Indicting Korea’s Uber
The author is a columnist of JoongAng Ilbo.
When the prosecution indicted executives of the Tada van-hailing service, I thought the act was also an indictment of the government for its impotence and disconnection. Tada has been called a Korean equivalent of Uber. But it can hardly be categorized as a genuine ride-sharing service because it does not share personally-owned cars and instead merely connects rental vans with “surrogate drivers.” It was the best Tada could do given what is permissible under existing laws and what is not.
Tada is in a pitiful situation compared with ride-sharing platforms overseas, such as Uber, Didi Chuxing of China and Singapore-based Grab, which offer diverse services based on big data and whose valuations exceed $10 billion.
The indictment has stamped out the only competitive survivor in the car-sharing segment as politicians and the government gave in to die-hard taxi drivers for fear of losing their votes. Yet President Moon Jae-in is chanting about innovation-led growth and the government promises of new growth led by the shared economy.
Lee Jae-woong, CEO of SoCar — the parent company of VCNC, which operates Tada — has been wrangling with disconnected and incompetent government authorities for more than a year. I have never met him, but still I must speak up on his defense. Lee is a business leader favored by the government. He accompanied President Moon in his monumental climb to Mount Baekdu during his state visit to North Korea last year. He also spoke frankly about the “arrogance” and the “outdated” mindset of the chiefs of the Fair Trade Commission and the Financial Services Commission, as well as the deputy prime minister for the economy. Yet he avoided revenge from authorities.
I support Lee because he is our last and only hope. He has survived this long in the car-sharing business because he has both innovative genes and also connection with politicians. If he cannot achieve success this time, there is not much hope for sharing services in Korea. Chang Byung-gyu, who chairs the presidential committee on the fourth industrial revolution, even likened Tada to the Normandy landings, the largest sea borne invasion in history.
The initial fault lies with the Ministry of Land, Infrastructure and Transport. The ministry endorsed the service when it was first launched in October last year. But the ministry began to get nervous after 70,000 taxi drivers held a massive rally in downtown Gwanghwamun in protest that month.
Two months later, Transport Minister Kim Hyun-mee voiced “opposition to Uber-like car-pool service.” When an association of taxi drivers pressed criminal charges against Tada in February, the ministry backtracked and said it had never recognized legality of the service.
The ministry referred the matter to the prosecution and did not even bother to submit its own opinion about the van-hailing service platform. Amid growing public uproar, it has shifted the blame to the government offices, particularly the prosecution.
The key to resolving the issue lies in fixing the old transportation regulations, but the ministry has no thought of getting around to it. It only has come up with a bill on “innovative platform taxis,” which is actually sneered at by the car-sharing business as a bill aimed at subsidizing the taxi industry. The National Assembly is no better as lawmakers are more mindful of votes from cab drivers and side with their calls to arrest Lee for running an illegal business.
Consumer choice and convenience is the last thing they consider. Passengers must say goodbye to their joy of a quality ride in spacious Tada vans whose drivers do not mind waiting, do not force conversation or talk back rudely or play their choice of radio stations loudly.
New York Times columnist Thomas Friedman said that if horses could have voted, there would never have been cars. The British Red Flag Acts killed the fledgling motor vehicle industry in Britain in the 19th century. Out government is killing the shared economy in Korea in the 21st century.
JoongAng Ilbo, Nov. 7, Page 30