Food delivery: Drivers take the risks. Platforms reap the rewards.

7 min read

With additional reporting from Nicole Jao and Coco Gao

Food delivery drivers whizzing around on scooters have become commonplace in the streets and alleys of China’s sprawling cities.

Around half of the country’s internet users, typically located in urban areas, ordered takeout online in the first half of 2019 (in Chinese). As user growth slows, the two main players are focusing on profitability and order growth, while the drivers receive the short end of the stick.

The market is effectively a duopoly—Chinese tech giant Meituan Dianping and Alibaba’s food delivery arm Ele.me have outdone smaller players, and boast a combined six million registered couriers.

Ele.me told TechNode in an email that they have 3 million registered drivers, while Meituan said it employed 2.7 million drivers in a 2018 report.

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A job ad on Meituan’s app, luring drivers with the possibility of making RMB 13,000 a month. (Image credit: TechNode/Coco Gao)

Meituan advertises the positions using images of happy, proud drivers and slogans emphasizing the potential for high pay. But the ads omit some crucial details to the job—insurance 

In reality, fierce market competition and a lack of labor regulation have birthed algorithms that rule over drivers’ livelihoods and working conditions.

The overwhelming majority of food delivery drivers work under one of two labor regimes. Zhongbao, crowdsourced, delivery workers simply sign up to the platform and pick orders at will. With no contractual obligation to the company, they enjoy a more flexible schedule but receive no work injury insurance or social security. 

The platforms also contract companies around China to act as labor-management intermediaries, which formally employ drivers. These workers adhere to fixed contracts with a single delivery service, and get regular working hours and orders via contractors. 

“Even though they have a labor contract, many of them don’t have social security,” and often face “unpaid wages,” said Aiden Chau, a researcher at Hong Kong-based NGO China Labour Bulletin (CLB). The organization uses media reports and social media posts to maps strikes across different industries and locations in China.  

Low wages, falling further

The most common reasons for strikes are unpaid or diminishing wages, according to CLB’s strike map. The NGO gathers data on strikes and accidents from Chinese social media and local press reports. Many of the posts TechNode reviewed in October have since disappeared from Weibo.

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Meituan drivers in Nanjing explain to the police that they’re protesting over falling wages, on June 5, 2019. (Image credit: Weibo/红尘迷失了我的你)

Drivers have little to no legal right to demand higher compensation. After Chinese New Year in 2019, drivers noticed that their wages had fallen, said Chau. 

With lower pay per order, zhongbao drivers have to work longer hours to make ends meet. A driver who requested only to be identified as Liu told TechNode, “The pay is now too low. I can’t stand it anymore.” 

As a free agent, Beijing-based driver Ding works a 12-hour shift every day from 7.00 a.m. to as late as 11.00 p.m. Like many diligent delivery workers in China, Ding works weekends and holidays but considers his workload to be in the mid-range. “There are drivers who work from 5.00 a.m. to 11.00 a.m.,” he said. 

A Chinese University of Hong Kong survey of 45 drivers in 2018 found they worked 12.4 hours on average. 

Drivers have also noted that contractors are sometimes late or miss paying salaries. On Sept. 12, some 24 Ele.me couriers in northern Hebei province protested after they didn’t receive pay between May and August. 

Ding completes 30 to 40 orders per day, earning RMB 11,000 to 13,000 per month, decent by the industry standard. Food couriers earn RMB 7,000 to 8,000 on average per month, TechNode found in an informal street survey. 

Unlike other countries, these gig economy workers make the same or more than their white-collar counterparts, Michael Norris, research and strategy lead at AgencyChina, a Shanghai-based marketing and e-commerce consultancy, told TechNode. In 2017, the average salary in Shanghai and Beijing was around RMB 8,000, according to official data.

But drivers spend much of that money on remittances to support their families back home. The six million-strong food delivery workforce mostly comprises migrant employees from agricultural areas, born in the ‘80s or ‘90s. For many, a job in food delivery is far more attractive than hard labor in the fields and factories. 

Ele.me has started an initiative to provide “strict and regular assessments of our logistics vendors to protect couriers’ rights and a service hotline (10105757) through which couriers can share their feedback to help us better supervise the vendors,” a company spokesperson told TechNode. 

