Police, "Baemin Real Distance Fare Fraud" No Prosecution for Woowa Brothers

The police decided not to prosecute in the case where delivery workers accused Baedal Minjok (Baemin) of developing an algorithm to fraudulently collect delivery fees per order.
Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Oh Gyumin] The police have decided not to prosecute in the case where delivery workers accused the delivery order application (app) Baedal Minjok (Baemin) of developing an algorithm to fraudulently collect delivery fees per order.

On the 27th, the Mapo Police Station in Seoul announced that it had dismissed the charges against Kim Byung-woo, CEO of Woowa Brothers, who was accused of fraud in early September. Kim was suspected of creating a distance measurement algorithm within the Baemin app and using it to calculate delivery fees, thereby fraudulently collecting delivery fees from delivery workers per order.

"Algorithm introduction was not intentional"... Decision of 'No Charges'

The police judged that Woowa Brothers' introduction of the algorithm to measure distance and calculate delivery fees was not done with the intent to fraudulently collect delivery fees per order. Additionally, the police determined that there was no possibility of manipulation regarding the algorithm measuring delivery distances shorter than the actual delivery distances, and that such results could reasonably occur.

Fraud is a crime established when a person deceives another (by lying or concealing the truth, causing the other party to be mistaken) to receive property or gain financial benefits. The intent to deceive must be proven, but the police found no intent in Woowa Brothers' act of introducing the algorithm.

A police official stated, "We conducted investigations of the accuser and the suspect but could not find evidence to prove the charges."

[Image source=Yonhap News]

"Claims of Delivery Fee Loss"... Related 'Fraud' Case Under Investigation

In June, the Rider Union filed a complaint with the Mapo Police Station, accusing Woowa Brothers of deceiving delivery workers and obtaining financial benefits in the form of delivery fees.

In April, Baemin introduced a self-developed actual distance algorithm and calculated delivery fees accordingly. The Rider Union claimed that the delivery distances calculated by the algorithm did not match the actual distances traveled by delivery workers, causing losses. Specifically, they analyzed 100 deliveries within the Baemin app and reported that the app's distance measurement accuracy was 28%.

The Rider Union also stated that delivery workers mainly use commercial navigation apps such as Naver Map, and that the expected routes on the Baemin app are shorter than those on commercial apps. They said, "When complying with traffic laws and making long-distance deliveries by motorcycle, situations arise where the basic delivery fee is underpaid by 1,000 to 2,000 won."

A Woowa Brothers representative said, "We have nothing special to say regarding the decision of no prosecution," but added, "We will continue efforts to improve the delivery environment for delivery workers, who are partners in the delivery market."

Meanwhile, another fraud accusation related to Baemin is under investigation. In April, the Labor Issues Research Institute Haebang filed a complaint with the National Police Agency against Kim Bong-jin and Kim Beom-jun, CEOs of Woowa Brothers, accusing them of fraud by deceiving customers into believing that all delivery fees were paid to delivery workers, thereby causing customers and restaurant owners to pay delivery fees to Baemin. The investigation is being handled by the Songpa Police Station in Seoul. Professor Kwon Oh-sung of Sungshin Women's University Law Department, who submitted the complaint, stated, "We have been requested to provide additional materials by the police."

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