Posted on : Jan.7,2020 18:53 KST
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The Democratic Party’s Uljiro committee holds a press conference at the National Assembly on Jan. 6 to call on the Fair Trade Commission for a stringent review of the pending consolidation of South Korea’s top three delivery app services. (Yonhap News)
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Top-ranked Baedal Minjok already accounts for over 50% of delivery app market
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The Democratic Party’s Uljiro committee holds a press conference at the National Assembly on Jan. 6 to call on the Fair Trade Commission for a stringent review of the pending consolidation of South Korea’s top three delivery app services. (Yonhap News)
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A “monopoly” debate surrounding the review of a cooperate consolidation between Baedal Minjok, South Korea’s top-ranked delivery app, and the German company Delivery Hero (DH), which operates second- and third-ranked Yogiyo and Baedaltong, is stoking fears that the consolidation might exacerbate issues involving insecure contracts and transaction fees for delivery workers.
In a press conference held at the National Assembly press center on the morning of Jan. 6, the Democratic Party’s Uljiro committee called on the Fair Trade Commission (FTC) to “give careful consideration to the delivery app industry structure and the effects on delivery app market participants such as micro-enterprises and delivery platform workers when it conducts its cooperate consolidation review.”
Speaking at the press conference, Park Hong-keun, the committee’s chair, predicted, “If DH does gain control [of the market], the monopoly will restrict competition [among businesses] in terms of delivery fees and transaction charges, and the losses will end up being passed on to the delivery app market participants and consumers.”
Fellow lawmaker Je Youn-kyung said, “With Baedal Minjok accounting for over half the delivery app market, it’s obvious that DH will end up with a monopoly on the domestic market if this merger goes ahead.”
“As it becomes more difficult for new businesses to enter the market, we can no longer look forward to competition-based benefits for delivery platform workers,” she added.
With the mobile delivery app market currently amounting to some 8 trillion won (US$6.86 billion) and nearly doubling each year, the Uljiro committee is predicting major changes for the market as a whole within the next few years, including the disappearance of traditional, non-platform-based delivery employment. This has led to concerns about the negative impact the corporate consolidation could end up having on overall working conditions for delivery employees. With Baedal Minjok having recently introduced one-month “split contracts” and a day-based system for calculating delivery transaction fees for its “riders” (drivers), consolidation with the second- and third-ranked companies would take away the other options available to the riders.
“If we take into account the recent Baedal Minjok policies that have substantially increased variability in working conditions for riders, that situation could get worse after the business consolidation,” said Gu Gyo-hyeon, director of the Rider Union planning team.
By Seon Dam-eun, staff reporter
Please direct comments or questions to [english@hani.co.kr]
