These changes will limit the vehicle rentals for around six hours and consumers will be required to have a boarding pass if the vehicle is rented or it'll need to be returned to where it was rented from.
Tada was founded in later 2018 and since then has become one of the top ride-hailing platforms within the country. It mainly conducts operations within Seoul and provides 11-seat vans instead of the usual sedan car.
With the bill approved by the committee, it'll now move onto the larger parliament soon to be voted on.
If the bill is approved and becomes law it might force Tada to end its operations. Tada's operating company, Value Creators & Company, will have a year and a half to either end their business or stick around by acquiring a taxi service platform license which will be launched through the new bill.
Chief of SoCar, the company that owns Value Creators & Company, Lee Jae-woong, condemned the committee vote stating that the National Assembly and government are "dead."
"The government and the National Assembly that should stand by people's side and look toward the future are now trying to shut down a service that helped mobility of some 1.7 million people," he said. "I'm sorry for users, our startup colleagues and especially for our drivers whose livelihoods are now in great danger."
About a month ago, a court ruled that Tada was a legit rental vehicle platform and all charges against its executive for violating the passenger transport act were lifted.
Tada has been causing waves within the market after taxi drivers claimed the company was violating the transport act by renting vehicles and then charging for rides. The company argued its operations were completely legal and were based on an exception that allowed rental vans to offer drivers.