Chinese delivery giants Meituan, Ele.me pledge to not force drivers to register as independent businesss

© Reuters.

SHANGHAI (Reuters) - China's online food delivery giants Meituan and Ele.me both said this week they will not force couriers who do work for them to register as independent businesses, a bone of contention amid ongoing scrutiny of the food delivery sector.

The promise comes as part of a broader push from regulators to improve conditions for 'gig-economy' workers, and during ongoing public scrutiny towards tech companies treatment of said drivers.

In August, several Chinese regulatory bodies met with a number of Chinese food delivery companies to call for better labour safeguards.

Many drivers for food delivery or ride-hailing apps are hired indirectly by the platform and do not receive basic social or medical insurance https://www.reuters.com/world/china/chinese-regulators-meet-with-delivery-firms-call-stronger-labour-rights-2021-08-07.

This past week, a social media account covering labour law published an article alleging some drivers working for Meituan and Ele.me were operating as individual businesses, as opposed to employees of the platform company or a third-party company, thereby reducing the platform company's legal obligations to the driver. The piece spread widely across China's internet.

In a social media post published late on Tuesday evening, Meituan wrote that, "Drivers are important partners of Meituan. When it comes to protecting drivers' labour rights, we must make more improvements and need to do better."

The company said that following the publication of regulations targeting food delivery workers last July, it had formed a work group to examine its employment practices. It said this month it issued a document to over 1,000 delivery partners and held a video conference stating it prohibits forcing couriers to register as independent businesses.

The company added that it aimed to improve its treatment of riders in aspects such as income, social security, and health and safety. On Monday, Meituan said it would change its algorithm be more accommodating towards its drivers when facing tight delivery times.

On Wednesday morning, Ele.me published a statement also pledging not to force drivers to register as independent businesses.