The pending merger between South Korea’s number one food-delivery app Baedal Minjok (Baemin), and Yogiyo, the industry’s second-largest player, has fuelled widespread concerns about monopolistic market behaviour.
In particular, recent changes to Baemin’s fee system from a flat rate to a pre-payment method has sparked controversy, raising concerns over such a monopoly. Woowa Brothers, Baemin’s owner, has apologised for causing controversy over the “open service” fee system.
“Woowa Brothers humbly accept the criticism that we introduced the new fee system without considering the difficult situation of the restaurant owners, hit by the Covid-19 outbreak,” management said in a statement.
Starting this month, the delivery service will apply a 5.8 per cent pre-payment fee to restaurants for food orders. The system is designed to replace the current monthly fixed amount system, which costs 88,000 won (US$71.90) per month. This will result in 5.8 per cent of sales being taken by Baemin as commission from this month. However, small business owners say the changes are not for small businesses.
According to the Korea Federation of Micro Enterprise, stores with monthly sales of 1.55M won (US$1267) or less are eligible for lower fees due to the new policy. Some self-employed people raised the issue, saying that the fees paid to Baemin are excessive compared to the past.
