Business Owners and Riders Clash Over Delivery App Commission Cap

Self-Employed Business Owners Call to “Push Ahead Immediately” vs. Riders Oppose the Cap as a “Threat to Their Livelihoods” in Clash

Amid ongoing legislative discussions over a commission cap that would limit the total cost of delivery app brokerage fees, delivery fees and other charges to no more than 15% of the order amount, self-employed business owners and delivery riders clashed at rallies, voicing opposing views. Business owners called for legislation to reduce the burden of platform costs, while riders opposed a blanket cap that includes delivery fees, saying it could lead to lower incomes.

According to industry sources on November 5, about 300 riders from Seoul, Incheon and Gyeonggi Province held a rally at 10 a.m. that day in front of the Fountain Plaza at the Blue House in Jongno-gu, Seoul, calling for the complete withdrawal of bills related to a cap on delivery app commissions. On the same day, the National Council of Franchise Owners, the Korea Federation of Small Merchants and Self-Employed People, and other small business and civil society groups held a “Rally Calling for Platform Legislation to Support People’s Livelihoods” on the steps of the National Assembly’s main building, calling for legislation on the Online Platform Act, the Delivery Platform Act and the Act on the Promotion of Mutually Beneficial Cooperation.

Delivery motorcycles waiting on a street in Seoul. Photo by Kang Jinhyeong aymsdream@

Business owners say the burden of commissions and delivery fees is making it difficult to run their stores. They argue that little profit remains after factoring in a 7.8% brokerage fee, a 3% payment processing fee, a delivery fee of 3,400 won paid by the merchant, and advertising, coupon and promotional costs. They are calling for legislation to cap the commission rate at 15% by combining all costs, in order to ease the burden on business owners.

Riders oppose the scope of the cap. They argue that limiting both the fees charged by platforms for brokerage services and the payments made to workers who carry out deliveries could intensify pressure to cut delivery fees. They also say that applying a blanket cap to all costs could threaten the livelihoods of riders and their families. The delivery industry estimates that around 400,000 people work in delivery.

Experts, too, have pointed out that applying uniform commission regulations without taking the cost structure of delivery apps into account could have serious side effects. They say that rather than rushing to introduce regulations, authorities should first listen in a balanced way to all stakeholders, including business owners, consumers, platform companies and delivery workers. They also agree that an impact assessment is needed to thoroughly analyze in advance how regulations could affect market competition, consumer welfare, employment and the industry as a whole.

Lee Yuseok, a professor in the Department of Business Administration at Dongguk University, said, "Delivery apps cannot absorb these losses indefinitely, so they could respond by raising order amounts, adding to the burden on consumers or reducing rider compensation. This means that regulations intended to lower commissions could instead increase costs for consumers, reduce riders’ incomes and lower the quality of delivery services."

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