Doubts are emerging about the resilience of South Korea's sharing economy after two executives of a popular local ride-hailing service were indicted last week for operating their company without the necessary license.
Our Kim Jae-hee provides a closer look at the current status and the outlook of the sharing economy in South Korea.
This secure, mutually-beneficial platform connects its hosts and guests,… where rooms are rented out at a reasonable price based on blockchain technology.
But things are not easy for home-sharing services in Korea.
The CEO of the company bemoaned the many obstacles in the way of further expansion,... including outdated regulation.
"A tourism law passed in 2011 only allows foreigners to access homestay services, which are not available for local tourists. Instead of creating a way for local startups to tap into the domestic market, the government blocked it altogether."
Home-sharing is not the only sector that has run into legal roadblocks.
South Korea's ride-hailing platform Tada is in hot water... after company executives were indicted by prosecutors on charges of running the service without a legal license.
Even global sharing economy platforms are failing in Korea, with Uber Eats pulling out of the country last month amid tough competition.
"Local sharing economy platforms are concerned whether Korea can keep up with the global trend,… due to regulatory setbacks and resistance from traditional businesses."
"Sharing economy is fundamentally based on IT technology. So naturally, South Korea should be at the forefront when it comes to adopting sharing economy services. But it's not. It's lagging behind because of regulations that are dragging it down."
Experts say changes are needed for Korea to keep pace with the global competition.
"The Fourth Industrial Revolution and the shift towards the sharing economy is the world's biggest stream of innovation. Korea will have to quickly catch up, and the government should take action to facilitate peace and compromise between traditional industries and new startups."
Expert also added,... that it isn't too late for Korea to fulfill its potential and encouraged the government's push for a "negative regulatory system",... which deems all activities legal unless they are expressly banned by the law.
kim Jae-hee, Arirang News.