Young Rider Takes the Stage in Gwanghwamun... "Costs Don’t Disappear by Law"

A Bill Introducing a 'Commission Cap' Submitted to the Political Affairs Committee
Concerns That Costs Will Shift to Riders, Consumers, and Small Merchants
Criticism That "Regulation Violates Fairness and Market Economy Principles"
73% of Consumers Unaware of Win-Win Negotiations

"Delivery app commissions are high, so should we set a cap by law to bring them down? Have you discussed who will actually bear the cost?"

This was the question posed by a young man in his twenties who took the stage to speak on economic issues at a youth conservative group rally held in Gwanghwamun, Seoul, on October 3rd.

On the afternoon of the 3rd, at a youth conservative group rally held in Gwanghwamun, Seoul, Kang Mo, a delivery rider in his 20s, who spoke on economic issues, criticized the Democratic Party's move to introduce a 'delivery fee cap system.' Photo provided by the organizer

Delivery App Commission Regulations Will Shift Costs to Young Riders, Consumers, and Small Merchants

Kang, who introduced himself as a delivery rider working to save up startup capital, said, "In Korea, if a young person works hard, can tomorrow really be better than today? The doors to employment are shrinking, and with the burden of housing prices and living costs, the dreams of home ownership, marriage, and starting a business are moving further out of reach."

He continued, "Yet the Democratic Party claims to be addressing the hardships of merchants by rolling out a series of so-called regulatory laws like the Online Platform Fairness Act and Fair Food Delivery Platform Act. Is the goal now to break down the market economy, disrupt the livelihoods of young people, and damage capitalism itself?"

Kang said, "Does regulating delivery app commissions somehow make these costs disappear? The basic principle of economics is simple: costs do not vanish by force of law. In the end, someone has to shoulder those costs."

He then asked, "Did you examine whether these regulations might make life harder for young riders through reduced delivery assignments, fewer promotions, or scaled-back hiring? Did you even consider that consumers might suffer from lost discounts, higher delivery fees, or diminished service? And have you fully verified whether, if the number of orders drops, small merchants themselves will ultimately be harmed? Is this going to be another policy, like with real estate, where you end up driving prices sky-high again?"

Finally, Kang said, "I call upon the People Power Party: what young people want is not just enough money to get through a single day. Give us back a country where we can dream of tomorrow."

The rally concluded with the reading of a resolution by participating youth criticizing government policy and an encouraging speech from Kim Minsu, Supreme Council Member of the People Power Party.

On the afternoon of the 3rd, participants are reading a resolution at the National Foundation Day youth conservative group rally held in Gwanghwamun, Seoul. Photo provided by the organizer

Delivery Platforms Are Multi-Sided Markets... “We Should Focus on Cost Shifts, Not Just Cost Ceilings”

The questions raised by Kang have already been echoed with concern by many experts.

While regulations such as a cap on delivery fees might appear to benefit partner businesses in the short term by reducing costs, experts warn that, over the long term, the burden may be shifted to delivery riders or consumers, and eventually lead to a decline in small merchant revenues. The Fair Trade Commission has also previously pointed out the possibility of unintended side effects from uniform commission caps, proposing a cautious approach.

Currently, the National Assembly's Political Affairs Committee is reviewing three separate bills related to commission caps for delivery platforms: "The Act on the Fairness of Delivery Platform Transactions" sponsored by Democratic Party lawmakers Lee Kangil and Kim Namgeun, and a partial amendment to the Fair Trade Act sponsored by People Power Party lawmaker Park Jeonghoon, all of which address setting a ceiling on delivery commissions.

While the bills differ in detail, their core is to limit the combined total of intermediary commissions, payment fees, delivery charges, advertising fees, etc. that platform operators charge partner businesses to less than 15% of the corresponding transaction amount per order.

On this topic, Professor Lee Eunhee of Inha University's Department of Consumer Studies presented on "Delivery Platform Regulation: The Need to Consider Cost Shifts Rather Than Just Caps" at a forum hosted in Yeouido on September 9th by Kim Jaeseop, a People Power Party lawmaker who sits on the Political Affairs Committee of the National Assembly.

At the time, Professor Lee noted, "A delivery platform is a multi-sided market—adjusting one cost affects shop prices, delivery fees paid by consumers, and delivery workers’ income. The effect of regulation must not be evaluated solely by how much a single business’s costs decrease; we also have to consider how much consumers end up paying, what choice of services they have, and ultimately, how overall demand shifts within the market."

