Half of small businesses working with delivery apps have experienced unfair trade, a report showed Sunday.

The Korea Federation of SMEs said it surveyed 200 small restaurant companies that serve chicken, Chinese and other fast food to hear of their business difficulties. The result showed that 48 percent had experienced one or more incidents of unfair trade after joining the delivery app services.

Food delivery apps such as Baedal Minjok and Yogiyo have expanded significantly over recent years, with over 40 million South Koreans having downloaded the mobile phone applications. Some 5 million people order food through the apps monthly, according to the report.

The organization said the ratio of unfair transactions is higher than those reported against department stores at 29.8 percent and large retailers at 15.1 percent.

The largest number, or 27.5 percent, said they were “forced to pay excessive advertisement fees” in return for higher exposure of their restaurants on the apps.

The federation said the delivery app operators have been running programs that decide on the exposure priority and expenses of advertisements through bidding instead of a flat rate, which it said led to a rapid surge in advertisement fees.

Other cases of unfair trade included “unilateral shift of responsibility to the seller” at 25 percent and “lack of written contract” at 23.5 percent.

Despite such complaints, sales of 53 percent of surveyed small businesses surged after working with the delivery apps at an average rate of 21.7 percent.

On reasons for signing on with the delivery apps, the respondents cited sales increase (81 percent), promotion (29 percent) and orders from head offices (5 percent). (khnews@heraldcorp.com)