DANIEL CHEN investigates the impact of the COVID-19 pandemic on food delivery workers, bringing attention to the pressing need for reform and regulation of China’s gig economy.
On March 21st, 2020, a Chinese delivery man named Mr. Gao was put on the front page of TIME magazine under a heading describing delivery workers in heroic terms. When the whole country stopped amid the coronavirus pandemic, more than 7 million food delivery workers helped to distribute medicine, daily supplies, and meals becoming the crucial link between individual households and society. In light of the positive media attention and the heightened importance of food delivery workers, I wonder if their lives have actually been improved during COVID-19. However, my conversations with eleven delivery people working in Beijing during the pandemic suggest that despite acknowledgment in the press, many delivery people continue to struggle with exploitation and the punitive rating system associated with the web platforms used by delivery companies.
The Chinese food delivery industry first started when university students began ordering online, which were often more delectable, more convenient, and cheaper than cafeteria food. Growth in online deliveries fueled a need for delivery workers in urban areas, which created the need for the first delivery companies (Liu et al., 2018). Since 2009, with the rapid development of the internet and e-commerce in China, the industry has grown rapidly. It has grown by 142.2 billion yuan ($20B USD) between 2018 and 2019, an increase of 30%(Meituan Research, 2020). With this rapid growth, meal deliveries have become an integral part of people’s lives: in 2019, consumers of the food delivery industry reached 460 million. With the Chinese public’s ever-growing appetite for convenient and affordable delivery meals, two main players, the ordering-and-delivery platforms Ele.me (饿了么) and Meituan (美团), began competing for faster delivery, cheaper prices, and better service (Liu et al., 2018). In order to ensure that there are enough delivery workers at all times to provide quality service, both companies have developed staffing schemes that offer both full- and part-time delivery jobs.
There are two types of delivery people in China: part-time (ZhongBao 众包) and full-time (ZhuanSong 专送). Part-timers are typical gig workers who have the freedom to choose their work schedules. Their compensation depends on the distance and size of the orders. By contrast, full-timers have mandatory morning meetings and compulsory attendance, which requires them to follow a working schedule and deliver a certain number of orders every day and receive the same fee per order, which ranges from 8-9 yuan ($1.14 USD). They are usually required to stay online for eight hours per day. Both types of riders do not receive a base salary, so their income depends solely on the number of orders they deliver.
Heroism and Recognition
During the pandemic, delivery people were critical to supplying households with their daily necessities. They zipped through cities supplying hospitals and families. Even though platforms do not force delivery people to deliver to hospitals, many riders volunteered to deliver hot meals to the healthcare workers (Wang, 2020). Some of them didn’t disclose their locations or discuss this potentially dangerous work with their families, who certainly worried about their safety (Wang, 2020). Their fear is not unfounded: one delivery person was diagnosed with COVID-19 in Shenzhen (DianShangBao, 2020). In order to reduce personal contact between customers and riders, platforms established the “zero contact” policy: delivery people were required to leave the orders at the reception counter of each apartment building. Many riders found this policy made their work easier. When workers brought deliveries to households, more customers treated them with respect than previously. Mr. Wang told me that after the pandemic, he found that more customers would give him water, though this still happens very rarely. He said, “I am very thankful that they understand our hardships.”
Because of their bravery and contribution to the country’s welfare, China’s Ministry of Human Resources and Social Security added food delivery riders to its official national occupation list on February 25th, 2020. In an article dated March 16th, 2020, Charlie Campbell notes: “It’s the first revision to the list since 2015 and should mean better training, working conditions, job opportunities and career development for riders in the future” (TIME, 2020). The government invited a Meituan delivery person to the press conference held by the State Council Information Office (CCTV, 2020). Many would assume that the positive media attention and new policy would improve the lives of the delivery people, but the reality suggests otherwise.
Challenges: Competition, Ratings, and Companies Policies
When China was in lockdown, the pandemic negatively impacted delivery workers in terms of salary. All nine riders who had worked before the pandemic said they earned less during COVID and attributed this to two main factors: a decrease in the number of orders overall and increased competition among delivery workers. Predictably, fewer white-collar employees were ordering delivery during the workday. Compounding this was the increased competition: more people became delivery workers because they were laid off during the pandemic, an influx of labor that decreased the average number of orders for each delivery man.
Despite being publicly labeled “heroes” during the pandemic, the workers I spoke with told me that nothing had really changed for them after China’s recovery from the pandemic. All interviewees said being added to the official occupation list made no changes in their lives: they still lack labor benefits. In China, many full-time delivery workers, unlike other full-time employees, do not have any labor benefits, such as Social Insurance (SheBao, 社保), which provides medical insurance, maternity insurance, employment injury insurance, and endowment insurance. Despite being denied benefits, every full-time rider had to sign a contract with a third party labor supply company before working. I consulted Ding Xiang, a Chinese lawyer who practiced labor law, to find out if they are entitled to Chinese labor benefits. She explained that this is a case of a labor dispatch, which occurs when full-time delivery men sign a contract with the labor supply company to establish a working relationship. The labor supply company then dispatches the delivery men to Meituan or Ele.me. In this case, the labor supply company should pay for the labor benefits of the delivery men. However, delivery men can sue both the labor supply company and the platform company for denying their benefits. I also called two legal assistance hotlines in China (12333 and 12348) to confirm this answer.
