Ten years ago, when the food delivery war just started, everything looked so optimistic: consumers could choose a richer variety of meals in the office, restaurant income was no longer limited by store seats, and riders could earn tens of thousands a month without complex professional skills. Gradually, the platform used tens of billions of subsidies every year to help people develop the habit of ordering on the screen and waiting for food to come to their doorsteps in this country where the per capita daily dining expenditure is just over 20 yuan.
Ten years later, platforms no longer spend money on subsidies, consumers are more cautious and picky with their money, and restaurants’ profit margins for food delivery have been repeatedly compressed, but the number of riders willing to deliver food is only increasing. As we summarized at the end of last year, after the end of high growth, the conflict shifted from growth to distribution, and Internet platforms eventually faced legality issues. The most obvious one for food delivery platforms was the situation of riders.
Millions of riders are Meituan’s deepest moat. With this as its core, Meituan earns tens of billions of yuan in commissions and online marketing revenue every quarter. What responsibilities platforms should bear for such a large workforce, from wages to social security, have been discussed by the public and regulators for many years.
As a new entrant, JD.com does not have the burden of scale. In the past week, JD.com, which recently launched, announced that "merchants have zero commission" and "the platform pays full social security for riders." On the same day, Meituan and Ele.me, the top two companies in the industry, also stated that they would pay social security for their riders. Relevant people from the two companies respectively stated that they had discussed for a long time with the Ministry of Human Resources and Social Security about paying social security.
Paying social security for riders is just the beginning. If all 1 million riders pay social security, the annual cost will exceed 13.7 billion yuan (calculated based on Chengdu). If riders choose the principle voluntarily, the platform’s previously estimated expenditure would be around 8 billion yuan.
Riders are very mobile, and there are only a few people who work for one company in one city for several consecutive years. Paying social security also involves the signing and termination of labor contracts for millions of people, and the procedures for social security transfer. Every increase in cost affects the final implementation effect.
and the rider’s own wishes. The reason why the outside world supports the platform's payment of social security is that it will help the livelihood of riders, but a considerable number of riders are unwilling to participate in insurance due to various practical reasons. For social security to really help this group, letting the platform pay is only the first step.
Platforms paying social security for riders may be just the first step in changing the relationship between Internet platforms and blue-collar labor. People see riders in yellow and blue uniforms walking through the streets every day, and it is easier to pay attention to this group. However, most of the operations of China's Internet platforms rely on the super labor network that they participate in organizing - the world's largest and most efficient delivery riders, couriers and online ride-hailing drivers. They face the same problems that riders face.
The bottom line of it all, of course, is that one person's income is another person's expense. It’s easy to support working people, but at the end of the day are people willing to pay for it?
In this regard, we listed seven questions and interviewed many platform people and experts who have long studied gig work issues.
How many people do each platform need to pay social security? There are currently no more than 2 million people
JD.com said it would pay five insurances and one housing fund for full-time takeaway riders, Meituan said it would pay social security for full-time and stable part-time riders, and Ele.me said it would launch a Blue Rider social security payment pilot in 2023 and would provide all-round protection. None of the three companies has yet given an accurate definition and applicable number of full-time riders.
Currently, when you order takeout from JD.com, Meituan, or Ele.me, the probability of delivery is not a full-time rider, but a rider who has signed a labor contract with a local labor service provider that cooperates with the three companies, or a self-employed person who has signed a labor contract directly with the platform.
Through interviews and compilation of past public information, we learned:
Food delivery platforms mainly divide riders into two categories: dedicated delivery and crowdsourcing based on their work attributes.
Special delivery riders are subject to site management and are required to work hours and number of orders per month. They are also required to be present during specific periods (peak periods or extreme weather). They ensure the stability of the platform's delivery capacity.
Crowdsourcing riders are part-time workers. After self-registration, they can freely choose the time and quantity of orders. There is no fixed commuting time and personnel management.
Fangdada Group, the actual carrier of JD.com’s food delivery, operates a part-time crowdsourcing model and has not previously set up full-time delivery riders. As far as we know, Dada currently has 30,000-40,000 riders who actually work on the platform full-time. The 1.3 million annual active riders it disclosed are riders who receive 1 or more orders on the platform every year. JD.com’s social security payments this time are for eligible full-time riders among Dada riders, but JD.com has not yet disclosed specific standards.
