Institutional Frameworks and Policy Challenges for the Sustainable Coexistence of Platform Startups and Traditional Industries: The Case of the Tada Ban Law in the Korean Mobility Sector
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With the advent of the Fourth Industrial Revolution and rapid advancements in AI technologies, many industrial sectors are undergoing significant transformations. The emergence of new services and platform-based companies has brought not only innovation but also frequent clashes with traditional industries. A prime example of this conflict is the amendment to the Passenger Transport Service Act, known as the Tada Ban Law, which effectively banned the mobility platform service Tada in Korea. This paper examines the legislative process of the Tada Ban Law to explore the structure of the conflict between traditional industrial frameworks and emerging platform-based businesses. It addresses concerns about the monopolistic tendencies of platform firms and proposes policy measures to encourage market entry by new competitors to enhance consumer welfare. Drawing on comparative cases of ride-sharing services in the U.S. and Europe, the paper outlines regulatory standards and institutional approaches applicable across sectors. The study recommends transitioning from a comprehensive to a negative regulatory framework, establishing clearer classification criteria for regulation targets, and utilizing regulatory sandbox systems. It emphasizes the role of government and regulators as mediators in conflict resolution to establish a policy foundation that allows platform startups and traditional industries to engage in fair, sustainable competition.
Abstract
With the advent of the Fourth Industrial Revolution and rapid advancements in AI technologies, many industrial sectors are undergoing significant transformations. The emergence of new services and platform-based companies has brought not only innovation but also frequent clashes with traditional industries. A prime example of this conflict is the amendment to the Passenger Transport Service Act, known as the Tada Ban Law, which effectively banned the mobility platform service Tada in Korea. This paper examines the legislative process of the Tada Ban Law to explore the structure of the conflict between traditional industrial frameworks and emerging platform-based businesses. It addresses concerns about the monopolistic tendencies of platform firms and proposes policy measures to encourage market entry by new competitors to enhance consumer welfare. Drawing on comparative cases of ride-sharing services in the U.S. and Europe, the paper outlines regulatory standards and institutional approaches applicable across sectors. The study recommends transitioning from a comprehensive to a negative regulatory framework, establishing clearer classification criteria for regulation targets, and utilizing regulatory sandbox systems. It emphasizes the role of government and regulators as mediators in conflict resolution to establish a policy foundation that allows platform startups and traditional industries to engage in fair, sustainable competition.