Constitutional Court Upholds Lawfulness of Revised Act that Shut Down Ride-hailing Service Tada

This file photo taken on Dec. 8, 2019, shows a van operated by local ride-hailing service provider Tada in Seoul. (Yonhap)

SEOUL, June 24 (Korea Bizwire) — A revised law that practically forced a leading ride-hailing service out of business last year complied with the country’s Constitution, a court ruled Thursday.

The justices of the Constitutional Court unanimously ruled as constitutional the law limiting the Tada service to rent out its vans only for tourism purposes and requiring the minimum rental hour to be six hours.

The law also requires the cars to be picked up or returned at airports or ports.

Previously, chauffeur-driven Tada vans were able to serve customers without limits on service hours and rental areas.

The National Assembly, following fierce protests from taxi drivers, passed the law in March last year to practically ban the service.

The service “greatly raised social conflicts because it practically offered taxi service but did not receive the same regulations,” the court said, acknowledging the legitimacy of the revised act, which it said was designed to offer a level playing field in the transportation industry.

Taxi drivers hold a rally at Gwanghwamun Square in central Seoul on May 15, 2019, to protest the ride-hailing service Tada. (Yonhap)

The Value Creators & Company (VCNC), the operator of the service Tada, filed the petition against the act in May last year, saying the revision infringed on the right to pursue happiness, the right to equality, and freedom of corporate activities.

The act encroached upon people’s rights to privacy and equality by restricting options for a mode of transportation, the VCNC claimed.

The startup ended the service shortly after the revision was passed following an intense tug of war between technology-driven mobility companies and taxi drivers.

Launched in October 2018, Tada rapidly gained popularity with 1.7 million registered users in a country where it is not easy to grab a taxi in busy commercial areas, especially at night.

Taxi drivers strongly complained that the service was practically an unlicensed taxi business and it threatened their livelihoods. Several of them took their own lives in an apparent protest against it and other similar ride-hailing services.

(Yonhap)