Taxi drivers hold a rally in Seoul on May 23, 2019 to protest new ride-hailing services. (Yonhap)
SEOUL, May 29 (Korea Bizwire) — Controversy looms over innovation and protection of victims as the dispute between Tada, a ride-hailing service, and the taxi industry continues to deepen.
Experts argue that the 4th Industrial Revolution and the expansion of the sharing economy has made it inevitable for the ride service industry to go through innovation, but constant effort is needed to protect potential victims.
The peer-to-peer ride-sharing industry is rapidly expanding worldwide except for South Korea, where it continues to face difficulties trying to overcome regulations and opposition from rival industries.
Uber Inc. attempted to enter the South Korean market in 2013 before it shut down all services just two years later after being assessed hefty fines. A series of domestic carpooling firms have also been defeated.
Kakao Mobility recently began its own carpooling business, but has been struggling to find a solution with the taxi industry.
In the meantime, the controversy over Tada has re-sparked the debate on whether to go on with the overhaul of the industry or to protect traditional businesses.
South Korea’s leading car-sharing service provider SoCar launched Tada in November, using passenger vans to offer riding-hailing service.
Choi Jong-ku, chairman of the Financial Services Commission, criticized Lee Jae-woong, founder and CEO of SoCar, known as a strong supporter of ride-sharing services, arguing that Lee was “very rude and selfish.”
Kim Jeong-ho, co-founder of Naver Corp. and CEO of Bear Better, posted on Facebook on Sunday criticizing Lee.
“Ordinary citizens have to purchase their licenses and cars to do business, and it is not okay for large conglomerates and foreign businesses to just sit there and create an app to take over the industry,” Kim said.
Lee responded to Kim’s criticisms, arguing that ride sharing services can be a solution to ordinary citizens who do not have a license, to which Kim retorted that Lee has begun to take interest in the lives of the taxi drivers “all of a sudden.”
South Korea’s leading car-sharing service provider SoCar launched Tada in November, using passenger vans to offer riding-hailing service. (image: Tada)
Businesses and experts argue that Tada’s failure could lead the country to fall behind the global trend of industrial innovation.
“Innovation is inevitable,” said Prof. Hong Sung-geol from Kookmin University.
“If we fall behind global competition due to political and social disputes, it will be like committing a crime against the national economy and future generations.”
Other experts argue that victims should not be neglected in the course of innovation. In order to make this work, compromise and yield are crucial, they say.
“The government and innovative businesses should support the traditional industry to smoothly adjust to the current trend,” said Lee.
Some criticize the government and the industry for their lack of engagement in the current dispute.
“This is a debate that requires a comprehensive approach to the entire traffic industry, but it seems like the government is saving the Tada issue for later, after they are done talking about Kakao’s carpooling service,” said Cha Doo-won, a policy researcher at the Korea Institute of Science & Technology Evaluation and Planning.
“The government’s current approach is inefficient in terms of its method and timing.”
H. M. Kang (hmkang@koreabizwire.com)
