VCNC Co., the company behind South Korea’s ride-hailing service app Tada, is embarking on an extensive restructuring plan that will reduce its workforce by 50 percent. According to industry sources, VCNC recently sent a notice to its employees outlining the upcoming changes.

The company will initiate a voluntary retirement program with the aim of reducing the current staff of 80 to 90 employees by at least 50 percent within a week. Those who opt for voluntary retirement will be able to cease working immediately and receive a two-month paycheck. The effective date of their employment termination will be June 30.

If the number of voluntary retirements falls short of the 50 percent target, the company plans to conduct individual consultations to recommend retirements.

VCNC has faced significant challenges since its ride-hailing app Tada was banned under the amendment to the passenger transport service act, commonly known as the “anti-Tada act,” in 2020. As a result, the company faced difficulties attracting investments and had to shift its focus to regulated services, abandoning its primary source of revenue. In response, the company introduced voluntary retirement programs in the same year, marking the first time since its establishment.

Tada Basic, the company’s core business model, allowed users to rent an 11-seater van with a driver through a smartphone application. VCNC, which also operates the car-sharing app SoCar, provided rented SoCar vehicles to customers with drivers. Although the business model was considered innovative, it faced resistance from the taxi industry, with traditional taxi drivers labeling it as an “illegal” taxi service.

In 2021, Tada was acquired by the mobile finance platform Toss with the expectation of achieving synergy between fintech and mobility services. However, the company encountered difficulties due to the semiconductor shortage, which impacted vehicle supply.

In addition to the restructuring efforts, Toss, Tada’s parent company, is exploring potential merger opportunities for Tada with another company. The most likely candidate at present is The Swing Co., a personal and micro-mobility sharing service. If the ongoing discussions lead to a successful outcome, The Swing will assume management and representation of the company.

“We are exploring various opportunities to ensure the long-term stability of our management,” said a Tada representative. “More announcements will be made in the near future regarding the merger.”

The Swing, which operates approximately 100,000 electric kickboards, e-bikes, and e-scooters nationwide, has achieved profits for three consecutive years since its launch in 2019. The company expanded its services to Japan in July, with a primary focus on Tokyo.

By Pulse

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