Line Man defends lower rider pay
Company says rate above that of rivals
Line Man Wongnai, the operator of food delivery service Line Man, has defended its recent move to reduce delivery service payments for rider partners from 62 baht over a distance of the first 3 kilometres to 50 baht, saying the new rate remains higher than those offered by rivals in the industry.
The new rate, which came into effect on March 22, has sparked outcry among the riders. It affects food delivery riders in Bangkok and surrounding provinces.
Also, the riders are still subject to a 15% management fee deduction by the firm. This means for 50 baht in delivery service, the riders will get 42.5 baht.
On March 26, hundreds of riders rallied outside T-One Building in Klong Toey district where Line Man Wongnai is located, demanding the company return to the previous payment rate.
"We believe this new rate is still the best offer in the market," Yod Chinsupakul, chief executive of Line Man Wongnai, told the Bangkok Post.
The company is scheduled to meet representatives from the riders today to formally respond to their demand.
He said the company continues to manage and empower riders, merchants and users throughout the ecosystem with understanding and respect.
According to mobile data and analytics platform App Annie, Line Man is ranked third in terms of monthly active users in food delivery apps in December trailing Grab in pole position and Foodpanda.
Line Man Wongnai was created through the merger of restaurant review platform Wongnai and on-demand and delivery app Line Man in September last year.
Before the merger, Line Man partnered with instant delivery and courier service provider Lalamove to use the latter's fleet of riders. Line Man now has its own fleet of riders.
"Over the past six months since the merger, we have established our own fleet with 50,000 riders," said Mr Yod. The service reached 36 provinces by the end of last year.
"We are now ready to broaden our penetration in the market."
The pandemic has accelerated online food delivery as a new permanent lifestyle feature for many people. In 2020, food delivery orders surged about fivefold.
"Even though people return to work at their offices, the number of orders remains the same," he said. However, spending per order has dropped from the levels seen during the lockdown period when orders were made for all family members stuck at home.
Some 10 million people in Thailand are active users of food delivery services. Online food delivery is expected to make up 10% of the food market this year, up from 5% a year earlier, according to Mr Yod. Once it reaches 20% of the market share, it will become a mainstream of the food market.
The company has 500,000 restaurants from the Wongnai database and 300,000 of them on board Line Man's system.
"We believe we are on a path towards profitability," said Mr Yod. "The company is also looking into raising funds, whether through venture capital or an initial public offering."
According to Mr Yod, the company has the potential to become the first unicorn in Thailand by this year, buoyed by the prevailing trend of food delivery service driven by the pandemic. It earlier expected unicorn status in 2023.
A unicorn is a startup company valued at more than US$1 billion.
The company currently has 4.3 million active users with 16 million downloads of the app.