October 14, 2020 at Bangkok Chada Hotel, Bangkok – Faculty of Law of Khon Kaen University by Ajarn Thaenrat Khunngern, Ajarn Narakorn Wannapong and Ajarn Busakorn Prap Na Sak, who are responsible for the Entrepreneurial Lawyer Program organized an academic forum on: “Food Delivery Business in the New Normal Era and the Roles of Government to Regulate and Facilitate Digital Socio-Economic Development”. The 3 national renowned academics running the forum were Dr. Prin Panichpak, Associate Chief of the Democrat Party and Head of the Economic Team; Assoc. Prof. Dr. Kanit Saengchot, a professor of Faculty of Commerce and Accoutanncy, Chulalongkorn University; and Assoc. Prof. Dr. Jet Tonavanik, a law academician. The three expressed their opinions towards food ordering online or application, the socalled food delivery business, regarding the directions, growth tendency, impacts and challenges, as well as the state’s role affecting the regulation and control of the business so that it will support digital socio-economic development. The great number of participants included officers from official organizations, applications service providers, restaurant entrepreneurs, the press and interesting public.
Ajarn Thaenrat Khunngern, a lecturer from the Faculty of Law, Khon Kaen University, presented a talk on, “Online Food Delivery in Thailand: Understanding of the Industrial Model, Impacts, and the Future”. In his talk, Ajarn Thaenrat mentioned that food delivery business is growing very fast during the past 1-2 years. A great number of restaurant entrepreneurs have started to use applications or platforms to reach consumers in order to increase their incomes, especially during the spread of Coronavirus Covid-19 owing to the necessity to compensate for the loss of sale from loss of customers. Kasikorn Thai Research Center reported that during the first half of this year, at least 20,000 small and medium restaurants applied for a food delivery platform per week during the lockdown period. Application service providers such as Lineman said within 10 days, over 15,000 more restaurants applied as members, while normally it took many months to reach this number. The food orders reported by Food Panda increased 20 folds compared to the same period the year before and continued to rise steeply during the unlocked period. Besides, this business has created jobs and incomes to hundreds of thousands of delivering riders.
The leaping growth of food delivery business has brought about a very important issue, i.e., a business running pattern that may result in injustice competition or trade barriers that will draw the state organizations to acquire roles in setting different guidelines that in turn promote free competitions, which are fair to all. For example, there are: an announcement of the Ministry of Finance stating the transportation for online business is under the control over services and goods, a draft announcement on “Guidelines for considering unfair trading between electronics food delivery business holders and restaurant entrepreneurs” by Office of Trade Competition Commission (OTCC).
“As a law academic, I expect to see fair competition that promotes free trading and economic growth, especially the digital economy, which is thought of as today’s high-potential channel for the circulation of money in the system. Meanwhile, the government should intervene and take the role in promoting business competitions that are fair to all as well as to build a balance of the 4 components behind food delivery business, i.e., application service providers, restaurants, drivers, and service users,” Ajarn Thaenrat said.
Dr. Prin Panichpak said that in the era in which technologies flood into our daily life and all dimensions of business operations, entrepreneurs need to adjust themselves in order to make the most of those innovations their advantages. The changes come with increasing opportunities and equality. They provide small entrepreneurs with efficient tools similar to what big entrepreneurs have. Dr. Prin also talked about law in the new era of economy, “In the newly emerging industry such as food delivery, a lot of changes will be happening both in terms of technologies and those involved. Therefore, if the controlling law comes too fast or sets rigid frames, these may obstruct development of innovations or limit competitive competence, possibly causing partiality. Law must therefore be streamlined and facilitates business competition that will in turn lead to overall growth of industry, digital economy and creative economy.”
Assoc. Prof. Dr. Kanit Saengchot explained that food delivery business is comparable to a tactic to create a selling channel for entrepreneurs and enables them to have more alternatives during the present economic situation. Many entrepreneurs see that food delivery business increases their burden in terms of higher costs. In another perspective, it is like they spend money to buy customers who can see them and order from them. This is not different from paying rent for a shop or a foot court space; the difference is only renting a virtual space. With the former rental burden, this adds to their costs. However, if we utilize the benefits from the platform as the principle of the business, for example, Cloud Kitchen, which is today very popular, it could help lessening the rent. The government should look at the competition from this perspective too.
“In the view of restaurant entrepreneurs who need to use the food delivery service, when this new cost emerges such as the income share or ads fees, the total business costs must be considered before setting the food price that cover these costs. We must not forget that selling food to eat in the shop or to go home and food delivery yield different benefits to customers. Therefore, we may have to consider if a platform suits every entrepreneur or not. For example, if our restaurant already makes good sell, then it is not necessary to rent a space at the mall. For the entrepreneurs who do not need to find more customers but want to deliver food, then there will be more alternatives for them as well,” Assoc. Prof. Dr. Kanit added.
Assoc. Prof. Dr. Jet Tonavanik expressed his opinion towards the role of the government in regulating food delivery business. According to the professor, all changes bring impacts which can be negative and positive. The government must intervene and prevent partiality, but in doing so, must not disrupt the business operation and the customers’ benefits. “The convention in some business such as rafts can have such thing as exclusive dealings. This is not right or wrong, but we have to look at the outcomes, to see if they cause injustice to entrepreneurs of food shops or users of other applications or not. The law should not be confined but should open wide, for in practice there are various details of operation of each business.”
Following this, Dr. Prin Panichpak made a conclusion, “Food delivery business is just a dimension open to facilitate people’s daily life. The future of digital economy still has a lot of potentials from utilizing bid data and in-depth analyses that will lead to creation of goods and services that are cheaper, faster, and safer. This also means monetary sources that are fair to all will be more available. There are chances for Thai people to learn more about technologies and investment money from abroad. Therefore, we should learn to adjust ourselves as being applications providers, entrepreneurs and law issuers.”
[ Thai ]