Baemin to waive brokerage fees for orders under $7

Woowa Brothers CEO Kim Bum-seok, left, poses with Rep. Min Byoung-dug, second from left — head of the ruling Democratic Party of Korea’s committee on business contracts with subordinate firms — and representatives from associations of businesses using online food-ordering platforms, after reaching a new agreement aimed at improving business operations at the National Assembly in Seoul, Thursday. Yonhap

Woowa Brothers, operator of the country’s largest online food ordering platform Baedal Minjok, or Baemin, and restaurants using the platform have reached an agreement to exempt usage fees for small orders valued at 10,000 won ($7.27) or less, the company announced Thursday.

The agreement is part of a broader package aimed at improving operating conditions and boosting sales for both small- and medium-sized restaurants and the company. Additionally, Woowa Brothers will support lower-earning restaurants on its platform by subsidizing their delivery fees.

According to the company, the total financial support for restaurants under the package deal will amount to up to 300 billion won over the next three years.

The agreement, which is part of a comprehensive deal to be finalized later, was reached between Woowa Brothers and a coalition of local federations representing businesses using the platform, including the Korea Franchise Union. The ruling Democratic Party of Korea’s committee for subordinate parties in business contracts played a mediating role in the agreement.

“This first segment of the agreement between Woowa Brothers and Baemin-using restaurants will reduce financial burdens for those dine-in and takeout businesses. It will also be a new growth engine for those businesses,” Woowa Brothers CEO Kim Bum-seok said.

The CEO said the agreement was prompted by the growing number of single-person households in the country and the increasing demand for small-value food orders.

“By providing supports for online food orders in smaller values, consumers will benefit from greater convenience and the businesses will see rising sales and lower costs,” he added.

The agreement came in response to concerns that small-value food orders via online platforms impose disproportionately high costs on restaurants. For example, when a restaurant receives an order worth 10,000 won — a typical amount for a single serving — the business can be charged fees up to 40 percent of the total order value for platform usage and delivery.

The company said future support measures will include additional benefits specifically aimed at boosting sales through small-value orders.

The initial agreement also covers the establishment of a dedicated consultation center for Baemin-using businesses and improving the company’s system for handling reports of unfair losses and indemnification requests. Simplifying the paperwork for businesses signing up for the platform and creating a new communication channel between businesses and delivery riders are also part of the deal.

Woowa Brothers said it has been in discussions with the businesses since March to finalize the agreement terms.