From left, Woowa Brothers CEO Kim Beom-jun, CDPI CEO Kang Shin-bong and Coupang Eats Service CEO Kim Myung-gyu / Korea Times file

By Kim Jae-heun

Baedal Minjok, Combined Delivery Platform Investment, formerly known as Yogiyo, and Coupang Eats will face regulatory scrutiny next month over their food delivery fees as the government tries to rein in soaring consumer prices, according to government officials Sunday.

Consumer prices have been soaring in recent months due to a global supply chain bottleneck, rising wages and other costs. And the government wants to keep a lid on food delivery costs to lessen the burden on people's living costs.

The prolonged COVID-19 pandemic has increased demand for food delivery, which prompted service providers to hike delivery costs. Consumers have been complaining about surging delivery costs in recent months, with having meals delivered home costing more than the meal itself in some cases.

The Ministry of Economy and Finance said it will examine and make public each companies' delivery fees and their differences in February, in cooperation with the Korea National Council of Consumer Organizations.

"There is no accurate information on delivery costs, which puts financial pressure on people. We are also concerned that they can suffer damage because of such an irregular price system," a ministry official said. "The government is now in talks with the consumer organization to disclose the price policy of food delivery firms and will share them with the public starting from February."

Baedal Minjok, the No.1 player in the market, said the problem lies with delivery service agencies and not the platform operators.

"If the government decides to share our delivery fee with the public, we have to follow. But we are not responsible for an increase of the cost. Food delivery service agencies set the price," a Woowa Brothers official said. Woowa Brothers operates the Baedal Minjok delivery app.

Finance Minister Hong Nam-ki mentioned the government's plan last December to push for the enactment of the Online Platform Fairness Act, which is currently under review at the National Assembly.

There is no regulation to fix the delivery cost that is frequently changing. Food delivery companies have been adopting different fees according to the time of order, type of food and weather.

Last year, the average delivery cost rose by 30 percent from 3,300 won to 4,400 won in the Seoul metropolitan area. In January, a number of food delivery companies raised the average fee by another 500 won to 1,000 won.

"The price of food delivery has gone too high due to the increasing cost of drivers' labor costs. I saw one person paying up to 17,000 won in delivery fees only," an office worker surnamed Kil said.

People have started to find others who can share the delivery cost through open-chat services. They can order a cup of coffee or chicken menu items together at once.

"Normally, during the dinner time, my neighbors would ask each other if anyone is going to order food online. Then, one person will place the orders for all and we divide the delivery fee," Kil added.

According to mobile application tracker Wise App, the estimated value of transactions at Baedal Minjok, CDPI and Coupang Eats reached 19.37 trillion won from January to October last year. The figure has soared by 3.5 times from 5.6 trillion won two years ago, before the pandemic broke out.

If the business performance in the fourth quarter of last year is reflected, the amount is expected to increase to 24 trillion won. Baedal Minjok, for instance, delivered over 100 million orders per month in 2021.