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Around half of all China’s netizens or an estimated 421 million people ordered takeout delivery on their smartphones last year, bringing in revenues of RMB 240 billion ($34 billion). The market is dominated by two major players—Meituan Dianping and Alibaba’s food delivery subsidiary, Ele.me.
Propping up this industry is an army of food delivery drivers, who work long hours rushing around China’s megacities to keep up with customer orders. Meituan said (in Chinese) that in 2018 it employed 2.7 million drivers.
TechNode recently shadowed 26-year-old Ding Liang, who has been a driver for four years, on his daily routine. Most drivers work around 10 hours a day while others work 15 hour-shifts every day, he said. All of them have to compete fiercely to get orders, especially during the lunchtime rush.
Drivers get anywhere between RMB 5 ($0.71) to RMB 7 ($1) for each order, depending on the time of day, distance, and other factors. He works as a crowdsourced or “zhongbao” (literally, crowd outsourcing in Chinese) delivery worker so he has a more flexible schedule and type of orders he receives varies greatly.
Ding takes 30 to 40 orders a day, earning him an average of between RMB 11,000 and RMB 13,000 per month—a decent income compared with the average salary of food delivery workers in China, around RMB 7,750 per month in 2018 (in Chinese). But other contract food delivery workers, those who have a fixed contract with a company, earn RMB 7,000 to RMB 8,000 a month for the same amount of orders.
Falling wages
However, as the two major platforms fight to consolidate their market position, drivers are seeing their wages fall. “The pay is now too low. I can’t stand it anymore,” said Liu, a full-time Ele.me driver, who requested his given name not be used for fear of possible repercussions.
As wages are getting lower, drivers struggle to deliver more orders within the 30-minute window the apps allow them. They have to drive faster and faster to make ends meet within a limited time frame, often breaking traffic rules and working in extreme weather conditions, which can lead to accidents.
“If everyone abides by the law and also tries to deliver orders as specified by the platforms, it means that they can only complete 8 to 15 orders a day,” which is not enough for them to make a living, said Aidan Chau, a researcher at China Labour Bulletin, an NGO based in Hong Kong that monitors working conditions in China.
Shanghai police reported a spike in road accidents for the first half of 2019, and food delivery workers were involved in more than 80% of them. In August, one driver died (in Chinese) in Shanghai when he was electrocuted by his own scooter during the typhoon.
Ding said he doesn’t take a day off even in bad weather conditions. “I work every day, even in snow, and heavy rain,” he said.
But the drivers are often not entitled to work injury compensation.
There are two kinds of drivers, formal and informal. The formal ones are contractually bound to their jobs, either directly to the app provider or to an agency that is in turn contracted by the app. Their contracts typically don’t provide social security or work insurance.
The informal ones are those who adhere to the most common conception of the gig economy—they simply sign up to the app and select orders at will. Being free agents, they are not entitled to any compensation for accidents.
In terms of regulation, “the first step is to help all these platform workers become formal workers,” said Chau.
With contributions from Eliza Gkritsi and Nicole Jao.