional taxi drivers over the mounting mobility market preceded the passing of the revised bill.

Following the passage of the bill in March, VCNC halted its primary ride-hailing service and canceled the company’s planned hires. The operator also received voluntary resignations from drivers and employees. Tada drivers also filed prosecutorial charges against the firm’s two chiefs on alleged labor law violations.

Tada, launched in October 2018, rapidly became South Korea’s leading ride-hailing platform, winning over 1.7 million registered users. Along with 12,000 designated drivers, the service gained public support as a new mobility option in the country.

The government only permits licensed taxis to operate ride-hailing services. Tada, however, during its operation, exploited a loophole that lets commercial rides on rented vans with 11 to 15 seats.