China’s State Administration for Market Regulation, or SAMR, issued new rules to improve labor conditions for the employees of food delivery platforms on Monday. The regulator demanded companies that provide food delivery services to guarantee a base income and social welfare for their riders, who are often gig workers.
The SAMR issued the statement together with six other regulators, including the National Development and Reform Commission, the Cyberspace Administration of China, and the Ministry of Public Security. The new policy states food delivery riders should receive wages that are no lower than local minimum wages. It also requires changes for laxer performance evaluation systems, work assignment loads, and delivery deadlines. All delivery personnel should be able to join labor unions.
In 2020, about 800 million people were part of China’s sharing economy, which included 7 million food delivery drivers, according to research by Beijing Yilian, a research institute that focuses on labor laws.
Riders in China have long faced a stressful working environment. More than 95% of delivery riders work more than eight hours a day, and 38.80% work between 11 and 12 hours a day, according to Beijing Yilian’s research. With exacting demands set by the algorithms of food delivery platforms, riders often need to race over the speed limit or charge through red lights to ensure they make their deliveries on time, local media has reported.
The work conditions have been a subject of controversy in China. In January, a food delivery driver set himself on fire outside a shop due to a pay dispute. The incident stirred outcry on social media, with customers and riders imploring tech companies to protect the rights of gig workers.
Tencent-backed Meituan responded that it will follow the SAMR’s direction to actively improve its riders’ welfare. The food delivery platform said in the first half of 2021, it held nearly a hundred discussion events across the country and collected suggestions from riders. The company is now implementing a pilot for injury insurance, employment protections, and other benefits for riders. Meanwhile, its major competitor, Alibaba-backed Ele.me, has not issued a public response at press time.
The share price of Meituan fell more than 5% at one point on the Hong Kong Stock Exchange, taking it down to half its highest price point this year.
Read this: Pinduoduo’s troubles deepen after second worker dies