"Even When I Was Tired, I Hesitated Because It Was Too Expensive"... Coffee at Highway Rest Stops to Cost in the 1,000-Won Range Next Year
Pilot direct-contracting program at eight rest areas nationwide
Commissions for businesses to fall from 33% to 8-9%
Starting with next year's Lunar New Year holiday, motorists are expected to be able to buy coffee priced in the 1,000-won range at some highway rest areas, as Korea Expressway Corporation introduces a system under which it contracts directly with businesses operating at the rest areas, replacing the previous arrangement in which restaurants, cafes and other businesses were brought in through rest area operators. The government plans to significantly reduce the commission burden on these businesses and ensure that the savings lead to lower food prices and better services.
According to the Ministry of Land, Infrastructure and Transport and Korea Expressway Corporation on Oct. 30, the government is inviting businesses to apply for a pilot direct-contracting program at eight highway rest areas nationwide. The initiative follows up on the "Plan to Reform the Rest Area Operating Structure," announced in July.
Commissions to fall from 33% to 8-9%; coffee to cost no more than 2,000 won
The key aim of the reform is to lower the commissions paid by businesses operating at the rest areas. Until now, Korea Expressway Corporation contracted with rest area operators, which then entered into separate contracts with individual businesses, such as restaurants and cafes. Under the pilot program, the corporation will contract directly with businesses at participating rest areas, eliminating the middlemen.
The ministry expects the direct-contracting system to bring the commission burden on businesses down from around 33% to 8-9%, excluding management fees.
The change customers are most likely to notice is the price of coffee. Korea Expressway Corporation will introduce "value cafes" that sell coffee for 2,000 won or less, alongside regular cafes. The average price of coffee at highway rest areas nationwide is currently around 4,800 won.
The government will also encourage restaurants and snack shops to lower prices and increase their use of domestic ingredients. At convenience stores, it plans to expand discounts commonly found at other stores, including buy-one-get-one-free offers and points and partner discounts.
Selection to focus on taste and price, not "businesses paying the highest rent"
The selection process for businesses will also change. Previously, businesses offering higher rent rates had a relative advantage. Going forward, they will be evaluated comprehensively on the taste and quality of their food, price competitiveness, and store management capabilities. Coffee and food prices, use of domestic ingredients, and convenience store discounts will also be among the main evaluation criteria.
Kim Yoon-deok (right), Minister of Land, Infrastructure and Transport, looks around the shelves at a convenience store in a rest area. Ministry of Land, Infrastructure and Transport.
View original imageSelected businesses must operate their stores themselves. They may not delegate operations to a third party or sell products on a consignment basis. Violations may result in measures such as contract termination.
Measures have also been introduced to reduce concerns about former officials influencing rest area businesses and potential conflicts of interest. Corporations established by groups of retired employees will lose 25 points in the technical capability evaluation, and people with interests involving current or former employees who left their positions within the three years preceding the announcement date will be barred from bidding. The evaluation committee will also be made up entirely of external experts.
Pilot program to begin at eight locations, including Yeoju and Daecheon, next Lunar New Year
The eight rest areas selected for the pilot program are Yeoju Rest Area, Gunwi Rest Area, Jangyu Rest Area, Daecheon Rest Area in both directions, Wolchulsan Rest Area, and Hapcheonho Rest Area in both directions.
A total of 10 businesses will be selected to operate restaurants, snack shops, cafes, and convenience stores. To ensure a stable supply of products and keep prices consistent, some stores and rest areas will be grouped together for bidding. At Yeoju Rest Area, which has a high volume of visitors, the government also plans to bring in community partnership stores, including local favorites and shops run by young entrepreneurs.
Korea Expressway Corporation plans to complete the selection of businesses by early December. After facility improvements and preparations for business operations, the pilot program using direct contracts is scheduled to begin with next year's Lunar New Year holiday.
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Hong Jiseon, Minister of Land, Infrastructure and Transport, said, "As direct contracts reduce the commission burden on businesses operating at rest areas, we will ensure that visitors benefit from the savings. We will also correct unreasonable practices that do not meet the public's expectations."
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