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Labor ministry to meet with unions, Uber Eats, foodpanda May 29

05/15/2024 10:19 PM
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Delivery workers, including some working for Uber Eats and foodpanda, take part in a protest calling for better protection of their rights in 2021. CNA file photo
Delivery workers, including some working for Uber Eats and foodpanda, take part in a protest calling for better protection of their rights in 2021. CNA file photo

Taipei, May 15 (CNA) The Ministry of Labor will hold a meeting with representatives of delivery industry unions and two major food delivery platforms in Taiwan on May 29, following an announcement that Uber Eats has agreed to acquire foodpanda's operations in the nation, the labor minister said Wednesday.

Hsu Ming-chun (許銘春) said the ministry will require the two food delivery platform operators to respond to union concerns regarding the future delivery fee structure once the acquisition is approved by the Fair Trade Commission (FTC).

She told reporters before attending a legislative hearing that upon learning about the potential acquisition on Tuesday, the ministry communicated with the FTC on safeguarding the rights of 140,000 delivery drivers in Taiwan.

She requested that the two platform operators respond to concerns regarding whether all their delivery drivers would be retained or transferred to the new platform.

The labor minister also demanded to know whether there would be changes in the delivery fee billing method so delivery drivers can work with peace of mind knowing they will retain all their rights.

Furthermore, the Ministry of Labor will work with the FTC in the review process, Hsu said, adding that delivery industry unions will be invited to participate in public hearings to express their views.

Hsu said that she will urge Uber Eats to fulfill its corporate social responsibility during the acquisition review process, including by being transparent about its fee structure and drivers' rights.

Details of the May 29 meeting will be provided to the FTC as a reference when they review the case, she added.

Responding to the case, the FTC said Tuesday that it has not yet received an acquisition application from the country's two major food delivery platforms.

However, given that the acquisition involves the coming together of the two food delivery giants, future reviews will focus on four key areas: Market concentration, pricing power post-acquisition, synergistic effects post-acquisition and market benefits, the commission said.

Competition not being restricted will be the top consideration when the review is conducted, the commission added.

Uber Technologies, Inc., the parent company of delivery platform Uber Eats, announced it had reached an agreement with Delivery Hero SE to acquire its foodpanda delivery service in Taiwan, according to a joint news statement released on Monday (Pacific Standard Time).

Although subject to regulatory approval by Taiwan's Fair Trade Commission, the acquisition is anticipated to close in the first half of 2025 and involve a US$950 million cash transaction, the statement said.

The statement added that the deal would give consumers greater food choices and pricing points by the businesses on each platform featuring on the Uber Eats platform.

Scholar's views   

Meanwhile, commenting on the high-profile case, Chen Jung-lung (陳榮隆), a former FTC member and professor in Fu Jen Catholic University's Department of Law, said the commission should first determine whether Uber Eats' acquisition of foodpanda will result in a monopoly and therefore not be authorized.

To ascertain the change in market concentration and impact, what exactly constitutes "the market" in this case has to be clarified, said Chen.

To those who rely on delivery services, the market for food delivery is clearly dominated almost exclusively by Uber Eats and foodpanda, he explained.

However, takeaway or buying at a store or restaurant are alternatives to purchasing commodities or food. This would represent a larger market in which the two platforms account for a smaller share, the scholar said.

Chen also said the FTC has to weigh the benefits and disadvantages of the acquisition.

Benefits include enhanced efficiency due to the combination of resources, resulting in better services or lower prices, points that Chen is certain the companies will argue to the commission.

On the other hand, if the acquisition increases Uber's market power, there is also the possibility of improper pricing without the existence of a competitor, Chen said.

"To vendors, (the acquisition) is certain to cause great pressure (on them)" because their price bargaining strength could be weakened, Chen said, while consumers will worry about possible price hikes.

Chen further said that the acquisition is not completely impossible, as the FTC could pass the merger with conditions attached to minimize market influence.

Chen also sees the case as an opportunity for the government to deal with Taiwan's current regulation deficiencies pertaining to food delivery markets, such as determining the competent authority, employment form and the labor rights of delivery drivers.

Uber Eats is a food delivery service launched by U.S.-based Uber Technologies Co. and foodpanda is a food delivery service owned by German-based Delivery Hero SE.

(By Lin Ching-yin, Pan Tzu-yu, Wu Kuan-hsien and Evelyn Yang)


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