Drivers such as Ding work across multiple platforms, including Meituan, Ele.me, and parcel courier SF Express. But Meituan is trying to change that by locking workers in. The company has started a “loyalty program,” said CLB’s Chau. “If you do not join this loyalty program, your orders will be fluctuating or decreasing,” he continued. 

Meituan Dianping declined TechNode’s request to comment on this article. 

Speed over safety

The two leading platforms often promise deliveries within 30 minutes and pay couriers more for hitting this target. Fulfilling orders late can incur a penalty for drivers and they may receive fewer orders over time. 

Drivers have complained that the algorithm for calculating distances has changed, giving them impossibly short windows to make deliveries, Chau said. Ele.me’s use of as-the-crow-flies distancing to work out times spurred zhongbao workers to strike on July 9, a Weibo user said.

Short on time, drivers often break traffic rules. They ride the sidewalks, drive the wrong direction down streets, and run red lights. 

Tough deadlines and lower wages push China’s delivery drivers to take risks

“You know how the way delivery men ride their scooters like they had no care for their lives,” an Ele.me driver said. “It’s not like we don’t care about our own safety. We have to make a living, so we have to rush to get the meal delivered.”

Shanghai police reported a spike in road accidents in the first half of 2019, and food delivery workers were involved in more than 80% of them.

Ding doesn’t take days off, even in adverse weather conditions. “We have to work and earn a living. I work every day, even in snow and in heavy rain,” he said. 

During an August typhoon, a Shanghai driver died of electrocution (in Chinese) when driving through rainwater. Ele.me drivers said the platform threatened them with penalties if they didn’t work during the extreme weather event for an additional RMB 0.80 per order. 

Ding has been involved in just one car accident during his four years as a courier. He collided with an inattentive driver’s car door. Ding ended up in the hospital though he said it was minor. Fortunately, the driver at fault covered the damage and medical bills for Ding.

Not all drivers are so lucky. Because of the lack of formal contracts, they are “seen as providing services to the company, so when they have an accident, it is not seen as a work injury,” Chau said. Their injuries are not covered by work insurance, and they have to pay for treatment themselves, he added.

Ele.me has set up an initiative to provide insurance to all registered drivers, a spokesperson told TechNode. The plan “covers the main risks the couriers may face in their daily work, along with low-interest loans and other benefits,” he said.

Striking back

Drivers are fighting back with industrial action and protests. Their chief complaints, according to Weibo posts, are wage cuts, unpaid wages, and changes in the algorithms that administrate their work (all in Chinese).

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Meituan drivers protest wage cuts in Hangzhou on April 24, 2019. (Image credit: Weibo/我是谁维沃)

The number of such strikes hit 56 in 2018, up from 10 in 2016 and 2017 combined, states CLB data. So far this year, CLB has reported 45 strikes across the country, and food delivery drivers made up 12% of all industrial action during July.

The strikes usually involve less than 100 food delivery drivers, though some involve larger numbers.

“Maybe not all protests are effective, but they definitely learn something, how to organize, how to deal with the government,” said CLB’s Chau. Often, drivers protest by staking out local company offices, waiting for management to hear them out.

“In the past, the customer service will tell them that it’s just the computer calculations,” Chau said. “When they talk to management, management will say that this is the policy of the company. They will know that it is not some neutral maths, but a decision made by management affecting their lives,” he continued.

Drivers sometimes go to great lengths to convince peers to participate. Chau said there had been cases of strikers slashing others’ tires to prevent them from working.

The workforce is also joining forces in more agreeable ways. Drivers set up a network in Shanghai’s Putuo district in February 2017 to connect five delivery driver trade unions from across the country. Local media reported at the time that there were 400 unionists nationally—a fraction of the total labor force. 

In China, only the National Federation of Trade Unions is recognized as legal. All trade unions are required to be affiliated with the national-level body. 

The union aims to protect workers’ rights and provide tangible services. “When we encounter grievances, face difficulties, and seek help, the trade union is our strong supporter,” said Yi Wu, a unionist driver, in January 2018. The Putuo union organizes welfare activities, including traffic education seminars, according to local media reports. 

“Because drivers are employed as independent contractors, they think it is very difficult to change the algorithm,” Chau said. 

But unionizing has done little in the way of protecting labor rights against China’s food delivery giants. They are just “paper unions,” Chau said, meaning that they haven’t achieved any reparations or policy changes for the drivers’ grievances.