The Democratic Party of Korea held a discussion titled 'A Perspective on Consumer Welfare from Delivery Apps (Applications)' and pointed out that the criteria for setting the 'intermediary fees' of delivery platforms are opaque. They criticized that delivery platforms such as Baedal Minjok, Coupang Eats, and Yogiyo do not transparently disclose the criteria for setting intermediary fees, resulting in a burden for vendors and consumers by passing on costs.
The discussion held on the 17th at the National Assembly's lawmakers' conference room included Democratic Party of Korea lawmaker Lee Kang-il as the chair, along with Jeong Ji-yeon, Secretary-General of the Korea Consumer Agency, lawyer Lee Joo-han (Minbyun-Movement for Democracy and Economy Committee, People's Solidarity for Participatory Democracy Executive Committee), Kim Eun-jung, Head of the Cooperative Secretariat of People's Solidarity for Participatory Democracy, and Lee Jung-soo, Secretary-General of the Korea Consumer Organization Council.
Additionally, among the discussion participants from the delivery app industry were Kim Yong-seok, Head of External Communication at Woowa Brothers, and Yoo Seong-hoon, Head of Planning and Coordination at Coupang Eats.
The presentations that day were ▲Issues and Improvement Strategies of Delivery Services from a Consumer Welfare Perspective (Jeong Ji-yeon, Secretary-General of the Korea Consumer Agency) ▲Legal Issues in the Debate on Delivery Intermediary Fees and Free Delivery (Lawyer Lee Joo-han).
The presenters argued that the opacity of the process in determining delivery intermediary fees and the possibility of collusion among dominant market players necessitate the transparent disclosure of the fee-setting process.
This is aimed at preventing side effects, such as delivery food prices being more expensive than in-store food prices or the burden on vendors increasing under the pretext of free delivery, ultimately resulting in higher food prices.
Jeong noted that based on the 2021 price survey of delivery apps by the Korea Consumer Agency, 57% of restaurants sold food on delivery apps at prices higher than in-store due to the 'free delivery' policy of delivery apps.
This was attributed to delivery app vendors passing delivery prices onto the menu or encouraging the use of discount coupons, and they emphasized the need for transparent information disclosure regarding the setting of delivery fees and the burden bearers.
Lawyer Lee criticized that although an agreement was reached through a cooperative committee for win-win between delivery apps and vendors to apply differentiated fees, the criteria are vague. Delivery apps decided to apply fees divided into ranges of ▲top 35% (7.8%) ▲35% to 80% (6.8%) ▲80% to 100% (2.0%) and also to divide the delivery fee into ranges of 1,900 to 3,400 won.
However, Lawyer Lee pointed out the opacity of information, stating, 'A store selling four chickens a day is also included in the top range, so vendors cannot understand why they are included in that range.'
In response to these criticisms, Woowa Brothers (Baedal Minjok) and Coupang Eats stated, 'We have introduced a new fee system based on differentiated fees by sales range through the cooperative committee and will continuously improve it.'
However, they explained, 'The setting of food prices is the vendors' decision, and we cannot conclude that the double pricing occurs due to free delivery.'
Lawmaker Lee Kang-il stated, 'Free delivery and single order delivery services have led to enormous sacrifices for self-employed workers due to the cost transfer of delivery platforms, and ultimately, the burden is returned to consumers through minimum order amounts and double pricing,' adding, 'Social dialogue is essential for delivery services to move in a sustainable direction.'