Meituan has about 7.5 million riders taking orders a year, but most of them are crowdsourced and do not work every day. Some only work a few times and then stop taking orders. Meituan has disclosed that the number of high-frequency riders in 2023 (running orders 260 days a year and taking orders for more than 6 hours on average per day, which is close to the 250 working days and 8 hours of work under the labor law) is about 820,000, including riders in its different systems. In recent years, as more workers have poured into the food delivery industry, this number may exceed one million.
Ele.me has more than 3 million registered riders, and the number of daily active riders is about 1.2 million, of which about 200,000 are full-time employees on the platform. Ele.me said this data is not accurate.
A platform person told us that in recent years, human resources and social security and other regulatory authorities have pushed platform companies to provide more complete labor security measures for workers. Supervision hopes to strike a balance between the interests of multiple parties - taking into account not only the operating pressure of social security fees on the platform, but also the particularity of new employment forms such as riders, the rider's willingness and the impact of payment on the rider's income. On this basis, sustainable improvements should be made, rather than giving clear instructions and requiring a certain goal to be achieved in a short time.
At present, the attitude of Meituan and Ele.me is to conduct research and pilot projects in some areas first, and jointly contribute funds and payments for riders who meet the conditions of inclusion in the society in accordance with the law and respect the wishes of the riders. After future adjustments and iterations, it will be gradually promoted to more regions until it covers full-time riders across the country. But there is no clear timetable for nationwide coverage.
How much money does the platform need to invest in this? If riders choose voluntarily, the long-term cost may be 5-8 billion yuan per year.
If we want to provide riders with better labor protection, the platform needs to bear two parts of the cost. One is to pay occupational injury insurance per order, and the other is to pay social security on a monthly basis.
We learned that Meituan, under the guidance of the Ministry of Human Resources and Social Security, plans to gradually cover occupational injury insurance for riders nationwide. Based on the 7.1 billion orders delivered by Meituan in the third quarter of 2024, each order will be paid 0.06 yuan, and Meituan’s single-quarter expenditure will be 426 million yuan. If Meituan Delivery maintains its current business growth rate, the annual expenditure on occupational injury insurance covering all riders may be close to 2 billion yuan in the future.
The monthly wages of takeaways and couriers vary with the number of orders. The platform usually pays according to the local social security minimum payment base. Most of Meituan’s food delivery orders come from first- and second-tier cities, where full-time riders are also concentrated. We selected two city samples, Chengdu and Beijing, for interval calculation, and calculated the cost of paying five social insurances and one fund based on the local minimum social security payment base in 2024 (Chengdu 4,511 yuan, Beijing 6,821 yuan). Chengdu requires companies to contribute 1,143.55 yuan per month, and individuals to contribute 469.14 yuan per month; Beijing requires companies to contribute 1,821.21 yuan per month, and individuals to contribute 716.21 yuan per month.
The minimum social security payment base in most second-tier cities across the country is above 4,000 yuan. If calculated based on Chengdu's base, if 1 million riders are fully covered, the social security fees paid by the platform will exceed 13.7 billion yuan.
Meituan’s main revenue comes from delivery services, commissions, and online marketing services. Among them, the distribution business is not profitable, with a gross loss of 0.64 yuan per order in the first half of 2024. But it is precisely because of the delivery business that catering businesses are willing to pay tens of billions of yuan in commissions and marketing fees to Meituan. In the first half of last year, Meituan’s operating profit was 16.5 billion yuan.
In reality, there shouldn’t be that many, because the final implementation may be based on the rider’s voluntary principle. More than half of the riders have stated in previous surveys by the platform that they want higher income and are unwilling to pay social security.
We got a Meituan calculation report on social security issues around 2022. At that time, Meituan’s average daily order volume of food delivery was 44 million. Meituan estimated that 1 million riders would be eligible for social security payment. Considering that some riders lack the willingness to participate, the platform estimated that the long-term cost of social security for riders may be 5 billion to 8 billion yuan per year. After equalization, the cost per order will increase by 0.3 yuan to 0.5 yuan.
