SoftBank-backed South Korean ride-hailer Tada gets rare win in a market that has been particularly unkind to ride-hailing companies
SEOUL - South Korea’s ride-hailing service Tada, a smash hit since its launch just over a year ago, was cleared of transport law violations in court on Wednesday, a rare victory in a market that has been particularly unkind to ride-hailing companies.
But the ride-hailing firm still faces the threat of increasing regulations that has spooked investors, as well as violent protest from a powerful taxi lobby ahead of an April general election. Some taxi drivers among the 200 people attending the court hearing burst out in anger upon hearing the verdict. Shouts of “how can they be innocent!” rang through the court room.
In South Korea, a global IT powerhouse with the world’s highest smartphone penetration, Uber’s ride-hailing business was curtailed in 2015, two years after its launch, with legislation banning the use of ride-hailing services by private cars following fierce protests from the taxi lobby. Uber now offers limited services.
But after a lawmaker proposed to revise laws in October allowing Tada to only operate vehicles hailed for six hours or more, discussions with SoftBank for $500 million in funding fell through, a source with knowledge of the matter said. Tada’s parent Socar and SoftBank declined to confirm any details on the funding plan by Vision Fund. The bill is still pending in parliament.Tada faces ongoing discussions with the taxi lobby and regulators calling for the company to come up with a plan to co-exist with taxis. Prosecutors may appeal.
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