Too Expensive Delivery Fees... Seoul City's '2% Commission Public Delivery' Experiment

Full-scale Activation of 'Public Delivery' in Partnership with the Private Sector
Strengthening Administrative and Small Business Support Including Promotion
From Onnuri Gift Certificate Payments to Payback Promotions
Oh Sehoon: "Vicious Cycle Caused by Private-led Market Structure"

Seoul City is launching a 'public delivery' service to support small business owners suffering from delivery brokerage fees approaching 10%. The aim is to reduce delivery fees for small business owners and consumers by lowering the commission to below 2% through public-private cooperation.

At the end of last year, Seoul City entered the 'Seoul Delivery Plus' project, which opposes the monopoly system of delivery applications (apps), as part of the 'Small Business Support Project.' Shinhan Bank's 'Ttaenggyeoyo' was selected as the private operator, and on the morning of the 18th, Seoul City, pilot autonomous districts, and delivery app operators signed a 'Win-win Agreement for the Activation of Seoul Delivery + Ttaenggyeoyo.'

The reason Seoul City entered the public delivery service market lies in the market share concentrated in the three major delivery apps (Baedal Minjok, Coupang Eats, Yogiyo). They dominate over 90% of the market, leading to repeated commission increases due to excessive cutthroat competition. Seoul Mayor Oh Se-hoon, who attended the agreement ceremony, said, "The market structure led by private delivery platforms has brought a vicious cycle of high commissions, rising food prices, and increased burdens on self-employed business owners and consumers," adding, "We will focus on easing the burden on small business owners through this opportunity."

Through this agreement, Seoul City plans to expand cooperation with small business organizations and autonomous districts to increase the number of merchants on the public delivery app and expand the use of autonomous district 'delivery-only gift certificates.' 'Ttaenggyeoyo' is currently operating in 16 out of the 25 basic autonomous districts in Seoul.

In particular, Seoul City will be responsible for administrative support such as establishing plans to activate the public delivery service and promotion. Autonomous districts will support operations and promote merchant expansion and consumer service enhancement. Shinhan Bank, the delivery app operator, will provide benefits such as low delivery brokerage fees and coupon subsidies to expand the number of merchants for 'Seoul Delivery + Ttaenggyeoyo.' Small business organizations and delivery agencies will cooperate in merchant recruitment, delivery support, and public delivery service promotion.

Seoul City will also handle promotion and consumer promotions targeting pilot autonomous districts. In addition to issuing Seoul Love Gift Certificates and 'Ttaenggyeoyo' exclusive gift certificates offering discounts ranging from 5% to a maximum of 15%, additional benefits such as the introduction of Onnuri Gift Certificate payments and payback promotions will be prepared to further expand consumer benefits.

The issue is awareness. Although public delivery reduces commission burdens, there is analysis that small business owners hesitate to use it due to low recognition. Of course, there are cases where it has competed with private apps and achieved results. 'Daeguro,' operated by Daegu City, is a representative example, holding a 10% market share in a city with a population of 2.37 million. Mayor Oh said, "If pilot autonomous districts, small business organizations, and delivery agencies join forces, we can establish this as a leading platform for economic recovery and a win-win delivery culture."