Bangladesh food

Are we losing our appetite for food delivery apps?

Coupang Eats posted $3.5 billion in operating losses in 2021. The unlisted Yogiyo is not required to disclose earnings, but its earnings structure closely resembles that of its competitors.

The food delivery market has grown rapidly since the start of the Covid-19 pandemic. According to Statistics Korea, the food delivery market last year was worth 25.7 trillion won, 2.6 times more than in 2019.

Announcing his 2021 results at the end of March, Baedal Minjok said the loss resulted from outsourcing – primarily the expenses he paid riders for delivery costs. It spent some 574 billion won on outsourcing last year, a huge jump from 181 billion won in 2020.

Increased competition between platforms has created a vicious cycle.

The increase in delivery costs was driven by the introduction of a one-stop meal delivery service by Baedal Minjok and Coupang Eats. By processing a single order at a time, passengers can deliver individual orders faster, compared to bulk deliveries which see them pick up multiple foods at once and deliver them to multiple locations.

The platforms rushed to recruit the necessary delivery agents for the new service by granting rewards and incentives, which led to a considerable increase in the associated costs.

Has the rise of food delivery apps made life better for delivery people?

Wages and conditions have certainly improved, but even here discontent is still widespread. Unions say delivery workers are among the least protected workers in the economy. Working primarily on-demand as gig workers, riders are entitled to few or no work-related benefits enjoyed by regular workers. Their plea for better protections sparked a debate in South Korea about protecting workers in the gig economy.

Baedal Minjok and Coupang Eats, after a long struggle with union delivery workers over working conditions such as no insurance coverage for traffic accidents, decided to hire full-time delivery workers. Unionists are now demanding an increase in the share of delivery costs that goes into riders’ pockets per order fulfilled.

The Korean Herald

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