South Korea’s ride-hailing service Tada, a breaking hit since its launch just over a year ago, was cleared of transport law breaches in court Wednesday, a rare win in a market that has been significantly unkind to ride-hailing corporations.
Since launching in late 2018, Tada has received 1.7 million users because it capitalized on increasing demand and the funding unit of its Japanese supporter SoftBank.
However, the ride-hailing agency still faces the specter of rising regulations that has spooked investors, in addition to violent protest from a powerful taxi lobby ahead of an April election.
South Korea restricts ride-hailing to solely licensed taxis and forbids the use of private vehicles for the purpose. Tada has been exploiting a rule that permits the rental of chauffer-driven 11-seaters to function its ride-hailing services, angering the taxi panel and regulators.
Some taxi drivers among the 200 individuals attending the court hearing burst out in anger upon hearing the verdict. Shouts of “how can they be harmless!” rang via the courtroom.
Prosecutors had sought one-year jail terms for officials of Tada and its parent company, arguing Tada was a de facto unlicensed taxi service.
In South Korea, a world IT powerhouse with the world’s highest smartphone penetration, Uber’s journey-hailing enterprise was halted in 2015, two years after its launch, with laws banning the use of ride-hailing providers by non-public cars following fierce protests from the taxi foyer.
Worldwide, ride-hailing services have been on a bumpy trip with regulators. A U.S. judge has refused to cease a California labor regulation that makes it harder for so-called gig financial system workers to be categorized as independent contractors rather than staff from rolling out this month.