Assessment of Recent Legislation on Delivery App Fee Caps and Remaining Challenges

1. Raising the Issue: Consecutive Bills Proposing a Cap on Delivery App Fees

Amid ongoing difficulties in discussions over online platform regulation, legislative debate centered on a cap on delivery app fees is resurfacing. Under the banner of protecting small business owners, there have been continued moves to impose a ceiling on fees or foster public delivery apps. However, careful review is needed as to whether these policy tools will truly produce desirable outcomes for all market participants. In particular, approaches centered on price controls and fiscal spending are highly likely to cause mid- to long-term market distortions, despite their short-term perceived effects.

2. Major Bills and Policy Trends Related to a Delivery App Fee Cap

The National Assembly has seen the introduction of numerous bills that would directly restrict the fee structures of delivery platform operators. These bills generally bundle brokerage fees, payment processing fees, advertising costs, and delivery charges into a single total amount and limit that amount to within a certain ratio, or impose surcharges for violations. At the same time, some local governments are presenting public delivery apps as an alternative while combining budget support with consumer coupon policies. Although the policy instruments differ, they share one thing in common: direct public intervention in the market price formation process. Despite differences in form, these bills all effectively amount to price control policies in that they seek to preemptively restrict platform pricing structures through legislation.

3. Diagnosis and Analysis of the Multidimensional Problems of a Delivery App Fee Cap

The National Assembly has seen the introduction of numerous bills that would directly restrict the fee structures of delivery platform operators. These bills generally bundle brokerage fees, payment processing fees, advertising costs, and delivery charges into a single total amount and limit that amount to within a certain ratio, or impose surcharges for violations. At the same time, some local governments are presenting public delivery apps as an alternative while combining budget support with consumer coupon policies. Although the policy instruments differ, they share one thing in common: direct public intervention in the market price formation process. Despite differences in form, these bills all effectively amount to price control policies in that they seek to preemptively restrict platform pricing structures through legislation.

◩ The Problem of Anti-Market Price Regulation in a Market Where Competition Is Already Working

The delivery app market is already marked by fierce competition, centered on Baemin and Coupang Eats. Consumers choose platforms based not only on fee levels but also on overall service quality, including payment convenience, delivery speed, app reliability, and review systems. In fact, for self-employed business owners who feel burdened by fees, a range of alternatives has emerged, including direct transactions, smaller platforms, and in-house ordering systems. In this environment, setting a government price cap is highly likely to dampen private-sector innovation and differentiation efforts.

The core of the three bills is that they do not view fee levels as outcomes formed in the market, but instead seek to set limits in advance through legislation. This approach treats platforms in a manner akin to public utility industries such as electricity, water, and railways, and thus fails to adequately reflect the characteristics of a competitive private service market. In particular, the “aggregate cap” method effectively makes flexible pricing based on individual services, regions, and promotional strategies impossible.

◩ The Possibility of Shifting the Burden to Consumers, Suppressing Demand, and Distorting the Market

If a fee cap is introduced, platform operators will likely choose other ways to recover costs in order to maintain their revenue structures, such as scaling back free delivery, raising delivery charges, or reducing discounts and subscription benefits. This would increase the burden on consumers and, given the price-sensitive nature of delivery services, could directly lead to fewer orders. In the end, regulation intended to protect self-employed business owners risks producing the paradoxical result of reducing their sales.

During the COVID-19 period, major U.S. cities introduced caps on delivery app fees, but later experienced side effects such as higher delivery charges and declining order volume. Platforms passed their lost revenue on to consumers through higher fees, resulting in weakened demand and reduced services. In many areas, the policy was repealed or eased. This shows that price regulation introduced with good intentions can weaken market functions and undermine consumer welfare.

◩ Negative Effects on Competition and Innovation

The delivery platform market has developed through competition over fees, delivery charges, promotions, and service quality. If the total amount of fees is uniformly capped, competition among platforms will weaken, and the entry of new businesses and differentiated strategies will be significantly constrained. Over the long term, this is highly likely to reduce consumer choices and lower the efficiency of the market as a whole.

4. Follow-up Legislative Tasks and Recommendations: Defeat at the Standing Committee Stage and Failure to Reach the Plenary Session

Policies to protect small business owners are necessary. However, the method should not center on price controls or fostering public platforms. The role of the central and local governments is not to force fee caps, but to ensure fair competition among platforms, increase the transparency of fee structures, and make it easier for smaller platforms to enter the market. Excessive intervention in the delivery app market is highly likely to end up burdening consumers, small business owners, and delivery riders alike. A delivery app fee cap is an issue that should be approached only after more careful consideration of both its effects and side effects.

If unfair conduct by platforms is the problem, then policy should focus not on price controls but on transparency in contract structures, clear disclosure of fee components, and the promotion of competition among platforms. A fee cap may be an easy political solution to understand in the short term, but in the long term it is highly likely to entail the costs of increased consumer burdens and market contraction. To achieve the policy goal of protecting self-employed business owners, solutions should be sought not through directly controlling prices, but by expanding market choice and competition. In other words, the bills proposing a cap on delivery app fees should be voted down at the National Assembly standing committee stage and prevented from advancing to the plenary session.

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Original title: 최근 배달앱 수수료 상한제 입법 평가와 과제

Author: Center for Free Enterprise (CFE)

Date: 2026-01-09

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=issue&pn=1&idx=28481