Coupang: Coupang Eats & South Korean Food Delivery

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Yes.

This is a reward system that companies develop and keep improving over time. This is an example from Coupang, where they categorize drivers into four incentivized groups based on levels. The percentages indicate how much additional income they can earn on top of their regular earnings when they receive orders. The checkboxes show the requirements to reach each level. For example, for the gold level, over 30%, it states that in the previous two weeks, you must have delivered more than 400 orders, with at least 100 orders per week and a 70% or higher acceptance rate. These metrics aim to ensure engagement and consistent delivery. If drivers reject an order, it costs the customer and the delivery platform additional time to assign a new driver. When an order is rejected four or five times, it takes a few minutes for any rider to pick it up. They're trying to reduce this and improve the acceptance rate.

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Well, they're not charging WOW customers for delivery. It's the cheapest. I think in Bom Kim's words, in the last set of results, he mentioned that we charge lower commission and fees than any other restaurant delivery platform in the world. Yet, the business is either not losing money or is just profitable. What are some of the innovations that enabled this?

I can discuss a few things. There are many lessons learned on driver engagement and setting up different incentives so that you're paying only to the group. You essentially have a set of supply curves that differ for each freelancer. Some people are only willing to work at certain prices. How do you ensure you're only paying to satisfy each person's supply curve? You can't do that by paying everyone the highest price. Coupang develops different engagement incentives to ensure enough people are available during peak times. Being competitive and data-driven in the incentives approach is crucial.

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Well, they're not charging WOW customers for delivery. It's the cheapest. I think in Bom Kim's words, in the last set of results, he mentioned that we charge lower commission and fees than any other restaurant delivery platform in the world. Yet, the business is either not losing money or is just profitable. What are some of the innovations that enabled this?

Additionally, freelancers can easily move between platforms. Coupang developed a vendor program where they contract with a vendor owner who recruits and sometimes hires, or uses freelances, riders. These vendors require different levels of commitment from their workers. Coupang pays vendors using a different payout program, pre-announcing payments for different times. One pain point for freelance riders is the uncertainty of income due to fluctuating demand and supply. Sometimes prices are low if there's a lot of supply. The vendor programs have predetermined prices, and Coupang improves over time on how much to pay these vendors. These vendors provide a baseline supply, with freelance quantities added on top, enabling a more stable and cheaper supply pool.

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