South Korea's rental van-hailing services have long been taking fire from local taxi drivers who say the service Tada provides is illegal under South Korean law.
And on Monday, SoCar's chief executive Lee Jae-woong and the chief executive of SoCar's rental car hailing service unit, Value Creators and Company, Park Jae-uk were indicted on charges of illegally operating their business without the correct license.
"According to Article 4, Paragraph 1 of the Passenger Transportation Service Act, anyone with a passenger transport business has to obtain a license from the transport minister. Article 34, Paragraph 3 also bans car rental business entities from using their commercial vehicles for paid passenger transport. These were the grounds for Monday's indictments."
The day after the indictment, taxi drivers in Seoul held a press conference and urged Tada to stop running its business immediately.
Meanwhile, drivers of car sharing service Tada say the ban could drag Korea behind in the global economy.
"If you look at the cases of other countries, for instance the U.S. or Southeast Asia, car-sharing services such as Uber are very commonly used. We're now entering the global era, and the Fourth Industrial Revolution, as well as the Age of AI. I fear South Korea may fall behind if we continue to regulate these movements towards the sharing economy."
Tada is maintaining its statement that it has not broken any laws, based on a law that states rented vans with 11 to 15 seats can be offered with drivers.
Attention now turns to the court, which is expected to focus on whether Tada should be considered a type of rental car service, within legal boundaries, or an illegal taxi service.
"The court's verdict is not expected for some time, and it could take as long as three to four years if the case goes all the way to the Supreme Court.
Kim Jae-hee, Arirang News."