Manna Plus fails to pay $6.2 mn in delivery rider, distributor fees

[Courtesy of Manna Corporation Ltd.]

Manna Corporation Ltd., the operator of food delivery service app Manna Plus, is currently embroiled in controversy for failing to pay delivery fees to its riders.

According to industry sources on Monday, Manna owes about 8.5 billion won ($6.2 million) in delivery fees to distributors and riders nationwide.

Manna Plus operates on a prepaid deposit system where affiliated stores deposit funds in advance, which are then distributed to riders and distributors after deliveries are completed.

For instance, if 4,000 won is deducted per delivery, 3,600 won is paid to the rider and 400 won to the distributor.

This system allows riders and distributors to accumulate earnings in a deposit format and receive lump-sum payments at regular intervals. Affiliated stores can also withdraw their prepaid funds as needed.

The structure of affiliated store-Manna Plus-rider/distributor relies on Manna Plus managing cash settlements on both ends.

However, since June, Manna Plus has increasingly restricted withdrawals. Initially limiting withdrawals to 1 million won per day, the company later reduced the limit to 100,000 won per day.

At that time, the company explained that the issue arose because many riders attempted to withdraw funds simultaneously during settlement periods with contractors.

On July 13, the company further escalated the situation by freezing all non-withdrawn amounts under the label protected deposits.

This freeze has left riders without access to their earnings and forced regional distributors, who need to continue operations, to use their own funds to pay the riders.

Manna Plus had initially promised that normal withdrawals would resume between August 1 and 10. However, as of Tuesday, most regions, with few exceptions, have not seen any improvement. The company said it is striving to ensure withdrawals are possible by August 10 and aims to normalize the situation by the end of August.

The Riders Union has criticized Manna Plus, highlighting that the company employs around 33,000 riders and holds a 20 percent share of the delivery service market.

The union demanded that the company complete all pending payments by August 10 and provide measures to prevent future occurrences.

Additionally, the unionized riders urged the Ministry of Land, Infrastructure, and Transport to introduce regulatory measures such as a mandatory registration system for delivery agencies to ensure accountability and prevent similar issues in the future.

Concerns still mount, with some comparing the situation to the previous crisis faced by e-commerce platforms TMON and WeMakePrice.