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Foodpanda is facing a brand crisis in Thailand, but delivery riders bear the brunt

Written by Stephanie Pearl Li Published on     6 mins read

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Foodpanda’s business crisis is impacting riders’ wallets as orders have decreased after an incident during a pro-democracy movement.

On July 18, a video of a man in a black shirt setting fire to portraits of Thai kings during a pro-democracy rally in Bangkok was posted online. In another clip, he is seen riding away with a woman on a scooter saddled with Foodpanda’s pink thermal box.

The event sparked a consumer boycott against Foodpanda—Thailand’s second largest food delivery firm—as the company later, via a tweet, linked pro-democracy protesters to terrorism, threatening to fire the involved rider “immediately.”

Damaging portraits of the royal family is a severe violation under Thailand’s harsh lèse majesté law. Transgressions could translate into a maximum of 15 years in prison. Even so, part of the general public, labor activists, couriers, and merchants considered Foodpanda’s reaction as too severe and non-supportive of the pro-democracy movement. Since last year, demonstrators have been calling for the reform of the Thai monarchy.

Foodpanda later shifted its tone by posting another tweet indicating that the rider would not be dismissed, adding that “freedom of speech and expression is not terrorism.” But it was already too late.

The hashtag #BanFoodpanda garnered over 1.2 million tweets in a little more than two days. Reportedly, over 2 million users and 90,000 merchants quit the platform just over a week after the incident, although Foodpanda said the reported numbers were “inflated.”

A Foodpanda spokesperson, when asked by KrASIA, didn’t disclose any numbers about the impact of the crisis. “While orders were affected in the period immediately after the incident, Foodpanda’s long-term mission of supporting our community of riders and restaurants and to serve our customers does not change,” the spokesperson said.

Despite Foodpanda’s apologies, labor activists and riders see the firm’s actions to reshape its tarnished image as insufficient.

“Foodpanda’s first statement unveiled the contradictions behind the food delivery sector. Even though delivery workers are not regarded as formal employees by the company, Foodpanda has absolute power over its workers,” said Kriangsak Teerakowitkajorn, managing director of the Just Economy and Labor Institute, a Thai labor rights nonprofit organization.

Although the boycott calls have seemed to dim across social media, Foodpanda’s business crisis is still impacting riders’ wallets, as they are experiencing a significant loss of orders, which makes their livelihoods even bleaker amid times of economic and healthcare crisis, according to Kriangsak.

“It is really hard to speculate on the magnitude of the incident. We heard from many Foodpanda workers that their number of orders has been drastically reduced. However, there is not much clarity of the whole situation due to the lack of transparency. Although the boycott seems to have quieted down a bit, the impact was severe, and riders were the hardest hit,” he told KrASIA.

Riders’ plight

Fifa, a Foodpanda delivery rider who lives in Chiang Mai, is feeling the boycott’s effects first-hand. He used to earn THB 800 to TBH 1,000 (USD 30) per ten-hour shift. Now, he makes a maximum of THB 600 (USD 17) per day, down 43% on average, he said. His other colleagues have also experienced a significant drop in income, Fifa added.

He was shocked and disappointed to read the company’s initial statement about the protestors. “I didn’t expect Foodpanda to label the riders as terrorists. The guy [in the video] was not doing anything violent. Using the word terrorist was too strong,” Fifa, who prefers not to reveal his real name, told KrASIA.

Fifa joined Foodpanda three years ago when he was 26 years old, as the gig promised a great level of flexibility and a solid income. “Foodpanda gave me more orders. Unlike other platforms where riders sometimes have to compete for orders, I didn’t have to do that,” he said.

As a full-time rider, Fifa still works at least ten hours a day, six days per week. However, he does not receive a stable salary and is not protected by basic labor rights, as food delivery drivers are considered “partners” or freelancers by tech firms like GrabFood and Foodpanda. With no labor protection, he depends solely on his daily number of orders to survive.

