Why Korea’s Public Delivery Platforms Keep Failing

In South Korea, ordering food online has become a near-ubiquitous part of urban life. Apps like Baemin (Baedal Minjok) and Coupang Eats now occupy the same civic space once held by phone directories and sidewalk menus. What began as a convenience has evolved into infrastructure — a core layer of daily commerce, especially for small restaurants and independent vendors.

But that infrastructure is increasingly expensive.

In April 2025, Baemin began charging a 6.8% service fee on pickup orders, a move that reignited widespread frustration among small business owners. Many had already expressed concern over high commissions on delivery orders — which can range from 6% to 27% depending on location, promotion, and algorithmic ranking. The introduction of pickup fees felt like a last straw.

For years, platform operators have justified these fees by pointing to visibility, logistics, and marketing. But for restaurants with slim margins and volatile traffic, the math rarely adds up. They're no longer just paying to be discovered — they're paying to be found at all.

In response to this growing imbalance, local governments across the country have experimented with a bold countermeasure: public delivery platforms. From Busan's Dongbaektong to Ulsan's UlsanPedal and Gunsan's Baedal-ui-Myeongsu, these city-run apps promised lower fees, stronger local loyalty, and an alternative to corporate monopoly.

Today, most of those apps are either shuttered or functionally dormant.

Why did they fail — and what does their failure reveal about the deeper challenges of digital governance in Korea? Was the problem technological, economic, or institutional? More importantly: can public platforms be saved — or was the idea flawed from the start?

Convenience at a Cost

In theory, platform capitalism offers a win-win. Consumers get seamless convenience. Merchants get access to massive user bases without building costly digital infrastructure themselves. But in practice, the balance of power has shifted dramatically — and often invisibly — in favor of the platforms.

Apps like Baemin and Coupang Eats have become quasi-utilities in South Korea’s urban economy. With over 30 million users across the major platforms, they now serve as the default interface between local businesses and their customers. This scale gives them enormous leverage — both in pricing and in data.

The platforms determine who gets visibility, which restaurants are promoted, and even what delivery times appear favorable to users. These decisions are not transparent, and they are rarely negotiable. For small vendors, the cost of non-participation is digital invisibility.

And then there's the matter of fees.

While commission rates vary by service type and promotional tier, some restaurants report paying as much as 20% to 27% per order once all fees are factored in. This is on top of discounts they may offer to remain competitive, and the cost of customer complaints, late delivery penalties, or promotional packages they’re algorithmically nudged into purchasing.

In response to criticism, platform companies often cite investment in marketing, app development, customer support, and logistics. But the core problem isn’t the idea of fees — it’s who gets to set the rules, and whether those rules are fair, accountable, or adaptable to public needs.

The private platform model has no built-in obligation to local economies. Its primary allegiance is to growth and shareholder return — not equity, transparency, or sustainability.

In this environment, public alternatives aren’t just a symbolic gesture. They are a necessary policy response. But that response has, so far, largely failed.

The Rise and Retreat of Public Platforms

The COVID-19 pandemic gave rise to a burst of digital experimentation from local governments. Faced with widespread economic shutdowns and a surge in delivery dependence, dozens of South Korean municipalities launched public delivery apps. The promise was simple: low (or zero) commission fees, no advertising costs, and direct local benefits through region-linked payment systems.

Apps like “Dongbaektong” in Busan, “Ul-san Pedal,” and “Baedal-ui Myeongsu” in Gunsan emerged as alternatives to private giants, designed to serve both small businesses and consumers in a time of crisis. By early 2022, over two dozen public delivery apps were operating across the country.

But by 2025, most have faded into irrelevance — or been shut down entirely.

Despite the low cost structure and local support, many of these platforms failed to maintain user engagement or technological competitiveness. Users complained of clunky interfaces, slow updates, and limited restaurant options. For small vendors, the burden of learning yet another interface — without guaranteed order volumes — often proved too much.

Even in cities where user growth appeared promising, the apps struggled to survive post-pandemic normalization. When major private apps dropped their commissions temporarily or rolled out aggressive promotions, public platforms were quickly outpaced. Their lean technical foundations, often outsourced to budget developers, lacked the infrastructure for continuous improvement, real-time updates, or scalable user support.

Take Busan’s “Dongbaektong.” Launched with strong local support, it grew to over 23,000 app downloads and 11,000 merchants within a year — yet only 1,800 were consistently active. By 2023, the app was shut down. Others, like Gunsan’s “Baedal-ui Myeongsu,” once considered a national model, saw usage drop by 50% over two years.

The lesson? Public platforms cannot survive on values alone. Without technological parity, user-centric design, and sustained investment, they risk becoming digital ghost towns — noble but obsolete.

Rethinking Public Tech — Beyond Crisis Projects

The wave of failed public delivery apps across South Korea is not merely a matter of flawed interface design or weak promotion. At its core, it reflects a deeper institutional problem: the state’s tendency to treat digital services as one-off crisis interventions, rather than as long-term public infrastructure.

During the COVID-19 pandemic, local governments rushed to launch public delivery platforms to support small businesses and counterbalance the dominance of private apps. But these services were treated like temporary tools — hastily developed, poorly integrated, and quickly abandoned once the crisis faded. Digital platforms, however, are not static products. They are living systems, requiring continual upkeep, iteration, and trust.

