In the past two decades, riding on the tide of China’s internet boom, tech giants like Alibaba, Tencent, Meituan, and Didi have amassed millions of users and made significant profits to become some of the most valued and influential companies in the world. Behind this development, there were millions of employees and gig workers doing the grunt work.
In China, over 200 million people make their living by doing gig jobs such as ride-hailing services, food delivery, and courier activities, according to government figures from end-2020. “The era of the gig economy is coming,” forecasted an editorial written by Geng Xiang, a professor of economy at Nanjing University, and published by state media Xinhua last year. Geng warned about a “lot of challenges ahead,” in the gig economy, referring to a lack of legal protection, a legal basis for handling labor disputes, and the need for basic social and medical insurance for gig workers.
Fast forward to 2021, following an antitrust and data security campaign on the internet industry launched by the Chinese government, authorities rolled out in July a slew of new regulations governing delivery and ride-hailing platform companies. Among the new regulations, all types of gig workers, including drivers, food delivery workers, and couriers should receive wages that are no lower than local minimum wages. Gig workers should be also insured by their employers, regulators announced, and allowed to rest “enough time,” although regulations did not provide specific details.
According to a recent report by Beijing Zhicheng Migrant Workers Legal Aid and Research Center (BZMW), millions of gig workers are still living on the edge in China, battling against low wages, non-paid overwork, tight deadlines, and other unfair treatments. Recent shopping events like Singles’ Day are examples of tight delivery deadlines and mounting workload for gig workers. From November 1st to 11th this year, the postal and express companies delivered 4.776 billion parcels, a year-on-year increase of more than 20%, data from the State Post Bureau showed.
To cope with the demand, many delivery workers have had to work for over 14 hours daily to deliver up to 400 parcels every day, on average, during Singles’ Day, according to a report by news outlet Yicai. What’s more, delivery workers were also exposed to payment deductions in case of late deliveries, customers complaints, or low ratings on different delivery apps.
Lost in chaos
Wang Jin, a food rider who works for Meituan in Jiangsu, told KrASIA that he usually starts his day around 10:30 a.m. and works for 14 hours straight till midnight—seven days a week. “It’s a daunting job,” Wang said. He delivers 40 to 60 orders daily, and makes around RMB 4,000 to RMB 6,000 (USD 626 to USD 938) per month. “Just enough to maintain my family,” he said.
Wang is not a particular case. More than 95% of food delivery riders work over eight hours daily, while over 30% of them work more than 12 every day, according to research from Beijing Yilian Legal Aid and Research Center of Labor. The report highlights that over 72% of food delivery workers don’t have a minimum wage, and they’re all paid by delivery rate. To earn a decent income, gig workers have no other choice but to extend their working hours, the report denotes.
Further complicating the matter, most delivery workers are not even directly hired by the tech companies they work for. For instance, China’s two largest food delivery giants, Meituan and Alibaba’s Ele.me, have stopped directly hiring full-time workers since 2015 for delivery positions, according to BZMW’s research.
This was confirmed by an Ele.me recruiter in Beijing, who preferred to not be named in this article. He told KrASIA that now “almost all platforms” recruit service workers through third-party agencies. These agencies are small firms that are responsible for hiring, managing, and paying the workers. They usually sign up workers as “contractors,” which doesn’t give them access to a minimum wage, overtime pay, and insurance and injury compensation. Major delivery companies like ZTO and STO also use a similar franchise model.
To be “healthy, reliable, and hard working are the only requirements for delivery jobs,” the Ele.me recruiter told KrASIA.
Franchisers have a “lot of autonomy in choosing who to hire, the contract’s conditions, and the assignments for gig workers,” Aidan Chau, a researcher at China Labour Bulletin, told KrASIA. As a result, workers are often confused about who’s legally hiring them, making it harder to seek protection when there’s a labor dispute. Many franchisers don’t even sign a valid contract with their gig workers, Chau said. “Sometimes, it’s even difficult to prove a labor relationship between a delivery station and a courier.”
Hopes for the future?
Despite the complex situation, there have been some developments taking place on this front since the government’s release of new regulations in July. Only last week, regulators unveiled new guidelines to protect gig drivers’ rights in the ride-hailing industry. The measures look to ensure fair pay and adequate rest time for drivers.
In September, the State Administration for Market Regulation (SAMR) summoned 11 ride-hailing companies and ordered these firms to safeguard their drivers’ labor rights and halt all business actions that disrupt market order. Among the inquired companies were Didi and state-backed Shouqi Yueche. The same month, the SAMR also inquired ten of the largest Chinese internet companies—including Alibaba, Tencent, and JD.com—and told them to “rectify” existing problems within their platforms. The regulators asked companies to safeguard the labor rights of workers, according to state media CCTV.
The inquired companies pledged that they would comply with regulations to provide a better working environment. Meituan issued a statement in September, saying it warned its over 1,000 delivery stations across the country to stop registering food delivery workers as independent business owners and provide proper contracts. At the same time, Didi and JD.com both created labor unions that will be affiliated with the All-China Federation of Trade Unions, or ACFTU, a government-backed, national-level labor organization.
Chau, however, cast doubts about the validity of such unions to protect workers. “Different from traditional labor unions that people would think of, they don’t represent workers to negotiate for more rights with the employers,” Chau said. Instead, unions “usually stand out to settle the disputes, and workers won’t go to the unions for help as they don’t usually trust them,” he said.
“The current system is hard to change as it is designed to push the workers to work more. Also, there will be a huge cost for companies if they’re to provide insurance for every gig worker,” Chau added.
It is yet unclear how the Chinese gig economy will evolve, but Meituan’s delivery rider Wang has already decided to stop soon ferrying meals. “I used to believe that I could make more money as long as I could work harder, but reality failed me. I might just save a bit more and then go back to my hometown to start my own small business. I want to work for myself,” he said.
