[Rider Economics] Delivery Drivers and Restaurant Owners Both Struggling... The Long Road to a 'Win-Win'

Restaurants face high delivery fees and various surcharges... Delivery margins are tight, profits are minimal, causing self-employed owners to struggle
Riders endure dangerous working conditions and poor income structures... Ultimately, platform commissions are the issue

On the 7th, when the temperature in Seoul dropped to minus 15 degrees Celsius and a cold wave warning was issued, a motorcycle delivery worker set out for deliveries during lunchtime on Seosomun-ro, Jung-gu, Seoul. Photo by Jinhyung Kang aymsdream@

[Asia Economy reporters Lee Seon-ae and Lee Seung-jin] Riders (delivery workers) and self-employed business owners are undergoing changes in the industrial ecosystem as partners in the ‘Rider Economy’ business, but both riders and self-employed individuals are having difficult days in their own ways. Despite excessive costs, self-employed business owners have no alternative but to reluctantly use riders through delivery apps and delivery agencies. On the other hand, riders still cannot escape dangerous working conditions and poor income structures.

"The restaurant does the work, but someone else earns the money"

On the evening of the 7th, Kang Won-hyung (alias), who runs a snack bar in Guro-gu, zipped up his boots and, holding delivery food in his hand, said, "Since the order came from a nearby apartment, I will walk there myself," and left the store. About 20 minutes later, he returned and tidied his clothes, saying, "Delivery fees have risen too much, and on days like today, with subzero temperatures and icy roads, various surcharges apply," adding, "These days, I often go out to deliver myself."

When the average delivery agency fee ranges from 4,000 to 6,000 won, self-employed business owners typically split this cost 50/50 with consumers, but they must pay a separate ‘platform usage fee.’ Although delivery app commissions vary, it is generally about 20% of sales (including payment fees). Whereas the past restaurant sales structure was , it has now increased to .

Delivery is enjoying unprecedented prosperity, but the self-employed, who are the core of this industry, are struggling. While it might be avoidable, the absence of customers means that without delivery platforms, their livelihoods could be cut off, creating a widespread sense of crisis. In self-employed communities, business owners share information about delivery operators and strive daily to increase ‘delivery business margins.’

A delivery worker recruitment notice is posted at a local center of a delivery agency in downtown Seoul. Photo by Hyunmin Kim kimhyun81@

"Delivery platform commissions must be lowered"

Gu Gyo-hyun, planning team leader of the Rider Union, explained, "Delivery fees have remained stagnant for 10 years, but the burden on store owners keeps increasing," adding, "It is the delivery platform companies that raised commissions, not the delivery fees themselves."

The Rider Union pointed out that although delivery has become routine and riders play a key role in our economy, the biggest problem is the lack of clear regulations on safety and delivery fees. Team leader Gu said, "Delivery fees are set per order, but because there are no minimum standards, each company is different," and added, "Since every penny counts, riders flock to places that pay slightly more, so the structural problem must be resolved first."

Ultimately, the solution to the rider economy comes down to the issue of excessive commission increases by platform operators. Team leader Gu said, "The market has grown, but both riders and self-employed business owners are struggling," and added, "Delivery agencies should lower commissions to reduce the burden on store owners and increase riders’ delivery fees to resolve excessive competition."

Choi Chi-hyun (alias), who runs a Korean restaurant in Seongbuk-gu, said, "Having worked together, I understand well that riders are in difficult situations," and added, "The government should institutionally encourage competition among delivery platforms to create a virtuous cycle that lowers excessive commissions."

This content was produced with the assistance of AI translation services.