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THE INVESTOR
August 03, 2021

Coupang faces biggest backlash yet as criticism mounts over working conditions

  • PUBLISHED :June 22, 2021 - 16:03
  • UPDATED :June 22, 2021 - 16:12
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Protestors stagted a protest outside Coupang's headquarters in Seoul on Tuesday over the review system on the company's food delivery app Coupang Eats and its failure to provide protection to restaurant owners. (Yonhap)

In March, Coupang made history as the first South Korean startup to make its debut on the New York Stock Exchange in the US, becoming a subject of both awe and envy among entrepreneurs here.

But a few months later, it now faces growing criticism, with many suggesting the company achieved stellar growth by sacrificing the safety and well-being of its workers. A series of deaths among its workers and a fire at one of its distribution centers last week seem to have reinforced that view.

Outside the company’s headquarters in Seoul on Tuesday, a group of people staged a protest over the death of the owner of a restaurant listed on its food delivery app, Coupang Eats. She suffered a stroke and later died last month after dealing with a Coupang Eats customer, who is accused of harassing her for a refund over a single fried shrimp.

“Terrorizing with star ratings and false reviews, yet nothing is being done to toxic customers,” read one picket sign.

The backlash is the latest in a series of controversies surrounding the company in connection with worker safety and working conditions, as well as its treatment of partners such as vendors, suppliers and restaurant owners in its push to outperform rivals by offering better services at better prices.

Last week, a fire broke out at its distribution center, lasting days and leaving one firefighter dead. Though the investigation into the cause is still ongoing, reports of faulty sprinklers and fire shutters added to the criticism.

Protesters from civic groups argue the latest case highlights how much stress restaurant owners are under from demanding customers on Coupang Eats, Coupang’s food delivery service.

The company has failed to provide protection for small-business owners, the protesters said.

“False and vicious reviews can hurt sales on a major scale and we need a system that guarantees protection to restaurant owners.

“It is the least delivery service operators could do to coexist with both customers and restaurant owners,” People’s Solidarity for Participatory Democracy said in a statement.

Coupang issued an apology on the same day and said it would create a team dedicated to helping restaurant owners.

But the backlash against the e-commerce giant shows no sign of stopping soon.

In a recording obtained by MBC, Coupang employee told staff at the restaurant to prevent a similar incident from happening again despite the staff saying the owner was left unconscious after receiving multiple calls from the company.

The exchange has now gone viral, adding fuel to the fire against the company which now faces a boycott.

“Is it Coupang again? If you are not going to protect restaurants and avoid taking responsibility, why do we keep using Coupang Eats?” one viral tweet read.

Justice Party leader Sim Sang-jung also launched a scathing attack on the company.

“There had been over 170,000 tweets with the hashtag #CoupangExit as of two days ago. In Kim Bom-seok’s innovation, there are no humans. He achieved those quantitative achievements at the cost of human lives,” she said.”

Her remark comes after founder Kim resigned from all positions at Coupang Korea last month.

The timing of the announcement of Kim’s decision to step down, which came at the height of criticism over a fire at its distribution center, was seen as an attempt to avoid taking responsibility by critics.

The company, however, said Kim resigned weeks before the fire.

In March, a delivery worker working for Coupang on a night shift was found dead. While union members said the death was caused by overwork, Coupang said the staff in question worked fewer working hours than an industry average.

During the same month, another employee in charge of managing delivery workers also died.

By Yim Hyun-su (hyunsu@heraldcorp.com)

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