Even for delivery men who are aware of their rights, very few pursue legal action. First, the legal process is complicated and time-consuming. Second, many workers believe that platforms, such as Meituan or Ele.me, must have a master plan to counter any accusation, making lawsuits futile. Third, even if a delivery person wins a lawsuit, they still can’t find another labor supply company that offers social insurance to keep working as a delivery person. Therefore, unless the government interferes and changes the landscape of the industry, the legal process will only make sense – and only offers potential benefits – to people who decide to change professions.
In addition to the lack of benefits, many workers suffer under the burden of unrealistic delivery times, because the delivery systems’ estimated time function does not account for traffic or accidents, and, as such, often results in a significant income reduction for the riders while increasing the risk of traffic accidents. When workers have many orders at the same time, they can be easily punished for overtime orders because of unpredicted factors. For example, if a delivery man has ten orders to deliver and the first restaurant takes longer than expected to prepare the food, it can cause a domino effect, leading the worker to go overtime on all the rest of his orders, potentially resulting in lower ratings and even docked pay. Within the current system, the worker can appeal the overtime punishment on the order where the accident occurred. However, he cannot appeal the overtime punishment on all the subsequent orders affected by the first late order, and must pay a fine ranging from 2-50 yuan ($.28-$7.14 USD). Some riders attempt to avoid time overages by pressing the “finish” button early to stop the countdown and then communicating with the customers. However, if the customer chooses to complain because riders clicked “finish” before the meal was actually delivered, the platform can deduct 500 yuan ($71 USD) from the rider’s pay. Afraid of the punishments, workers often weave in between cars, making many drivers unhappy and creating more traffic accidents. According to the government’s official report, during the first half of 2019, in Shanghai alone, there have been two deaths and over 220 injuries related to deliveries by Meituan and Ele.me. (CNR, 2019)
Mr. Liu, an Ele.me part-time delivery worker, shared this anecdote: “One time, when I arrived at the building, there was only one minute left. Unfortunately, the elevator broke and the customer didn’t know. So I thought I could just press “finish” and run up the stairs. When I was at level 10, he called and asked why I pressed finish early before I delivered it to his hands. I couldn’t convince him, because even when I told him I pressed it just downstairs, he [wouldn’t] understand. That time, I got fined 500 yuan.”
In order to address these challenges, adopting a two-step verification would be one potential solution. First, when the algorithm detects that the delivery men arrived at the building (50m), the worker should be able to click “arrived at the building.” Once they’ve arrived at the building, the countdown would stop. The worker would then have a short window in which to deliver the meal into the hands of the customer and click “hand-over.” This two-step process would decrease the number of misunderstandings where delivery men clicked “finish” before physically handing the order to the customer. This solution solves the dilemma that many delivery men have when they are close to the time limit of whether to take an overtime penalty or risk a complaint from clicking the “finish” button early. From the business perspective, this should decrease the management cost, as there would be fewer customers complaining and fewer drivers trying to appeal the decisions.
For delivery workers in China, positive media attention, and official listing during the pandemic did not improve their living conditions or pay. The food delivery industry would benefit from further regulation and from more compassionate rules and technology design. It is interesting to note that similar problems are experienced by many gig workers around the world. On one hand, the gig economy’s low entry barriers can provide many low-skilled workers with employment opportunities. On the other hand, gig workers are lacking employment benefits and rights. As more people rely on gig work as their primary occupations, these problems are becoming more pressing. Countries have yet to find the most appropriate way to regulate the gig economy to better match the needs of both part-time and full-time workers, while also giving gig workers the right they deserve. One recent example is that Uber and Lyft threatened to leave California as the result of California’s Assembly Bill 5, which demands that these ride-share platforms reclassify full-time drivers as employees (NYT, 2020). As China’s gig economy has evolved into the next stage where there are distinctions between part-time and full-time gig workers, China offers an interesting case study. In this “semi-gig economy,” the platform is no longer connecting consumers with suppliers neutrally. It starts to manage labor separately and uses the “gig economy” as an excuse to avoid providing social benefits to full-time workers. More disruptive changes – for both labor and management – are likely coming. The rise of self-driving delivery cars, for instance, could drive hundreds of delivery workers out of the workforce. As more people choose to become full-time gig workers who are highly replaceable, the new norms of the “semi-gig economy” are still unknown.
Zien (Daniel) Chen is a high school senior currently studying in Canada, Victoria. With his interest in business ethics and technology, he wants to become a bridge between all shareholders of the sharing economies. Daniel can be contacted at email@example.com.