Baidu Waimai, a takeaway service previously owned by Baidu and now under Alibaba’s Ele.me, is facing protests from its commercial agents. More than 50 agents employed by the company gathered in front of its headquarters on July 16th to voice their grievances and ask for a meeting with Baidu-founder Robin Li, local media is reporting.
The protest is just one in a series organized by Baidu Waimai agents and delivery staff. Baidu Waimai itself wrote a letter to Baidu in November accusing the company of making them lose thousands if not millions of RMB when promised subsidies for food delivery never came through as well as misleading them about future prospects of the service. Baidu Waimai stated in the letter that 90% of its contractors suffered serious losses.
Baidu Waimai has been strained by internal restructuring since the merger with its previous rival Ele.me in August last year. In the meantime, Ele.me was taken over by Alibaba which bought the remaining shares in the company in April this year.
At the beginning of this year, Baidu Waimai announced that the number of urban channel managers will be cut, retaining about 35 of them in total. At the same time, the market share of Baidu Waimai has been slipping affecting incomes of the distribution staff, according to a report by Lieyun Wang.
Rumors have also been circulating since May that the company is facing layoffs. Baidu Waimai also saw a large number of its executives leave since the takeover. Aside from its former chairman Gong Zhenbing who moved to ride-hailing company Yidao Yongche, CTO Geng Yankun left to join SF delivery service (顺丰), and COO Chen Qing joined Yum China. Some of the other high ranked staffers joined Didi’s new food delivery platform Didi Foodie, others Daojia Meishi.
Protesters published a letter including 10 questions to Robin Li. The letter accuses Ele.me of trying to destroy the company and Baidu of taking the money and refusing to recognize the role that over 400 commercial agents played in building Baidu Waimai. The first question of the letter states:
You said that since the creation of Baidu Waimai in 2014, more than 400 commercial agents enrolled in it across the country. Do you know the money, time, youth, and effort they spent on the local takeout industry? Do you admit it? Do you recognize the fact that young entrepreneurs all over China are selling their houses, selling cars, borrowing money and taking out loans to devote themselves to the Baidu takeaway business? Pressured by the KPIs demanded by our headquarters, we invested nearly RMB 1 billion of our hard-earned money. Do you admit it?
More than 95% of Baidu Waimai’s operations are contracted out to exclusive agents within cities, while Baidu runs a few of its own operators outside of the cities. The agents are responsible for handling city logistics and covering staff wages, welfare, clothing and equipment, and even traffic accident risks. Some agents pay up to 20% commission to use the Baidu Waimai platform.