E-commerce giant Alibaba confirmed with KrASIA on Monday that its food delivery unit Ele.me has paid the initial medical fees for a delivery rider who set himself on fire in Jiangsu province due to a pay dispute, days after the tragedy received widespread attention.
Ele.me said the company was heartbroken for the man, surnamed Liu, and would probe Jinjiang Paoying Company, Ele.me’s local logistics partner, over Liu’s allegations of unpaid wages for delivery riders.
The food delivery unit has been under public scrutiny since another Ele.me delivery rider suddenly died while working in December. Ele.me offered only RMB 2,000 (USD 308) in compensation “out of humanitarian spirit”, citing the rider’s lack of direct employment as an excuse. Finally, on January 8, the company succumbed to huge public pressure and agreed to pay RMB 600,000 (USD 92,418) to the rider’s family.
These two extreme cases highlight the lack of workplace protections for about 200 million gig workers in China when the digital economy is expanding, triggering further questions over the lack of social saftey net for these workers.
Like Ele.me, Meituan, ride-hailing platform Didi Chuxing, and on-demand grocery delivery platform JD Daojia have all built their business models upon an endless supply of tireless delivery riders who flocked to large cities to make a living. Rather than hiring and managing a huge base of employees, the companies treat these laborers as contractors, sparing firms the social security expenses. Normally, these gig workers are paid based on the number of orders they have fulfilled, resulting in brutal overtime hours, and occasional disregard for traffic rules, sometimes resulting in accidents. Meanwhile, the commission per order for delivery riders has been falling as the delivery platforms grow in scale, adding pressure to an already dangerous occupation.
“During the third quarter, we further upgraded our delivery dispatch system to provide our riders with greater flexibility in terms of delivery time and task designations during unexpected situations, such as bad weather and heavy traffic,” said Meituan in its earnings release in November 2020.
This statement came after food delivery platforms incurred wide criticism for pressuring their riders to deliver meals within 30 minutes, compared to the previous timeframe of between 35 minutes and 50 minutes.