Most municipalities have misunderstood this. They see digital tools as items to procure, not systems to manage. Once a public app is launched, maintenance becomes an afterthought, outsourced to small contractors with little long-term support. But digital governance is not about launching apps — it’s about sustaining them. That requires in-house technical capacity: teams that understand how to build, improve, and adapt digital systems in sync with evolving civic needs.

If cities are serious about building public digital services, they need permanent digital units — not just procurement departments. These teams must go beyond delivery apps. They should oversee integrated platforms that connect local payment systems, manage region-wide consumer data, monitor neighborhood-level demand, and design digital services around actual civic use. A delivery app is just the beginning — the real goal is to create a local digital ecosystem that supports both citizens and small businesses.

For example, data collected from delivery transactions could be used to inform infrastructure decisions, like where to improve pedestrian access or optimize waste collection. Regional currencies like Dongbaekjeon or Ulsan Pay could be more meaningfully linked to incentive structures for eco-friendly behaviors, or targeted support for vulnerable merchants. These are not technological fantasies — they are administrative choices.

At the center of it all is trust. People do not reject public platforms because they oppose public services. They reject platforms that are poorly built, insufficiently maintained, and designed without them in mind. What failed was not the idea of a civic tech platform — what failed was the execution.

A new public technology model must begin by shifting the government’s own mindset: from short-term digital fixes to long-term civic infrastructure. Digital services should not be crisis tools. They should be foundational instruments of responsive, equitable governance.

New Model for Civic Tech

If South Korea’s public delivery platforms are to become more than temporary counterweights to corporate giants, they must evolve into a different kind of public infrastructure — one rooted in sustainability, openness, and local governance.

Sustainability begins with permanence. Municipalities must stop outsourcing their digital presence to external vendors on short-term contracts. Instead, they should invest in building permanent in-house digital teams — not just IT departments, but multidisciplinary units staffed with designers, developers, data analysts, and civic researchers. These teams would not only manage platforms but continually iterate them based on user feedback, behavioral data, and changing local needs.

A civic tech platform is never “done.” It is a service, not a product. Without stable technical stewardship, even the most promising initiatives degrade over time. Public apps must be treated like roads or schools — infrastructure that requires consistent funding, care, and upgrading.

Openness must follow. Most public platforms in Korea today operate as digital silos: they do not share APIs, publish data, or support third-party development. This is a missed opportunity. When public services are closed, they cannot scale. When they are open, they can be improved by the broader ecosystem — universities, civic hackers, local startups, and policy researchers.

Imagine a platform where restaurant data, delivery volumes, consumer patterns, and local economic metrics are anonymized and publicly accessible. Researchers could track neighborhood recovery. Urban planners could model demand. Citizens could propose better features. Openness is not a security threat. It is a pathway to innovation — and accountability.

Localism is the final cornerstone. Digital services must be rooted in place. Too many public tech efforts fail because they copy national-level templates or commercial models, without understanding local conditions. A successful civic platform must reflect local languages, local payment systems, neighborhood rhythms, and merchant capacity.

For instance, the delivery needs of dense, aging districts in Busan differ from those of industrial corridors in Ulsan or inland towns in Gyeongnam. A one-size-fits-all app will fail them both. A federated approach — where a shared platform backbone is customized to each locality — could allow for efficiency without sacrificing responsiveness.

Localism also means treating public digital tools not just as economic instruments, but as community infrastructure. When platforms are designed with small merchants, delivery workers, and users as co-creators — not just consumers — they generate trust, belonging, and participation.

This is not only possible. It’s necessary.

The failure of many public delivery apps was not a failure of intent, but of imagination. Local governments wanted to help. But they tried to solve platform capitalism with platform mimicry — and fell short. A new approach demands not imitation, but invention.

South Korea has the capacity. It has the engineers, the users, and the civic spirit. What’s needed now is a bold reinvention of public digital services — one that sees them not as short-term countermeasures, but as long-term assets in a more resilient, equitable urban future.

From Counterweight to Catalyst

The rise and fall of public delivery apps in South Korea is not simply a story about failed software or vanishing users. It is a window into how local governments respond to structural inequality — and what happens when the tools of intervention are not given the chance to mature.

These platforms emerged in a moment of urgency: the pandemic laid bare the economic fragility of small merchants, and cities responded with speed and good intent. But speed alone was not enough. Without sustained support, technical investment, or user-centered design, the platforms faltered — not because they were unnecessary, but because they were underbuilt.

Meanwhile, private delivery apps continue to consolidate market share, shape consumer behavior, and extract value — not just from diners, but from the small businesses that keep neighborhoods alive. The imbalance is widening. And it demands a smarter, stronger, more visionary public response.

That response cannot rely on slogans or subsidies alone. It must build capacity — digital, institutional, and social. It must treat civic tech as a core function of governance, not a campaign experiment. And it must create platforms that are not just usable, but meaningful — not just for the state, but for the people it serves.

Public delivery platforms were never going to replace private ones overnight. But they could have shown an alternative. And perhaps they still can.

With the right structure, with genuine openness, and with long-term commitment, public digital infrastructure can be more than a counterweight. It can be a catalyst — for economic fairness, community resilience, and a more democratic digital future.

That opportunity is not gone. But to seize it, cities must stop chasing users — and start building trust.