Aju Business Daily

SEOUL -- South Korea's foodservice industry was engulfed in debate after Baedal Minjok, South Korea's most favorite food delivery service app, changed its commission system for restaurant owners from a monthly flat subscription to a fixed rate charged by the number of delivery cases.

Baedal Minjok has been favored by restaurant operators for its flat monthly subscription fee of 88,000 won ($71.60). However, the company changed its fee system on April 1 to charge a 5.8 percent fee on delivery orders. The change came as South Korea's restaurant industry was in trouble due to a COVID-19 epidemic.

"Baedal Minjok has created a situation where its platform must be used to reach more customers and it's making it even harder for business owners in such hard times struck by COVID-19," Ortega, a user from Clien, South Korea's sixth-largest web community, said after boycotting the food delivery service.

Dozens of others followed suit by deleting Baedal Minjok's app, arguing that consumers would have to shoulder the increased commission and the service or quality of food will be degraded as it gets harder for restaurant owners to make a profit. However, some defended the food delivery service claiming that Baedal Minjok has charged a lower fee than competitors.

"The commission rate is incomparably low than other services," said VT, a user who described himself as a person working in a related industry. Yogiyo received 14.5 percent of sales as commission while Coupang Eats received about 20 percent from restaurant owners.

VT pointed out that Baedal Minjok actually helps small and medium-sized restaurants. "Some of you may have realized that the number of flyers for food delivery services being thrown about has drastically been reduced during the last few years."

The Korea Federation of Micro Enterprise (KFME) opened a broadside at Baedal Minjok but some restaurant owners hit by an epidemic actually regard it as a lifesaver.

"We have no customers who visit our store to dine after the COVID-19 outbreak in February but delivery orders have almost doubled," Jeong Won, a 45-year-old Korean restaurant owner in the southern city of Mokpo, told Aju News. "It's true that we may have to pay more as a commission but our sales have also increased. I think we can live with that."

Ahn Mi-ro, a 38-year-old fast-food franchise store owner in the southern city of Busan, agreed. "Without delivery services, we would be left with no customers because only a very small number eats at our store nowadays," she said.

Baedal Minjok's move prompted local provincial governments to develop their own public food delivery service apps with no commission or advertising fees.