Price controls on delivery services may shackle riders

A Grab Express delivery driver making his way around Bangkok. Somchai Poomlard

The government’s new move to apply price control measures to online food and parcel delivery services could heap pressure on operators already suffering from losses, while rider partners would be at risk of having their share of revenue diminished, say industry pundits.

On Tuesday, the cabinet resolved to include online food and parcel delivery services in the list of 51 controlled goods and services, based on the Price of Goods and Services Act. The issue was forwarded to the cabinet by the Commerce Ministry, citing the Central Committee on the Price of Goods and Services’s (CCP) consideration and notification.

Deputy government spokeswoman Rachada Dhnadirek said the measure was adopted because of numerous complaints about online services and online food delivery prices.

Pawoot Pongvitayapanu, former head of the Thai E-commerce Association, said online delivery operators face intense competition in the segment, with subsidies and marketing promotions rolled out to court customers.

“The price control is expected to put constraints on operators, who were already playing subsidy and marketing campaign games,” he said.

Paiboon Amonpinyokeat, managing partner at law firm P&P, regarded the price control for goods delivery for online business as “a good move”.

He said he is concerned about these delivery platforms’ business, which could take a toll on local rider partners in terms of revenue sharing, as these service providers still need to maintain their revenue performance.

Source: Price controls on delivery services may shackle riders

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