The charges claim that VCNC has been operating a taxi service without a proper license after local taxi drivers filed complaints. This has restarted the debate over South Korea's strict transportation regulations.
Park announced his indictment via Facebook saying:
"The prosecution's decision was very bitter to an entrepreneur like me. The world is changing, and we are being left behind. I hope this doesn't hurt the competitiveness of innovation or slow its speed in our country."
Before Park launched VCNC around a year ago he says he consulted with Korea's transportation ministry and a law firm and also stated that police recently finished an investigation and cleared him of any fault.
However, prosecutors believe that the company is operating as an illegal taxi service and using rental cars and a screen.
"We believe people are using the company's service as an on-call taxi," said an official at the Seoul Central District Prosecutors' Office.
This comes around eight months after taxi drivers made their initial complaint. This complaint was made because taxis were worried about how quickly VCNC was growing.
This isn't the only ride-hailing platform to come under fire. At the beginning of this year, taxi drivers held a protest in Korea against Kakao's ride-hailing service. Due to this pressure, Kakao decided to end its ride-hailing service and shifted toward a taxi-hailing platform.
The indictment came on the same day as South Korean's President Moon Jae-in spoke at a developers forum held by Naver where he talked about how the government is focused on increasing innovation and cooperation among businesses.
"Our artificial intelligence will develop faster than anywhere else in the world if all of our scientists, engineers, artists, and students can cooperate, blurring lines between them and transforming how we regulate," Moon said.
However, some startup companies believe the government isn't encouraging innovation at all and believe officials are "arrogant" toward new companies and don't accept new business models.
"Startups are not criminals. Please do not block change," Korea Startup Forum, an association of local startups, stated. "The government speaks of innovative growth and deregulation, but startups are struggling on the boundary of what is a legal and illegal business."
Companies in the medical and tech fields who want to test their new technologies outside of the country are aiming to leave the country rather than face the intense regulations.
"Medical device startups with advanced technology are going to the U.S. and Europe as foreign authorities are more active in reviewing their technology," said an official at Korea Startup Forum. "A facial recognition startup also advanced directly to the U.S. market recently."
Join us November 13-15 for the Property Portal Watch Conference Madrid 2019.