Food courier crisis in Hungary: Labour shortage and opportunities for foreigners with KATA tax revisions

KATA tax reforms have reshaped Budapest’s food delivery landscape, cutting courier earnings and pushing many to leave or work long, gruelling hours. With couriers stretched thin and new workers entering on reduced pay, service quality has come under scrutiny, raising concerns about consumer protection.

Protecting consumers

G7 reports that the Ministry of National Economy has initiated an intensive consumer protection audit of the food delivery sector following a surge in customer complaints. The investigation will examine issues such as food quality upon delivery, delays, service charge structures, and compensation options for affected consumers. This scrutiny is significant as it may reveal the impact of recent policy changes, like the reformed small business flat tax (or KATA tax) and the rise in guest workers, on the sector. Additionally, it highlights the challenges of defining and enforcing consumer protection standards for platform providers like Foodora and Wolt.

What influences the quality?

Food delivery quality is influenced by three separate players: the restaurant, the courier, and the platform company connecting the two. Each operates independently, meaning that restaurants may occasionally miss delivery deadlines due to sector-wide labour shortages, though they rarely send orders cold. Couriers, motivated by earnings, generally work quickly but can face challenges en route that impact quality, such as spills or wet bags. The platform company, meanwhile, provides the technology that manages the customer-restaurant-courier relationship through algorithms, though this becomes harder as demand rises.

A significant factor in the sector is the lack of a formal employer-employee relationship between couriers and platform companies, which complicates scheduling to meet fluctuating demand. Recent KATA tax changes and persistent courier shortages in Budapest have further impacted the market, limiting the ability to adapt working hours to high-demand periods. As a result, delays are more likely in bad weather, when demand surges and courier availability drops, while favourable weather can reduce couriers’ hourly earnings due to fewer orders.

KATA tax changes bear negative effects

The 2022 amendment to the KATA tax rules has significantly lowered the potential income for food delivery couriers, prompting many to leave the sector or work extended hours without limits as independent contractors. New couriers, often guest workers or individuals supplementing primary jobs, face this reduced income level, which may lead to fatigue, mistakes, and lower service quality. Unlike cities like Vienna, where couriers can be full-time or part-time employees with consumer protection benefits, Budapest’s platform-based model limits organisation and accountability, as platform companies coordinate legally independent contractors. The ongoing government inspection may ultimately target platform companies, yet regulatory challenges remain, as these digitalised models operate with minimal consumer protection across sectors globally.

Read also:

• Surprisingly, Hungarians are not only going to the West to work
• Will employment of guest workers in Hungary face further restrictions soon?

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