The recent impact is smaller. Several investment banks and securities firms close to Meituan have given forecast figures: two insurances (occupational injury insurance gradually covering all riders, and social security pilot) are expected to cost 2 billion yuan in 2025.
People close to Meituan told us that the platform hopes to absorb short-term social security costs by improving its own efficiency in the short term. When consumers become more price-sensitive and industry competition intensifies, Meituan does not want to increase the cost of food delivery.
It is difficult for the platform to absorb costs by reducing rider income per order. Riders move independently. When the delivery unit price of one platform is lower than that of other platforms, riders will switch to other platforms. If the number of full-time riders who are willing to participate in social security continues to increase and the payment amount exceeds what the platform can absorb, these costs will eventually be passed on to consumers at a premium, and the price of each takeaway order will rise.
What protections did riders already have before?
After JD.com entered the food delivery industry, in addition to stating that it would provide five insurances and one housing fund for riders, it also promised to provide accident insurance and health and medical insurance for part-time riders. However, JD.com has not announced the specific details of accident insurance and health medical insurance for part-time riders. Meituan, Ele.me and other platforms have also taken relevant measures before.
The existing insurance for Meituan and Ele.me riders includes two parts, one is occupational injury insurance, and the other is rider commercial insurance. Occupational injury insurance was investigated by the Ministry of Human Resources and Social Security in conjunction with multiple departments in 2019, and will be piloted in industries such as online ride-hailing, takeout, and freight transportation in 2022. The platform will pay workers a fee of 0.04 yuan to 0.2 yuan for each order. It is currently being piloted in 7 provinces and cities. The latter is commercial insurance and requires a daily premium of 2.5 yuan to 3 yuan, which is withheld by the platform/service provider from the rider’s first income of the day.
Occupational injury insurance is similar to work-related injury insurance in social security, and mainly covers accidental injuries encountered by riders while providing delivery services. Commercial insurance covers accidental injuries and third-party liability, including traffic accidents, falls, and third-party losses. In actual use, some riders reported that commercial insurance has problems such as complex and unclear terms, cumbersome claims process, and insurance companies shirk responsibility, making claims difficult.
Paying social security is indeed beneficial to riders, but they also have concerns about income.
Social security has clear benefits for riders. The medical, maternity, and work-related injury insurance in social security are all paid in the same period. Riders can use the balance of their personal medical insurance accounts to enjoy a higher reimbursement rate than the basic medical insurance for urban and rural residents when seeking medical treatment at the place of payment.
Unemployment insurance can be received after one year of payment. The amount of unemployment insurance benefits is determined based on the cumulative payment time. The maximum time for receiving unemployment insurance shall not exceed 12 months. The current pension insurance system stipulates that workers need to participate in the insurance for a total of 15 years, and it is planned to gradually extend the insurance period to 20 years after 2030. After meeting this condition, workers can receive pensions on a monthly basis after reaching the statutory retirement age.
Theoretically, social security will also affect the daily life of riders. For example, many first- and second-tier cities across the country require workers with non-local household registration to handle local services such as buying a house, applying for license plates, and sending children to school, and they are required to meet a certain number of years of local social security payment records. In fact, there are only a few riders who buy houses, cars, and have children in first- and second-tier cities.
But many riders have their own concerns. Paying five insurances and one housing fund will have the most direct impact on riders, which will affect their income and reduce the cash they receive.
Social security for urban employees is paid jointly by employers and workers, of which companies bear 16% and individuals bear 8%. Calculated based on the minimum base payment conditions of Chengdu and Beijing mentioned above, the monthly personal social security contribution of Chengdu riders is 469.14 yuan, and the monthly personal social security contribution of Beijing riders is 716.21 yuan.
This means that after a considerable proportion of riders pay social security, their monthly income will be reduced by 400 yuan to 700 yuan, which is equivalent to the rider's income for one to two days.
JD.com announced this week that it will fully bear the personal social security contributions of delivery riders. The background is that there is a significant income gap between JD.com’s full-time delivery riders and JD.com’s couriers, and the platform hopes to quickly expand its transportation capacity reserves. This policy will be financially tested as the business scales up.
