Beijing has unveiled fresh rules on workers’ rights in the ride-hailing industry — including better pay and breaks — as officials tighten oversight of China’s embattled tech sector and gig economy.
The announcement comes on the heels of a wide-ranging regulatory clampdown on homegrown tech behemoths — including e-commerce titan Alibaba Group Holding Ltd (阿里巴巴) and ride-hailing giant Didi Chuxing (滴滴出行) — over issues including consumer rights, data security and monopolistic behavior.
Under new guidelines released by the Chinese Ministry of Transport, drivers at ride-hailing companies must not earn less than the local minimum wage and should be given access to social insurance.
Photo: AFP
They should also not be “induced to work overtime” by chalking up orders to meet targets, and companies must monitor employees’ working hours and labor intensity, the statement said.
It did not give specifics on what counted as overtime or adequate break times.
The rules could hit earnings for companies in the billion-dollar industry, which is a go-to service for many commuters in China’s densely populated cities.
“This is a precursor to stricter enforcement, but that enforcement was always coming,” said Kendra Schaefer, head of tech policy research at consultancy Trivium China.
The new guidelines added that drivers must have the requisite permits for ride-hailing work — something which Schaefer estimates as many as 40 percent currently do not have.
With fresh pressure for “strict enforcement” of these rules, companies will have to whittle out private-hire drivers who do not meet licensing requirements.
Recruiting drivers who have the right permits would likely be the “biggest pitfall,” because there are “simply are not enough drivers,” Schaefer said.
“I actually think where they are going to be hit the hardest in their bottom line is in a driver war,” she said.
China’s gig economy accounts for almost one-quarter of its work force: 200 million people are in “flexible employment,” government figures showed.
New York-listed Didi’s app dominates China’s ride-hailing market and claims to have more than 15 million drivers, with nearly 500 million users.
Didi has come under fire on multiple fronts with Chinese regulators reportedly asking executives last week to draw up a plan to delist from the US over data concerns.
The guidelines also came after a ramp-up in labor protections for food delivery workers announced in July.
Chinese President Xi Jinping (習近平) has this year embarked on a campaign of “common prosperity” designed to tackle wealth inequality and tighten oversight of business giants.
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