What the ruling Communist Party of China couldn’t do was achieved by two capitalists. Driven by competition like true capitalists, two Chinese food delivery companies have started social security schemes for delivery workers.
The food delivery market in China is the biggest in the world, employing more than 10 million delivery riders. Off and on, someone in the government laments their gruelling working conditions and announces that they should be covered by social insurance. Social insurance is a wide-ranging protective umbrella that covers pension, medical, unemployment, occupational injury and maternity insurance. Although in some cities delivery workers are insured for occupational injuries, generally they are excluded from all schemes because they work part-time, or for more than one delivery company at a time. Chinese economists rationalise this exclusion by pointing out that if food delivery firms were to provide these benefits to their workers, their labour costs would be too high to sustain.
What makes it worse is that, though it does nothing for them, the government brazenly doles out advice like ‘take breaks during the day’, ‘drink water when it’s too hot’, to these overworked, underpaid workers. Many among them work 12 hours a day for 8,000 yuan a month, with no fixed salary. They are paid per trip, which they make at dangerous speeds.
Even though a recent survey showed that the majority of the Chinese order food home, delivery workers are treated badly, often seen seated on the floor outside a restaurant in a mall, not allowed entry beyond the main gates of some offices and residential buildings. Videos have shown them having breakdowns in the middle of traffic on receiving a negative review by a customer, or when a cop stops them and delays their delivery.
Change of tune
Why then the sudden concern for them by employers who’ve never shown any before? Only to get a bigger chunk of the market.
The food delivery market has, for years, been dominated by two companies. This year, a third entrant, determined to succeed, tried a radical idea. In February, the company announced — and implemented — not just comprehensive social insurance but also housing funds for all its full-time employees, and medical and occupational injury insurance for its part-time riders, at no cost to the latter. This went beyond government social insurance schemes, which require the employee to pay part of the cost. It also announced a recruitment drive for 1,00,000 full-time riders. To top it all, its chief executive officer spent a few hours on the road as a delivery rider in uniform, waiting for orders and then racing to deliver them.
Alarmed at the potential loss of workers to the new rival, one of the existing market leaders announced its own welfare scheme. Although it was a much watered-down version compared to what the newcomer was offering, it still gave workers what they never had earlier: a 50% subsidy on pensions to those who could pay their contribution to the national pension scheme.
Food delivery workers had never had it so good. Neither had consumers. In its bid to succeed, the new entrant offered way more discounts than the existing companies, forcing the latter to follow suit. Social media was abuzz with consumers advising one another how to store the many milk teas on discount and what toppings lasted well in the freezer. There actually came a stage when consumers threw up their hands and said ‘enough’. The bubble finally burst when the government intervened in May, warning the companies to adhere to the norms of competition. While the insane discounts have petered out, one hopes the workers aren’t left in the lurch.