Riders turn backs on delivery platforms' fee hikes

Members of Rider Union and unions for restaurant owners and employees in the country's food industry protest Woowa Brothers' plan to hike platform usage fee rates in front of its office in Seoul, July 15. Yonhap

Food delivery drivers are voicing their discontent as operators of major online food ordering platforms plan to raise delivery fees charged to restaurants.

According to management companies and industry observers, the riders are unhappy with this move because it primarily benefits the platform operators, not them.

Despite the anticipated increase in sales for the operators, the riders face the same harsh working conditions and high demand without seeing any improvement in their earnings.

In fact, one of the largest delivery platforms has even reduced delivery fees for its customers, which has decreased the amount of money available for the drivers.

Rider Union, the country's first labor union for delivery workers, gathered its members in front of the presidential office in central Seoul on Aug. 22. Restaurant owners using the country's major online food delivery platforms like Baemin, Yogiyo and Coupang Eats were also present there.

Together, they demanded that the administration and the government impose stricter regulations on platform operators to prevent riders and restaurant owners from unfairly falling victim to the planned rate hike and other harmful practices threatening the delivery industry ecosystem.

The protest came after Baemin increased the commission rate charged to restaurants earlier this month to 9.8 percent per order from 6.8 percent.

The protesters urged the government to introduce a new policy to monitor and control online platforms and objected to the current environment where the operators are free from such legal guidelines.

They added that without such measures, it's virtually impossible to express any grievances against major platform operators like Baemin, the biggest platform operator in Korea run by Woowa Brothers, which takes up almost 65 percent of food delivery market shares, in fear of losing customers.

Scooters are parked outside a rider management company's office in northern Seoul, July 6. Korea Times file

The drivers said that they don't "benefit a penny" from the platform operators' rate hike while the degree of their labor remains intense. As their earnings depend on the number of orders they complete, they are pressured by the platform operators to make "express" deliveries.

The delivery option requires them to deliver each order individually in a single trip to reduce delivery time, but limits their ability to handle multiple deliveries at once. Baemin has also recently reduced its fees for customers who don't use express delivery from 3,000 won ($2.25) to 2,200 won, cutting down profits for the drivers and their management firms.

"Riders are in danger now," a Rider Union official said. "Their dangerous working environment is pushing them to ignore traffic lights and drive at unsafe speeds to save delivery time. Their safety, meanwhile, is not guaranteed at all."

To address the country's unleveled food delivery ecosystem, the government has launched a task force with officials from the ministries of finance, food and SMEs as well as the Fair Trade Commission to host discussions between the platform operators, platform-dependent food businesses and the government.

"Operating a major online food delivery platform free of legal guidelines only works when food businesses subscribing to the platform are on par with the platform operators in terms of market power," a business owner in the food industry said. "In reality, the gap is too much."

Following the third tripartite meeting on Tuesday, no agreement has been reached regarding the platform operators' delivery fee rate hikes.