The Foodpanda spokesperson said the firm has launched an array of initiatives to support riders after the boycott, including giving riders an additional THB 10 premium (USD 0.30) for each order (for the first 1 million total orders received by Foodpanda after the boycott). The firm is also giving out discounts on the app to encourage customers to order more, the spokesperson said, to “support the livelihoods of riders and restaurants.”

“Some of our employees even mobilized donations to provide free meals and daily goods to all riders to show our appreciation for their work. However, we know that the real recovery for riders and restaurants’ earnings comes in the form of order numbers,” she added.

Yet, the initiatives are not convincing the riders, according to Fifa. “After the company apologized on Twitter, they gave drivers hand sanitizer, free lunchboxes, as well as a code that riders could use to earn extra THB 10 for every order. However, I don’t think it’s helping at all. It’s useless,” Fifa said.

He added that these one-time benefits could not solve the fundamental issues within the system. For example, he had to pay several hidden costs to join the platform and to continue operating as a rider.

“Foodpanda takes away THB 1 for every order, the fee may sound insignificant, but if you add it up, it takes away THB 100 (USD 3) for every 100 orders. I have to pay for everything by myself, including THB 2,500 (USD 75) for the company jacket and delivery box, as well as THB 400 (USD 12) to apply for a criminal background check,” he said.

Fifa used to work as a sales supervisor for a yogurt company in Chiang Mai before joining Foodpanda in 2018. Photo courtesy of Fifa.

Flexibility over labor protection?

Thailand is home to the second-largest food delivery market in Southeast Asia after Indonesia, making it a very competitive sector with an array of players springing up to meet the demand, especially during the pandemic. GrabFood took up 50% of the USD 2.8 billion market in 2020, followed by Foodpanda’s 23% market share, and Lineman’s 20%, according to a report by Singaporean research firm Momentum Works.

As the food delivery market continues to heat up, Kriangsak argues that companies should treat their riders better and support them in moments of crisis. “The lesson that we could draw from this incident is that delivery companies only care about their customers and their business. While companies continue to boost sales to compete with other players, drivers are the ones that bear the brunt of their problematic business model,” he said.

“Delivery platforms are the de facto employer of riders, but in reality, these platforms are not willing to take steps forward to ensure minimum standards of employment and protect riders according to the labor rights law. There is an imbalance where companies could easily deactivate the riders from their platforms or put a fine on riders if they make any mistake,” he explained.

Foodpanda thinks otherwise. “We were the first delivery platform [to launch operations] in Asia in 2012. In these nine years of working with riders, we know that they value flexibility and autonomy as key reasons for coming on to the platform,” the spokesperson told KrASIA.

“Changing the status of riders does not reflect the dynamic nature of what riders value in this job and working relationship. Riders value the flexibility to work whenever it’s convenient for them, and in whatever length of time they choose,” the spokesperson added.

Yet, delivery riders’ protests have been growing in the past months. On Wednesday, over 100 Foodpanda delivery drivers staged a strike outside a government building in Chiang Mai to protest against an undisclosed plan to cut riders’ pay per order to BHT 21 (USD 0.64), a drop of over 30% from the original rate of around one dollar.

Other food delivery firms have also been the subject of numerous protests. Last August, over 500 Grab drivers gathered in front of the company’s offices in Bangkok to urge the firm to improve their working conditions, per a Bangkok Post report. Other strikes have also recently taken place in major cities, demanding higher payments in the food delivery industry, Nikkei Asia highlighted.

Fifa, despite having a lower income, is “left with no choice” but to continue working for Foodpanda, he said. He has thought about leaving the company over the years, but he realizes that it will be hard to find a job that could guarantee greater flexibility and a higher salary. The same happens for thousands of other delivery riders in the country, Fifa said.

“I want to be my own boss one day,” he remarked.

Read more: Myanmar’s coup nearly put food delivery drivers out of business | Tech in Culture

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