Gov’t to ease regulations that limited start-ups

The government will ease regulations that prevented the operations of start-ups that engaged in second-hand car auctions and ride share services, the Ministry of Land, Transport and Infrastructure said on Tuesday.

The decision came after the regulations forced Hey Dealer, an app that facilitated used car sales, and Call Bus, an app that offered ride shares, to shut down their services.

The start-ups, which were created by young college students, had been thriving before they were forced to close.

The Transport Ministry said Minister Kang Ho-in held a meeting with young entrepreneurs from start-ups including Hey Dealer, Callbus Lab and Uber Korea to discuss issues related to the transportation and logistics businesses.

The Hey Dealer app was created by Seoul National University students in October 2014 to facilitate second-hand car sales online. It was forced to close after the National Assembly passed a revised law on automobile management on Dec. 28, 2015, that required it to own a parking lot of 3,300 square meters (35,500 square feet) or larger and an auction site 200 square meters or larger.

Before it was shut down, Hey Dealer drew much attention from the very start when transactions made through the app numbered in the thousands after just two months of service. After one year, transactions made through the app amounted to an estimated 30 billion won ($25 million).

The app was considered revolutionary because it improved transparency in car sales between car owners and auto dealers.

A bid starts when an individual puts his or her car up for sale on the app. The second-hand dealer who places the highest bid than makes a final check with an automobile specialist before sealing the deal. Car owners get the best offer on their vehicle, and second-hand dealers can save money by getting rid of the middleman.

Call Bus was another start-up that became controversial last year.

The service operated late at night when many public transportation routes are out of service and hailing a cab, especially in the heart of the trendy Gangnam District, is virtually impossible.

Call Bus provided a ride share service by collecting customers through its app. However, strong protest from taxi drivers forced the Seoul city government to ask the Transport Ministry to settle the issue of the service’s legality.

“We will work on finding a solution where the [Call Bus] service can operate late at night when not even many taxi cabs operate in order to reduce confrontation,” a Transport Ministry official said.

“We will guarantee market freedom as much as we can so that companies equipped with new ideas while aggressively using mobile and IT technologies, which are the strong points of this country, can easily enter and freely compete in the market,” Minister Kang said.

BY KIM MIN-SANG, LEE HO-JEONG [lee.hojeong@joongang.co.kr]