CEO of SoftBank-backed SoCar acquitted over ride-hailing app allegations

A Seoul court today acquitted Lee Jae-woong, the CEO of local car-sharing firm SoCar, amid allegations that its ride-hailing service Tada broke local transportation laws, Yonhap News reported.

The court also found Park Jae-wook, head of SoCar’s subsidiary, VCNC, not guilty of the same charges. VCNC, which was acquired by SoCar in 2018, is the operator of Tada.

Photo credit: Benespit

The prosecution requested a one-year jail term each for Lee and Park, plus a 20 million-won (US$16,785) fine against VCNC, according to the report.

In October last year, the two execs were indicted over claims that Tada, which mainly provides transportation service via larger-capacity vans, violates the country’s passenger transport service act. The law prohibits companies from operating paid ride services with rented cars, but carries an exception for rental vans with 11 to 15 seats.

Traditional taxi operators also claimed at the time that Tada threatened their livelihoods and harmed Korea’s taxi industry as a whole.

In response to the allegations, Lee said in a Facebook post that about 1.3 million users and 9,000 drivers benefit from Tada. He also claimed that the firm is one of the top mobility companies that use AI technology the most.

“This service is allowed by the law. The police decided that this doesn’t violate the law, and the transportation ministry has never ordered us to stop for over a year when the service ran,” he wrote.

Launched in 2018, Tada rapidly grew to become one of the country’s leading ride-hailing service providers, mainly serving Seoul’s metropolitan area. After less than a year of operation, the company raised US$44 million in funding from Altos Ventures, KB Investment, Stonebridge Ventures, and SoftBank Ventures.