China’s Ministry of Transport (MoT) has summoned four freight-delivery platforms over operational irregularities and sent reminders to four ride-hailing firms over driver protection, fair competition, and transportation safety, as reported by Reuters on January 21. The MoT has discussed drivers’ complaints regarding arbitrary pricing rules, membership fee increases, unfair competition, and illegal practices such as overloading with the four cargo-delivery companies, including Didi Chuxing’s [DIDI:US] cargo unit, Didi Freight, Full Truck Alliance [YMM:US], Huolala, and GOGOVAN, calling for immediate rectifications. The MoT also required the four ride-hailing platforms, including Didi Chuxing and Meituan [3690:HK], to publicly ask for opinions from drivers before they formulate or adjust business strategies that involve drivers’ interests, such as pricing bidding rules, revenue distribution rules, and membership fees.

The meeting aimed to better protect the rights of gig workers, as distinguished from full-time employees. The number of gig workers in China has amounted to around 84m by the end of 2020. Last July, China’s State Administration for Market Regulation (SAMR) and six other government agencies published guidelines on guaranteeing the basic rights for laborers in new employment forms. The new guidelines covered food deliverymen, drivers for ride-hailing platforms, and other delivery riders. These gig workers share complaints about low wages, lack of insurance, and lack of labor contract, as online platforms such as Meituan [3690:HK] and Alibaba-backed [BABA:US] Ele.me outsourced their delivery services to third-party companies to reduce cost and avoid legal risks. In response, China’s nine ministries including NDRC and SAMR drew up a guideline regarding standardized, healthy, and sustainable development of the platform economy on January 19, vowing to identify the labor relations between workers, platform companies, and labor cooperative enterprises.

Sources:

https://www.reuters.com/world/china/chinas-transport-ministry-summons-cargo-service-firms-over-operational-issues-2022-01-21/

https://www.caixin.com/2022-01-21/101833239.html?sourceEntityId=101833470

https://www.scmp.com/tech/big-tech/article/3164355/beijing-lectures-alibaba-tencent-other-big-tech-firms-gig-workers

https://www.scmp.com/tech/big-tech/article/3142588/china-moves-protect-food-delivery-drivers-digital-exploitation?module=inline&pgtype=article

https://www.chinamoneynetwork.com/2022/01/21/china-issues-new-rules-regulating-internet-giants-and-platform-economy