But the ride-hailing firm still faces the threat of increasing regulations that has spooked investors, as well as a violent protest from a powerful taxi lobby ahead of an April general election.
South Korea restricts ride-hailing to only licensed taxis and bans the use of private cars for the purpose. Tada has been exploiting a rule that allows the rental of chauffer-driven 11-seaters to operate its ride-hailing services, angering the taxi lobby and regulators.
Ruling that Tada followed current law, Seoul Central District Court judge Park Sang Koo said: "Although ride-sharing has been going through labor pains and accepted in various ways throughout the world...in South Korea, it is difficult to reach a social consensus as the Uber incident and others have shown."
Some taxi drivers among the 200 people attending the court hearing burst out in anger upon hearing the verdict. Shouts of "how can they be innocent!" rang through the court room.
Prosecutors had sought one-year jail terms for executives of Tada and its parent firm, arguing Tada was a de facto unlicensed taxi service.
"A new time has come for those who dream of innovation," Lee Jae Woong, entrepreneur and Head of Tada's parent company Socar, wrote on Facebook after the verdict.
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