In addition to income, riders’ mobility also affects the protection they can receive
In his book "Intelligent Revolution and the Future of Riders," Ge Tianren, associate professor at Tongji University, surveyed 1,559 relevant workers in 10 takeout delivery companies in Shanghai and found that 78.21% of couriers had worked for less than 3 years. There are only a handful of people who have been working in a site for more than a year. Data from a 2022 survey by the Zhengzhou Market Supervision and Administration Bureau shows that the monthly turnover rate of crowdsourcing riders in Zhengzhou remains at around 20%, and the average rider length of employment is less than one year.
Most food delivery consumption occurs in first- and second-tier cities, and most of the local riders are migrant workers. They will most likely not buy a house to settle down and retire there. Some riders are unwilling to buy more expensive insurance in the city because they have already paid for lower-cost urban and rural residents' medical insurance and pension insurance in their hometown.
The current social security system supports the transfer of personal social security between regions, but if riders transfer social security, the protection will become weaker.
Specifically, the social security paid by the platform and the rider individually is divided into the overall account and the personal account respectively. When the rider leaves the original insured place, the personal account funds (pension + medical insurance) can be transferred in full to the new insured place, while the pension insurance in the overall account can only be transferred at 12% of the total payment, and the medical insurance unified account cannot be transferred.
If the rider ultimately fails to meet the 15 or 20-year cumulative social security payment requirement, he can apply to the local social security center to receive the entire balance in his personal account at once after reaching the statutory retirement age, but he will not be able to obtain the basic pension supported by the overall account, which is equivalent to personal monthly payments and a non-interest-bearing time deposit after retirement.
In addition to social security for urban employees, some platforms have also piloted other security plans before. Some online ride-hailing platforms choose to cooperate with commercial insurance to pay personal pensions for full-time drivers. If the drivers are willing to pay, they will contribute capital to the platform at a ratio of 1:1. The payment amount is lower than the urban employee pension, but only some drivers are willing to participate. Many online ride-hailing drivers had full-time jobs before and had paid social security contributions. They are usually more willing to participate in insurance than riders.
After paying social security, the rider's employment form will also change, or it may shift from labor service to labor contract.
When food delivery first emerged, most riders took orders part-time, and the platform signed labor contracts with them that were applicable to part-time jobs, that is, an agreement in which one party provides labor services and the other party pays remuneration, and the two parties negotiate on their own to determine the content of the work and the method of remuneration.
A labor service contract is different from a labor contract. The former is subject to the Civil Code, and because of the temporary nature of the employment, the labor service provider must bear the risks and responsibilities on its own; the latter is a relatively stable long-term employment, and the Labor Contract Law is subject to it, requiring the employer to provide workers with protection in aspects such as health and safety, and must pay social insurance premiums for workers in accordance with the law.
The labor contract has been in use for more than ten years and has witnessed the growth of Chinese food delivery riders from hundreds of thousands to tens of millions. More and more riders have gradually turned from part-time jobs in the early years to full-time jobs and are making a living from it. The labor contract no longer adapts to their work status, and the conflicts caused by the lack of protection during the labor process have become increasingly prominent.
The platform pays social security for the riders, which means that the employment form between the two parties may change from a labor contract to a labor contract. For example, JD.com plans to draw on its logistics experience to allow delivery riders to sign labor contracts with the company like JD.com couriers. However, this is based on the current small number of JD.com delivery riders.
The situation of Meituan and Ele.me is more complicated. If the existing millions of riders want to sign labor contracts, they will need to add a lot of manpower to handle contract signing and cancellation, social security transfer procedures, daily employment management and coordination, etc. Moreover, riders usually only stay on the job for a few months, so the platform needs to process millions of labor contracts scattered in dozens of cities every year. This cost further increases the difficulty of implementing labor contracts. Currently, each platform is still in the discussion stage.
Platform companies involve large-scale employment. The solution that can be referred to is the "three-part labor law" proposed by eight ministries and commissions including the Ministry of Human Resources and Social Security in 2021. In addition to full-time corresponding labor contracts and part-time corresponding labor contracts, a third situation of adapting to new employment forms is "not fully consistent with the establishment of labor relations." When an enterprise performs labor management on workers, both parties enter into a written agreement to reasonably determine the rights and obligations of the enterprise and the workers. This agreement may help platforms handle social security more flexibly.
