Controversial bill against ride-hailing services passes parliament

All News 23:54 March 06, 2020

SEOUL, March 6 (Yonhap) -- The National Assembly on Friday passed a controversial bill aimed at slapping new regulations on Tada, a popular ride-hailing service, amid heated debate over whether to permit the service.

The revision to the passenger transport service act, commonly seen as a means of outlawing Tada, calls for restricting the outsourcing of drivers for the use of rental vans with 11-15 seats to tour purposes only.

Tada -- which means "to ride" in Korean -- was launched in October 2018 and has become South Korea's leading ride-offering service. But taxi drivers have fiercely protested against Tada, condemning it as an illegal call taxi service.

The legislative move drew attention as a Seoul court ruled in favor of Tada as a legitimate rental car service on Feb. 19 in a landmark decision that will likely uphold the mobility platform industry.

The centerpiece of the revised bill is to recognize mobility platform businesses such as Tada as part of passenger transport services.

A transport platform operator will be able to rent 11-15 seat vans for the purpose of tours. But vehicles should be rented for at least six hours, and the outsourcing of drivers is permitted only when vehicles will be returned at airports or seaports.

Under the bill, rental cars are recognized as a type of transport platform business, which proponents argue will effectively allow Tada to continue operating.

A day earlier, the chief of the parliamentary judiciary committee invoked his right to pass the bill despite some lawmakers' opposition.

The panel claimed that the measure amounts to permitting ride-hailing service providers to operate within legal boundaries if they register for licenses.

The government also stressed that the bill, if passed, will permit rental car-based services provided by Tada and its rivals to consistently operate.

"The proposal will help ease social conflicts and allow various mobility platform operators to stably push for innovative business within (legal) boundaries," the land and transport ministry said in a statement.

But the passage of the bill will prevent Tada from providing the current level of services as it stipulates strict conditions for rental.

The revised act will take effect one year after it is proclaimed. A six-month grace period will be given, but for operations, Tada should obtain related transport licenses and face regulations similar to those applied to the taxi industry.

Lee Jae-woong, chief of SoCar, which owns the operator of Tada, vehemently protested against the proposal, claiming that it will stifle the growth of the innovation-driven business.

"The government and the National Assembly that banned innovations and deprived (people) of a chance for a new dream are dead," Lee said on his Facebook page Wednesday after the measure was approved by the judiciary panel.