Meituan delivery workers in Shanwei, a city in southern China’s Guangdong province, have entered a sixth day of strikes in protest at Meituan’s diminishing benefits and rewards, according to various Chinese media reports and Shanwei delivery workers’ posts on Chinese social media. 

To ensure regular services, Meituan has brought in workers from neighboring cities to Shanwei. The transferred drivers were offered a reward of RMB 10 ($1.45) per order with RMB 200 per day guaranteed, which is more than two times the pay of local drivers, according to screenshots shared on short video platform Douyin. 

A Douyin user called Tukushuhai commented in a video post on Tuesday that some riders from outside the city were unfamiliar with Shanwei’s road conditions, which resulted in delivery time overruns and user complaints.

Why it matters: Meituan’s problems with its workers comes at a time when other Chinese tech majors such as ByteDance and Alibaba are accelerating their moves into the life services sector. ByteDance began testing delivery services via TikTok sibling app Douyin in selected cities in the first quarter of this year. 

Details: A Meituan delivery worker in Shanwei who participated in the strike and preferred to remain anonymous told TechNode that the company had deleted “hundreds” of strikers’ work accounts, preventing them from logging into Meituan’s worker-specific app and therefore cutting off their income during the strike.

  • According to a benefit document shared with TechNode by the Meituan worker, the delivery service used to offer a local worker subsidy for long-distance orders. For example, RMB 7 would be added onto a payment for any order between 3.6 kilometers and 4.5 kilometers (2.8 miles) away; a payment of up to RMB 13 was made for orders over  6.6 km away. The source said that Meituan had recently adjusted its benefits for local workers, so that only RMB 3.7 extra would be offered for trips of more than 5.0 kilometers, a third of the previous sum. 
  • Moreover, workers can now be fined RMB 50 if they choose not to work on rainy days, with the fine “repeated every time the system monitors their offline status,” the source said.
  • Shanwei saw heavy rainfall last week. The official Shanwei weather channel issued a precautionary notice asking residents to prepare for heavy rainfall from April 18 to April 21.

Context: According to Meituan’s earnings report, the company’s core local commerce unit (which includes food delivery, hotel and travel bookings, and in-store purchases) generated RMB 70.6 billion in delivery service income in 2022, while delivery-related costs reached RMB 80.19 billion, suggesting that the revenue generated from the delivery service was insufficient to cover delivery workers’ costs.

  • Revenue from Meituan’s core local commerce sector consists of delivery services, commission, and online marketing, and is the main source of revenue for the company.
  • Meituan has been subsidizing delivery workers’ wages with the money it earns from the service fees the platform charges merchants. In 2019, 80% of such income was used to pay rider salaries, according to an announcement made by the company in early 2020.
  • Meituan lowered its rates for merchants in May 2022, following Chinese regulators’  request that delivery platforms reduce their service fees to help catering firms lower their operating costs during the pandemic. The Beijing-based firm said at the time that it was aiming for full transparency nationwide when charging commissions by the end of 2022.

Cheyenne Dong is a tech reporter now based in Shanghai. She covers e-commerce and retail, AI, and blockchain. Connect with her via e-mail: cheyenne.dong[a]