In addition to food delivery riders, other gig industries also need labor protection
Zhuang Jiachi, an associate professor at the School of Social Sciences and Psychology at the Central University of Finance and Economics, has been studying the labor process of couriers for a long time since 2016. He has worked as a courier in many express delivery outlets. In his view, society currently attaches great importance to food delivery riders, and the rights and interests of workers in many industries are not even as protected as those of riders.
He has observed that many couriers will change careers and become food delivery riders, but so far he has not seen any delivery riders change careers as couriers. The reasons for couriers to change careers include that they have more flexible working hours when delivering food, and their wages can be paid on a daily basis without the need to worry about being owed. For the same lost delivery, the compensation cost for the delivery driver is relatively low, usually only a few dozen yuan, while the courier may pay hundreds or even thousands of yuan.
According to a 2023 Strawberry Pie Data survey on the income of 7,004 blue-collar workers, the average salary of a food delivery driver is higher than that of online ride-hailing drivers, construction gig workers, couriers, general factory workers, security guards, cleaning and other occupations.
Data from Meituan and Ele.me platforms can also illustrate the problem. After the epidemic, the food delivery industry has seen an influx of new riders on a scale of millions every year, and food delivery, online ride-hailing and other industries are regarded as reservoirs of employment. What attracts workers is that such jobs have more flexible working hours and relatively competitive wages.
Meituan data shows that in first-tier cities such as Beijing and Shanghai and fourth- and fifth-tier cities such as Zhenjiang in Jiangsu and Zhuzhou in Hunan, the per capita monthly salary of high-frequency ordinary crowdsourcing riders is 7,629 yuan and 5,720 yuan, converted on an annual basis, which is higher than the per capita disposable income of urban residents in several cities above 2023.
Employers in other gig industries generally do not contribute to social security either. As of the end of 2023, China will employ 740 million people nationwide, of which more than 400 million are blue-collar workers, accounting for more than half. According to data from the Ministry of Human Resources and Social Security in March 2024, the number of people insured by basic pension, unemployment, and work-related injury insurance nationwide were 1.07 billion, 240 million, and 290 million respectively. Considering that only urban employees are required to pay all five insurances for social security, the number of unemployment insurance participants can more accurately reflect how many workers in China have complete social security protection.
Take the express delivery industry as an example. Only SF Express and JD Logistics in the industry employ couriers full-time, sign labor contracts for them, and pay social security and provident funds for them. Most companies in the industry are franchised. Couriers have no direct employment relationship with the head office and are closer to gig workers. The company usually does not pay social security.
SF Express and JD.com are able to achieve this because they rely on the support of their main businesses of air express and e-commerce. They have maintained the time-sensitive express delivery products with the highest unit prices and have enough profit support. Economic franchised express delivery has long been trapped in a price war for express delivery. The profit per order is only a few cents. The company has maintained low profit margins for a long time. Some outlet franchisees may suffer losses. The income of terminal couriers may be affected, and it is impossible to pay social security.
Previous supervision focused more on wages to prevent companies from excessively lowering employees' incomes. The Yiwu Express Price War in 2021 drove the price of express delivery to 0.8 yuan or even lower. The Ningbo Postal Administration subsequently interviewed the heads of relevant companies, closed outlets, and required that the delivery fee be no less than 1 yuan. Relevant professionals said that the newly set floor price mainly takes into account the income of couriers, so that their income should not be lower than the local minimum wage after paying social security on their own (even if they may not pay).
Now the social security requirements for couriers may also be adjusted. The State Post Bureau released seven practical things to make the postal express industry closer to people's livelihood in 2025 at the first quarter regular press conference on February 19. Article 5 clearly stated that some cities should be selected to carry out pilot labor contract systems in the express delivery industry to promote express delivery companies to sign labor contracts with employees in accordance with the law.
We understand that many franchised express delivery companies have received relevant notices and have begun to sort out their internal employment situations, determine which employees are full-time employees, and change their labor contracts to labor contracts. Some companies set a change ratio of 10%. This plan will be piloted in Beijing, Shanghai, Guangzhou and Shenzhen in the near future.