Seoul City to release food delivery app with lower commission

Park Sae-jin Reporter() | Posted : June 25, 2020, 17:19 | Updated : June 25, 2020, 17:19

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SEOUL -- Seoul City will release its own food delivery app to meet demands from customers and restaurant owners who have called for low commission fees. The app will hit the market as early as September.

South Korea's thriving food delivery service market led by Baedal Minjok, a food delivery service app operated by Woowa Brothers, faced unexpected criticism in April this year when the delivery giant tried to make changes to commission from a monthly flat subscription to a fixed 5.8 percent rate charged per number of delivery cases.

To ease the burden of increased commission, local governments have released public delivery service apps that demand lower fees, drawing a positive response from customers.

Seoul said in a statement on Thursday that it would release "Zero Baedal Union," a public food delivery service app involving some 10 delivery and digital payment companies that demand less than two percent commission from restaurant owners. 

"We wish that Zero Baedal Union will change the food delivery market into a fair market which small business owners can benefit from," Seoul Mayor Park Won-soon was quoted as saying. He said that small business owners suffer because of monopoly.

Seoul said the new public delivery app can establish a win-win relationship with small businesses. To increase the participation of restaurants, Seoul will provide information about Zero Pay franchise stores.

Zero Pay, a Seoul-based digital payment system, was launched in 2018 with zero transaction commission by allowing direct peer-to-peer transactions between franchise stores and customers. The system has its own digital and paper vouchers that provide discounts of up to 10 percent. Seoul officials encourage consumers to use Zero Pay vouchers at local markets.

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