Korean restaurants trapped by delivery apps as fees outpace profits: survey
A government survey shows delivery apps take an average 8.2 percent cut, nearly double what restaurant owners say they can sustain
Korean restaurants have become so reliant on food delivery platforms that many now face a lose-lose choice: absorb fees that exceed their profit threshold or raise menu prices for consumers.
That tension is laid bare in a government survey released Thursday, which shows that delivery apps account for more than a third of small restaurants’ revenue while charging fees well above what owners consider sustainable.
According to a joint survey by the Ministry of SMEs and Startups and the state-backed Korea Commission for Corporate Partnership, restaurants listed on Baedal Minjok, Coupang Eats and Yogiyo generated average monthly sales of 36 percent through delivery apps in the first half of last year. For many businesses, delivery is no longer optional but a core sales channel.
The cost of staying on those platforms, however, is rising. The survey found that the average brokerage fee charged by a restaurant’s top-earning delivery app was 8.2 percent per order. Owners said a survivable level would be closer to 4.5 percent, creating a 3.7 percentage point gap between actual and acceptable fees.
Delivery costs added to the pressure. Restaurants paid an average of 3,333.3 won ($2.27) per order, compared with a “manageable” level of roughly 2,300 won cited by respondents. Costs were higher when using riders directly affiliated with the apps rather than local delivery firms.
Despite widespread discussion of government-led mediation, the data showed no evidence of relief reaching the ground. Not a single respondent said they had benefited from the 2 percent commission rate announced in November 2024 as part of a so-called win-win agreement for lower-revenue merchants. The survey did not clarify whether this reflected eligibility barriers or a lack of implementation by platforms.
Faced with limited bargaining power, many owners said they had few realistic responses. When asked how they would react if delivery costs rose further, the most common answer was simply to endure the burden. More than 4 in 10 said they would raise prices, either on delivery menus alone or across both delivery and dine-in offerings.
Overall satisfaction with delivery apps remained relatively high at 63.2 percent, reflecting their importance in attracting customers. Satisfaction with fee levels, however, dropped to 28.3 percent.
mjh@heraldcorp.com
