Baemin operator scraps revised fees for restaurants

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Baemin operator scraps revised fees for restaurants

Woowa Brothers, the operator of the popular Baemin delivery app, on Friday announced it will scrap controversial revisions to the app’s charging system that critics say hurt restaurant owners as many of them are already teetering on the brink of closure.

Company founder Kim Bong-jin and CEO Kim Beom-jun issued a joint apology Friday for April 1 revisions to the system used to charge restaurants for delivery service.

The apology came just four days after Kim Beom-jun issued his first apology and vowed to improve Baemin’s new rate system and disclose data related to the rate change.

But criticism continued from restaurants, as well as politicians, who blamed Baemin for using its monopoly status to further burden restaurants struggling financially amid the coronavirus outbreak.

Local governments also joined the fray, working to launch public delivery apps like the Baedal Myeongsu app used in Gunsan, North Jeolla.

“We created burdens and confusion for many people by adopting a new rate system without carefully considering the predicament faced by restaurants,” the pair wrote.

“We humbly reflected on the advice from various industries and the criticism from the restaurants.”

The pair also pledged to “do [their] best to return to the previous system as fast as [they] can.”

The changes had been intended to drive restaurants toward Open Service, one of Baemin’s two systems for charging for access to its users and delivery network.

With Open Service, they pay a per-delivery percentage to the app operator.

But many restaurants preferred using Baemin’s Ultra Call service, in which restaurants pay a flat monthly rate of 88,000 won ($72).

Both give restaurants access to banner advertisements that appear in the app.

But the revision would have lowered the price for Open Service and also increased the number of Open Service restaurants that would be displayed in the scrolling list of banner ads, pushing the second-tier Ultra Call ads farther down in the list.

The changes also limited Ultra Call restaurants to a narrower geographic area.

“From now on, we will change key policies by communicating with restaurants on a regular basis,” the Woowa Brothers founder and CEO added in their statement.

Baemin has separately attracted criticism for allegedly cutting down the average pay per order to its delivery riders.

The riders’ union argues they are receiving less compared to last year, while Woowa Brothers say the previous pay level was only intended to be temporary.

In December 2019, Woowa Brothers was acquired by Berlin-based Delivery Hero, which also operates the country’s No. 2 delivery app, Yogiyo. The Fair Trade Commission is currently evaluating the acquisition.

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