Taiwan unveils draft formula for food delivery pricing

台灣公佈外送運費定價方案草案

TAIPEI (Taiwan News) — The Ministry of Transportation and Communications on Monday released a draft formula for calculating food delivery rates, setting an upper limit on pricing that may allow additional charges such as waiting fees and walk-up surcharges when necessary.

The ministry said the pricing being set is a “ceiling price,” the maximum operators may charge, per CNA. Companies may still offer discounts, promotions, or free delivery, and the guidelines are expected to be approved as early as February next year.

The ministry first proposed amendments last year to establish pricing rules for delivery services, but the move sparked backlash, particularly because the public consultation period was considered too rushed. The new draft, revised after further review, has now been re-announced.

Under the proposal, freight companies using scooters to provide delivery services for platforms must calculate their base rate using the formula: base rate per kilometer per order = reasonable cost per vehicle-kilometer × (1 + reasonable operating profit rate) ÷ average number of orders per vehicle-kilometer.

According to the draft, each delivery fee includes a starting rate and a continuing rate, calculated based on the base kilometer rate and delivery distance. When necessary, additional charges such as waiting fees, walk-up fees, nighttime surcharges, or Lunar New Year surcharges may be added to the delivery fee.

Items classified under reasonable cost per vehicle-kilometer include fuel, auxiliary fuel, tires, vehicle depreciation, repair materials, driver wages, driving-related expenses, mechanic wages, repair-related expenses, sales staff wages, business activity expenses, equipment depreciation, management staff wages, administrative expenses, financial expenses, and taxes. Trade associations and labor unions may select appropriate items according to their operational needs to calculate scooter freight base rates.

The ministry said that once the amendments are passed, delivery pricing will follow this formula. The Highway Bureau will also launch “five-party negotiations” involving consumers, platform operators, delivery-worker unions, consumer groups, and representatives of central and local governments.

Past freight pricing calculations were based on the “ton-kilometer” method, which does not match the needs of scooter delivery. After discussions last year drew significant feedback, the ministry held fresh consultations with delivery-worker groups, consumer organizations, and others, reaching a consensus before reissuing the draft.

As for the actual base rate, the current announcement concerns only the formula itself. The exact pricing has not been set.

The ministry said estimates circulating online, such as NT$60 (US$1.93) per order, are merely trial calculations. Once the formula is finalized, five-party negotiations will begin to set base rates for northern, central, southern, and eastern Taiwan.