Meituan, China’s leading food delivery platform, took a beating this week in both public opinion and stock prices.

Aside from Shanghai regulators’ interview (Pinduoduo was also interviewed on the same day), there were two specific episodes.

In both cases someone went to work as a food delivery rider and ‘uncovered’ the hardship facing millions in the profession.

  1. Deputy Director for labour relations at Beijing’s Municipal Human Resources and Social Security Bureau
  2. A sociology post doc candidate from Peking University (PKU)

In both cases, and especially the one with the PKU post doc, the reports and new reports highlighted how hard it was for the riders. The theme was “How do capital control workers, and how do workers rebel against it.”

Of course, that created a lot of sympathy in the society – sparking debates on whether the platform should pay pension and social security, or whether they should remove the KPIs …

For me, this just shows the complete ignorance of the sociology academic on how the economy functions, including how every player gives their contribution to, and benefit from the economy.

A few thoughts:

  1. Someone who is in ivory tower will usually not be exposed to physical labour. As a result, any such labour would be hard for them.
    They would have reached the same conclusion if their field study was not in food delivery, but in factory work, farming, logistics …
  2. It is worth for the post doc to reflect why even if life is ‘so hard’, millions choose to work as food delivery riders, not factory workers, farmers, or warehouse clerks.
  3. It is pretty arrogant for someone from a position of power to ‘sympathise” with millions of ordinary hardworking people, who just try to make their ends meet.
  4. Food delivery platforms are a thin margin business, which relies on scale to make economic sense. Majority of the commission Meituan charges merchants goes to the riders.
    In 2017, Meituan made $0.04 (CNY0.27) per order profit in its food delivery segment. Even if they pass the entire thing to riders, it will not be much.
  5. The best way for policy makers is to create more job opportunities for ordinary workers, rather than making life difficult for both platforms and the people whose livelihoods depend on them.
  6. Do not forget the economic value the platforms provide to various stakeholders, in addition to the riders. Those include customers, restaurants and other businesses that are built alongside the ecosystem.

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at hello@mworks.asia.

 

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Jianggan Li is the Founder & CEO of Momentum Works. Prior to founding Momentum Works, he co-founded Easy Taxi in Asia, and served as Managing Director of Foodpanda. The two years running Rocket Internet companies has given him a lifetime experience on supersonic implementation, and good camaraderie with entrepreneurs across the developing world. He holds a MBA from INSEAD (GMAT 770) and a degree in Computer Engineering from Nanyang Technological University. Unfortunately he never wrote a single line of code professionally - but in his first job he was in media, travelling extensively across Asia & Europe, speaking with Ministers & (occasionally) Prime Ministers. Apart from English and his native Mandarin, he is also fluent in French and conversational in Cantonese & Spanish. He tried to learn Latin (for three years) and Sanskrit (for six months) as well. In his (scarce) free time, he reads, travels, hikes and dives. Pyongyang, Tehran & Chisinau are among the interesting cities he has been to.