The ninth meeting of the Delivery App Coexistence Council, held on October 30, stretched to nearly seven hours including breaks but failed to reach an agreement on commission reduction. (Yonhap)
SEOUL, Oct. 31 (Korea Bizwire) – After nine rounds of negotiations spanning 100 days, delivery apps and restaurant owners remain deadlocked over commission rates, with positions still far apart at 9.8% versus 5%.
The ninth meeting of the Delivery App Coexistence Council, held on October 30, stretched to nearly seven hours including breaks but failed to reach an agreement on commission reduction.
The meeting, which was the final opportunity to achieve consensus before the October deadline, ended without a breakthrough in reducing costs for small business owners.
When discussions stalled over the critical issue of “reducing commission burden,” public interest committee members introduced a mediation proposal for the first time, but it failed to bridge the divide.
Restaurant owners had demanded a maximum commission rate of 5% with a sliding scale of 2-5%. This represents less than half of the current 9.8% rate charged by major platforms Baemin and Coupang Eats.
Baemin had previously proposed maintaining its 9.8% commission while temporarily offering reduced rates of 2-6.8% only to merchants in the bottom 40% of sales.
Coupang Eats suggested lowering its commission to 5% but requested that restaurant owners absorb delivery costs previously covered by the platform for its Wow members’ free delivery benefit.
After restaurant owners rejected both proposals, mediators stepped in with a compromise: Baemin was asked to reduce its base commission to 7.8% and expand its lower-tier rates to include the bottom 80% of merchants.
For Coupang Eats, mediators proposed a 5% commission rate while requiring the platform to shoulder a significant portion of delivery costs.
Despite negotiations lasting into the evening, no agreement was reached. Sources say Baemin opposed the base rate reduction while Coupang Eats resisted the delivery cost-sharing arrangement.
Baemin said Wednesday it will raise its commission fee for restaurants that have registered for Baemin delivery services to 9.8 percent of food prices from next month. (Image courtesy of Woowa Brothers)
One point of potential progress emerged around the “most-favored-nation” (MFN) clause issue, with both platforms indicating willingness to compromise. This clause prevents restaurants from offering better prices or minimum order amounts on other platforms.
Restaurant owners argue that MFN clauses force them to raise prices across all platforms even if one platform offers lower commissions.
While Baemin expressed readiness to end MFN requirements, it insisted Coupang Eats should take the first step. Coupang Eats has been reluctant to state its position on the matter.
The council will continue discussions on commissions, delivery fees, and MFN clauses at its tenth meeting scheduled for November 4.
Two agreements were reached during the meeting: platforms will clearly display restaurant-paid fees on receipts (showing percentages for commissions and advertising costs), and delivery drivers’ location information will be shared with restaurant owners, despite initial privacy concerns from the platforms.
M. H. Lee (mhlee@koreabizwire.com)
