Delivery service providers are causing controversy by forcing restaurant owners in some areas, such as Pyeongtaek, Gyeonggi Province, to cancel Baemin 1 Plus (Baemin's own delivery) and only use store delivery (delivery by agencies).
As the second-largest player, Coupang Eats provides a 100% in-house delivery service, rapidly growing as a result, while the top player Baemin is also expanding its in-house delivery. This has led delivery agencies to pressure restaurant owners.
On the 27th, posts from restaurant owners expressing concerns about delivery agencies demanding a boycott of platform in-house delivery services such as Coupang Eats and Baemin 1 Plus appeared on the online community 'It’s tough being a boss.'
One restaurant owner said, 'If I cancel the in-house delivery for the sake of the delivery agency, the restaurant’s sales will decrease, and who will take responsibility for that? To say that they won't provide delivery services if I don't cancel in-house delivery is an abuse of power. It’s already tough for restaurant owners; let’s find a realistic way to coexist without making it harder.'
Another owner commented, 'Haven't delivery providers been fattening themselves for ridiculous reasons? They have raised delivery fees, charging extra for snow and rain, and night-time deliveries. They’ve shown no signs of coexistence with restaurant owners, and now they can't threaten us.'
In fact, local delivery agencies in Pyeongtaek, including NewTrack, Think Up, and D Plus, notified restaurant owners in the area since the 15th that they would not offer delivery services if they used Baemin 1 Plus, Baemin's in-house delivery service. Instead, they proposed to lower the delivery fee by 500 won for store deliveries through delivery agencies. They claimed in an official statement, 'Due to the economic downturn and the unilateral policy changes of large delivery platforms, both franchises and delivery agencies are facing a serious crisis.'
Previously, last year, there were cases in Changwon, Gyeongnam Province, where some delivery agencies refused to deliver from restaurants that registered services with Coupang Eats.
From a consumer's perspective, in-house delivery by delivery apps is sometimes more convenient than delivery provided by agencies. The rapid growth of Coupang Eats over the past year can also be attributed to its 100% in-house delivery.
In-house delivery allows the delivery app to manage the delivery workers, providing accurate guidance on delivery locations and times. If problems arise during the delivery process, consumers can communicate directly with the delivery workers in the case of in-house delivery.
On the other hand, when agencies handle delivery, it is challenging to track the rider's location in real time. It has been reported that even for Baemin, which has maintained both delivery and in-house delivery services, the preference of consumers for in-house delivery services forces them to focus on in-house delivery.
There are concerns that if delivery agencies pressure owners not to register the delivery app's in-house delivery services, it would not only harm the owners but also increase the burden on consumers. Recently, delivery apps have been competing by directly covering free delivery expenses, but the delivery app only bears the costs for in-house delivery.
For instance, if a restaurant only uses agency delivery without registering for in-house delivery, consumers would have to pay delivery fees to receive deliveries from that restaurant. Restaurant owners are bound to feel insecure as well. If the situation arises where consumers have to pay delivery fees, they might opt for other restaurants or decide not to place delivery orders at all.
However, for consumers who are not members of the delivery app, there are cases where agency delivery is cheaper than in-house delivery. The delivery agencies demanding a boycott also argue in their statements that the commissions paid by owners are lower for agency delivery as well. In the case of Baemin 1 Plus, when a consumer orders 20,000 won, the owner has to pay a commission of 7,000 to 8,000 won, whereas for store delivery, the commission is only a few thousand won.
However, in response to that statement, one owner said, 'Starting in April, with the restructuring of the Baemin app, the commissions that need to be paid to Baemin or delivery agencies will differ by only 0.7%.'
A delivery industry official stated, 'Delivery agencies sometimes demand not only delivery fees but also separate amounts for franchise fees and impose surcharges for various reasons. Ultimately, this burden must be borne by the owners or passed on to consumers,' adding that 'in-house delivery is a more convenient service for consumers, and the preference for this is a market trend.'
One owner remarked, 'Delivery agencies should move towards lowering delivery fees or increasing delivery speed to enhance delivery competitiveness, but demanding a boycott from owners is an inappropriate action.'