He added, "The standard for regulation should be consumer welfare in the end, not merely commission rates."

On the afternoon of the 3rd, participants of a youth conservative group rally held in Gwanghwamun, Seoul, marched holding banners with slogans opposing the enactment of the Fairness Act for Restaurant Delivery Platforms (Food Delivery Platform Fairness Act). Provided by the organizer

National Assembly Review: "Regulation Undermines Fairness and Market Economy Principles"... Potential for Trade Friction with Coupang

Many of the issues with capping delivery fees have also been noted in internal reviews by the National Assembly.

In a policy review submitted in March to the National Assembly's Political Affairs Committee, a specialist advisor said, "From the perspective of regulatory fairness, concerns about two-sided markets and cross-network effects expanding market dominance and leading to unfair trading practices are not limited to (food) delivery platforms. Conflicts over commissions also arise in various other platform sectors, so it is worth considering whether it is appropriate to regulate only delivery platforms through separate legislation."

The advisor continued, "Some opinions have raised the need to consider that commission regulations are an unfair intervention in prices that run counter to the principles of market economy, and that certain regulations may violate the principle of excessive restraint, freedom of business, and the market economy itself."

He also included the view of related associations: "If commission caps are set for delivery workers but not for others such as quick-service drivers, this will raise concerns about fairness among different types of workers."

In closing, the advisor pointed out that these laws could trigger international trade friction.

The report notes, "The United States has continually raised concerns that Korea's platform regulation legislation constitutes a trade barrier. There is a possibility that criticism of both the new and amended laws could arise from this perspective. In particular, if strong regulations such as commission caps are applied to large enterprises based on size of transaction or company, and an American firm such as Coupang is subject to them, the risk of trade friction cannot be ruled out."

According to the report, the Ministry of Trade, Industry and Energy also warned, "Platform regulations have drawn strong interest from the U.S. Congress, government, and industry, and the risk of trade disputes over these bills must be carefully managed."

The U.S. House Appropriations Committee’s budget report in January specifically expressed concern that "Korea's online platform law targets US tech firms," and the U.S. Trade Representative—which oversees America’s international trade policy—has discussed South Korea’s regulation of online platforms as a prominent non-tariff trade barrier. Early this year, Han-Koo Yeo, then Deputy Minister for Trade at the Ministry of Trade, Industry and Energy, visited Washington to clarify that Korea’s domestic regulations do not target any specific country or company—part of a broader risk management push.

On the afternoon of the 3rd, at a gathering of youth conservative groups held in Gwanghwamun, Seoul, Minsu Kim, Supreme Council Member of the People Power Party, is delivering an encouraging speech. Provided by the organizer

7 Out of 10 Consumers Are Unaware of Ongoing Discussions... Even Protected Merchants Say Focusing Only on Commission Misses the Underlying Issues

The consumer response has been confirmed through surveys. According to a poll of 1,000 delivery app users in August of last year by the Korea Consumer Education Support Center, 70.3% said they would reduce their usage if regulations increased their delivery costs, and 71.3% said they would order less if free delivery disappeared. The Center reported that 81.8% of respondents had experienced dual pricing—different prices for in-store and delivery orders—suggesting that merchants are already offsetting revenues through delivery pricing, so if delivery fees increase, consumers will bear a double burden.

Meanwhile, consumer awareness of delivery fee-related policies remains low. Just 26.7% said they had ever heard about the government's efforts to broker cooperation between apps and merchants. Last December, the Citizens’ Coalition for Consumer Sovereignty called for more consumer representation in the consultation process, but in the end this was not reflected.

Even among merchant businesses that regulation is intended to protect, there are concerns about these one-sided government initiatives.

Ko Kyungjin, President of the Korea Delivery Platform Merchant Association, presented at a forum last month titled "The Era of a 40 Trillion Won Delivery Market: Strategies for Sustainable Growth and Shared Prosperity." He noted, "It is unrealistic to explain the operational burden for self-employed business owners by platform commission only; overhead costs are much more complex."

President Ko said, "While lowering delivery commissions may offer short-term relief to small businesses, it cannot solve the structural challenges of self-employment. In fact, if policymakers focus too much on the commission issue, more fundamental solutions such as reducing food ingredient costs, alleviating labor expense burdens, providing financial support, and improving business efficiency are likely to be overlooked."

He also commented on the government’s role in policy, saying, "Rather than setting prices directly, the government should focus on fostering fair competition, reducing information asymmetry between platforms and merchants, and mediating conflicts between stakeholders."

This content was produced with the assistance of AI translation services.