[Exclusive] To Become a Top Delivery Company... Must Check Rider's Criminal Record

Ministry of Land, Infrastructure and Transport's 'Certification Standards for Small Parcel Delivery Businesses'
Riders Must Undergo Safety Training and Work to Prevent Industrial Accidents
Use of Standard Contracts and Corporate Ethics Included in Evaluation Criteria
Top Companies Eligible for Incentives and Participation in Mutual Aid Association Establishment

[Image source=Yonhap News]

# In February, a rider (delivery person) affiliated with a food ordering platform exposed his genitals to a female resident in an officetel elevator and fled. Previously, in October 2019, a national petition was submitted requesting restrictions on employment of sex offenders as riders. The number of riders working in delivery has increased to nearly 200,000. There is a growing call to enhance the credibility of riders' identities to preemptively alleviate consumer anxiety.

Going forward, the government has decided to evaluate delivery platform companies on financial soundness, corporate ethics, and rider safety training to select outstanding operators. In this process, the use of standard contracts and management of riders' criminal records will also be examined. The aim is to bring companies that provide safe and reliable services into the regulatory framework to restore market order.

According to the industry on the 22nd, the Ministry of Land, Infrastructure and Transport recently gathered opinions from major delivery companies and prepared certification criteria to operate the ‘Small Parcel Delivery Business Certification System.’ This certification system is stipulated in the Act on the Development of Living Logistics Service Industry (Living Logistics Act), which will be enforced from the 27th of next month. The certification targets businesses that have information and communication networks and personnel systems and directly deliver cargo using two-wheeled vehicles or mediate such deliveries. This includes delivery agency platforms such as Saenggakdaero, Barogo, and Vroong, as well as delivery application operators like Baedal Minjok and Coupang Eats, and quick service companies.

Rider Training, Corporate Ethics, and Qualification Evaluation... Incentives for Outstanding Operators

According to the Small Parcel Delivery Business Certification Criteria obtained exclusively by Asia Economy, the government will evaluate three main areas with a total score of 100 points: ① Worker Protection ② Consumer Protection ③ Stability and Sustainability. Detailed evaluation items for area ① include rider safety training implementation and efforts to prevent industrial accidents. Whether riders are enrolled in paid transportation insurance and industrial accident insurance, and whether contracts equivalent to standard contracts are used, will also be examined.

Government Cargo Delivery Business Certification Review Standards Draft

In area ②, to protect consumers, the evaluation will check customer personal information protection, service quality management and complaint handling, and management of riders' criminal records. Area ③ will assess whether the company has sufficient personnel and financial stability, and evaluate the sustainability aspects such as service coverage and management goals. Efforts in stable information network operation and research and development (R&D) to improve service quality will also be evaluated. In particular, compliance with relevant laws such as the Living Logistics Act, the Fair Trade Act, and the Industrial Safety and Health Act within the past two years will be checked, and 5 points will be deducted if there is a record of serious administrative sanctions.

The Ministry of Land, Infrastructure and Transport will certify companies that score above a certain threshold as outstanding operators and provide incentives such as tax benefits. A ministry official said, "We plan to establish a mutual aid association centered on outstanding operators to reduce riders' burden of paid transportation insurance premiums," adding, "This will give them an advantageous position when recruiting riders."

Participation of Small and Medium Delivery Agencies in Certification System is Key

The issue lies in whether small-scale delivery agencies will participate in the certification system. Delivery agency business is a free business that can be established without separate permits, and participation in the certification system is left to the discretion of companies. Because of this, there are concerns about the unchecked misconduct of companies outside the regulatory framework. A ministry official stated, "If companies feel overly burdened by participation in the certification system or judge it to interfere with their business, they may exit the system," and added, "We will prepare certification criteria at an appropriate level so that as many companies as possible can participate."

For the outstanding operator certification system to be effective in the market, incentives are needed to bring not only the ‘big three’ companies?Saenggakdaero, Barogo, and Vroong?but also small and medium delivery agencies into the regulatory framework. An industry insider said, "Even if you combine the market share of the big three companies, it only accounts for 30%," and pointed out, "There is a possibility of a ‘balloon effect’ where companies not participating in the certification system disrupt the market using various promotions and bait products."