Meituan responded to TechNode’s Monday story about delivery fleet strikes, saying that the reduction in pay was a normal cyclical event for part-time staff that enjoy incentivizing seasonal subsidies during peak periods. The pay reduction was not connected to the company’s financials and Meituan’s delivery service is operating normally after the company communicated the wage fluctuation to the striking workers, said a company spokesman on Tuesday.
However, when TechNode contacted the company Monday for comment, the company spokesman stated that he was not aware of any labor strikes.
The company’s financial pressures, however, are unambiguous after recording a net loss of RMB 4.2 billion ($626 million) during the first half of 2018. Margin pressures are a common thread across delivery platforms that have used cash-burning discounts and coupons in the ongoing market share battle, resulting in increased commission rates as recently as mid-January.
Meituan’s monetization rate for its food delivery business remained about flat at 13% in the first half of 2018 vs. 13.4% for the same period a year earlier, according to company financial statements. Monetization rates are commission the platform charges sellers for each transaction.
The company declined to comment on its monetization strategy, citing the quiet period before earnings season.
Delivery workers for rival Ele.me’s courier network, Fengniao Delivery, also protested lower wages in Shenzhen on Friday. In a public letter addressing the delivery team dated the same day, the company asked for employees to remain rational about the adjustment.