Tada (TADA) is a South Korean mobility service primarily focused on operating a franchise-based taxi-hailing business. (Image provided by TADA)
SEOUL, Feb. 16 (Korea Bizwire) — South Korean mobility platform Tada has filed a lawsuit against Kakao Mobility, accusing the industry giant of unfair business practices that allegedly restricted competition and harmed Tada’s operations.
According to the information and communications technology (ICT) sector on February 16, Tada’s parent company, VCNC, filed the damages suit last month with the Suwon District Court’s Seongnam branch.
Tada claims that Kakao Mobility steered ride-hailing requests to its own affiliated taxis while blocking those from competing services, effectively limiting consumer choice and stifling market innovation.
The lawsuit argues that such practices significantly undermined Tada’s business, leading to revenue declines for its mid-sized taxi service, Tada Light, and ultimately forcing the service to shut down.
The allegations follow a ruling by South Korea’s Fair Trade Commission (FTC) in December 2024, which fined Kakao Mobility 15.1 billion won ($11.4 million) for anti-competitive practices. The commission found that Kakao Mobility pressured taxi drivers to sign exclusive contracts and penalized those who refused by restricting their ride requests.
This latest legal battle is part of an ongoing rivalry between the two firms. Last year, Tada accused Kakao Mobility of aggressively recruiting its drivers through phone calls and text messages, encouraging them to switch to Kakao-affiliated taxis. Kakao Mobility, in response, claimed that it only provided information to drivers who voluntarily sought career changes.
A Tada spokesperson stated that the lawsuit aims not only to seek rightful compensation but also to promote fair competition in the mobility sector.
Kakao Mobility defended its platform policies, arguing that its dispatch algorithm prioritizes drivers with higher ride acceptance rates to minimize ride refusals. The company also asserted that its affiliation agreements with taxi fleets were necessary to maintain service quality and prevent consumer confusion.
The lawsuit underscores growing tensions in South Korea’s ride-hailing industry as competition intensifies and regulatory scrutiny increases.
Ashley Song (ashley@koreabizwire.com)
