Middle East tensions, delivery network failures squeeze Korean restaurant owners
A man refuels a motorcycle at a gas station in Seoul, March 6. Korea Times file
"During peak hours, it can take over an hour to complete a delivery. The food gets cold and customer complaints pile up, leaving us utterly frustrated."
Cho, a 41-year-old fast-food operator in Gwangju, is facing mounting losses. With riders now being assigned from up to 5 kilometers away — five or six times the usual distance — delivery delays of 30 minutes just to pick up the food have become commonplace.
"Often, orders are canceled through platform customer service without our knowledge," Cho said. "Every time I have to throw away ruined food, my heart sinks."
Korea's highly efficient food delivery ecosystem is fracturing under the weight of geopolitical shocks and platform algorithms. A surge in global fuel prices, triggered by the fallout from the U.S.-Iran conflict, has collided with falling delivery fees. In response, delivery riders are actively avoiding low-margin, long-distance orders to protect their earnings.
Jung, a 32-year-old delivery veteran of seven years, said falling platform fees and record fuel costs have decimated his take-home pay.
"While it is impossible to verify specifics because platforms do not clearly disclose their delivery fee systems, nothing is left after I pay for fuel following the spike in oil prices," Jung said. "I have no choice but to pick and choose to work only in areas and time periods that are profitable."
The financial squeeze is stark. A survey of 139 riders conducted from April 14 to 21 by the Rider Union branch of the Korean Confederation of Trade Unions’ Public Service and Transport Workers' Union found that 90.6 percent reported a drop in income in March compared to February. The average monthly fuel cost for riders in March hit 315,000 won ($210), jumping roughly 100,000 won from the previous month.
A screen on the delivery app Baemin shows a message that a rider located 4 to 5 kilometers away has been assigned and will arrive in approximately 20 minutes. Courtesy of Hankook Ilbo reader
The systemic failure leaves local restaurant owners absorbing the massive financial and reputational damage of cold food, canceled orders and one-star reviews.
Oh Da-hoon, 29, who runs a rice bowl restaurant in Jeonju, North Jeolla Province, said his time-sensitive menu items are easily ruined by delivery delays.
"It has become my daily routine to call the platform's support center and plead with them to delete malicious reviews whenever I get a low rating," Oh said.
Kwon, 41, who has run a fried chicken restaurant in Ulsan for six years, said the delivery network has effectively collapsed.
"For the past one or two months, there has not been a single case where a rider was assigned in time for the target pickup time," Kwon said. "About 20 percent of total orders get canceled."
Kwon highlighted the lack of transparency that leaves owners defenseless against angry customers.
"Customers who don't understand the system first complain to the store, but owners do not receive information from the platform about rider locations or expected delivery times," Kwon said. "Because the reliance on third-party delivery apps has become entrenched and most sales come through delivery apps, we have no choice but to keep our stores listed, reluctantly."
Hwang, 56, who runs a delivery-only Korean snack food restaurant in Seoul's Seodaemun District, accused platforms of abandoning their partners.
"Platforms take commission fees even from the delivery costs paid by store owners, but they pretend not to know about the delivery delays," Hwang said.
Delivery motorcycles are parked in front of a row of restaurants in Gangnam District, Seoul. / Yonhap
Experts are demanding that platforms take greater responsibility for the crisis unfolding on their networks.
"Platforms need to stop shifting the burden of delivery fees onto store owners or riders, and responsibly mediate conflicts and losses," Lee Jung-hee, an economics professor at Chung-Ang University, said. "They need to play a more active role in maintaining the delivery ecosystem."
This article from the Hankook Ilbo, the sister publication of The Korea Times, is translated by a generative AI system and edited by The Korea Times.