[The Editors' Verdict] The Complex Equation of "Delivery Fees"

Before discussing the radical nature of price controls implied by the delivery fee cap system, or the potential distortion of market principles that may arise from it, there are other issues that need to be considered first. It is important to question whether such a system would truly benefit restaurant owners in the mid- to long-term, and whether the resulting harm may instead be shifted onto delivery workers or consumers. Of particular concern is a simplistic approach that ignores context. For example, if restaurant owners are asked, "Would you like it if fees could not be raised above a certain level?"?a question with an obvious answer?who would say no?

However, if instead they are asked, "If prices are artificially suppressed, it could result in unexpected cost increases elsewhere?do you still want to proceed?" the responses could be very different. It is important that the public debate sufficiently reminds everyone that platforms may attempt to offset reduced profits from the fee cap by passing on additional advertising or other incidental costs to restaurant owners.

It is not difficult to predict that if platforms, burdened by declining profitability, become less competitive in their services and shift additional costs to consumers, restaurant owners’ sales may decrease. In such a scenario, smaller businesses that only offer delivery without serving dine-in customers could completely lose their means of survival. This situation could unfold in a manner similar to how rapid minimum wage hikes based on income-led growth theory and uniform working hour regulations have ended up causing greater hardship for the economically and socially vulnerable.

It is also necessary to examine to what extent the government and the ruling party are considering the rights and interests of delivery workers in this debate. Delivery workers argue that the delivery fee cap will directly lead to lower delivery fees, causing their earnings to decrease, and they "strongly oppose fee discussions that are being conducted unilaterally without the involvement of delivery workers" (according to the National Delivery Partners' Association for the Implementation of Sound Policies). The Korean Confederation of Trade Unions Delivery Platform Workers' Union is also raising its voice through actions such as strikes. In the case of the Delivery Platform Workers' Union, they are raising issues with platforms such as Baemin and Coupang lowering delivery fees, and if the fee cap is implemented, it is highly likely that their losses will increase in some way.

Even the public delivery app 'Ttaenggyeoyo' reportedly does not meet the fee cap standard of 15% being promoted by the government and the ruling party. In May, New York City raised its delivery fee cap from 23% to 43%, and San Francisco and British Columbia in Canada have removed such caps altogether. This is because it was confirmed that the fee cap increases costs for consumers and ultimately reduces delivery orders, damaging the industry as a whole. An analysis of delivery transaction data from 14 U.S. regions that imposed fee caps after 2021 showed that consumer costs increased by an average of 7?20% and orders decreased by 7%.

Artificial price controls, and more broadly, excessive 'planning' of the economy and industry, are highly likely to create a balloon effect of pain, shifting side effects to entirely unrelated areas. It is difficult to oppose concerns about the side effects of platform companies’ monopolistic positions. However, given that various regulations and social mechanisms to curb abuse of their power are already in place, and considering that even which law should apply to such price controls is subject to debate, there seems to be little reason?at least at this point?to push forward with such controversial measures. Making a political decision on such a complex equation as if it were a simple calculation is nothing but populism.