Platform wars: How competition could reshape China’s gig worker economy

Following the 5 July frenzy, regulators summoned Meituan, JD, and Ele.me, urging them to scale back their rivalry and engage in ‘rational competition’. But in China’s platform economy, this refrain is hardly new and no longer surprising.

The Chinese government has spoken repeatedly about curbing unfair competition, algorithmic overreach, and ‘involution’ (excessive competitive practices). Yet, in practice, some of the very platforms seen as driving involution are being quietly tolerated, if not selectively enabled.

Why is this? Because at this stage of the economic cycle, these platforms are not just commercial actors but performing de facto public functions; hurting these platforms risks doing more harm than good.

During the Covid lockdowns, Meituan’s riders became the cities’ lifeline, delivering food and medicine when traditional logistics ground to a halt; DiDi redirected over 160,000 drivers into emergency medical transport. More recently the gig economy has provided an important safety valve to generate employment in a China grappling with the aftermath of a burst property bubble. 

Essentially, China’s leading platforms are no longer just consumer tech companies – they’ve become quasi-infrastructure – yet operate with private market incentives. This structural mismatch means platforms hold enormous systemic influence without corresponding accountability. 

In the past decade, China’s digital economy has grown dramatically, driven by improved connectivity and technological innovation. The expansion of ecommerce, in particular, has fuelled significant growth in the gig economy. Today, it is estimated that around 200 million workers perform flexible, short-term jobs arranged through digital platforms, such as delivery riders for the likes of Meituan, Ele.me and JD and couriers for ZTO Express and YTO Express². 

Gig work is not a side-effect of the digital economy, it is the physical labour backbone of it. Despite its vital role, the gig economy is complex. Although it offers flexibility and opportunities, it also presents several challenges such as income instability and lack of labour protections. 

Media narratives often label China’s gig jobs as low-paid and exploitative. However, the data tell a more nuanced story. 

An official survey of blue-collar employment in 2024 disclosed that in hourly terms, couriers and food delivery riders earn ¥28-36 (£2.88-£3.70), outpacing traditional roles like factory work (¥25; £2.60), security (¥20; £2.06), or sanitation (¥19; £1.96). 

In fact, platform economy workers now earn 1.26x the average of traditional industries, with delivery riders earning 1.4x that of construction workers³. 

Again, contrary to popular belief, job satisfaction among China’s gig workers is comparatively high. The blue-collar employment survey shows over 61.3% of people in digitally enabled roles (eg, food delivery, ride-hailing, freight) are satisfied with their pay.

On 5 July, one Meituan delivery driver reportedly worked 18 hours straight in 40°C heat, completing 127 orders and earning ¥1,700 (£175). He told reporters he didn’t want to rest – he was happy, because he saw it as a rare chance to make money⁴.

However, there are some negative aspects to gig work. In China’s platform economy, algorithmic systems are not merely operational tools but are the de facto managers of gig labour – assigning orders, setting timelines, and determining incentive structures.

This enables high logistical efficiency, but can also introduce problems. For delivery drivers, tight delivery windows, system flaws like poor routing and penalties for order rejection, and customer ratings create a ‘rush or starve’ loop, which directly incentivises speeding, red-light running, and unsafe driving. 

At the heart of this issue is income pressure; order fees have steadily declined amid platform price wars, forcing riders to increase delivery volumes to maintain earnings. Clearly, the underlying system rewards speed, density, and responsiveness, not safety or stability.

Another key issue is that the vast majority of delivery riders, ride-hailing drivers, and other gig workers are not formal employees. Instead, they operate under loosely defined ‘service agreements’ signed with platform intermediaries, which by design excludes them from statutory labour protections. 

Most riders work for a patchwork of third-party labour agencies, which often operate through local delivery hubs, where communication is managed via site managers rather than direct employer interaction. When disputes arise, riders frequently find themselves with no clear counterparty with which to engage. 

The flexible nature of gig work also presents a challenge in relation to social insurance. The first obstacle is China’s complex household registration (hukou) system. In many large cities, non-local migrant workers are only eligible for limited or lower-tier urban-rural resident schemes tied to their hometowns, even if they live and work permanently in metropolitan areas.

Crucially, these schemes often offer minimal protection against the types of work-related risks gig workers face in urban delivery jobs, leaving them structurally disadvantaged when it comes to social protection.

In addition, many workers remain reluctant to participate due to the transient nature of gig work. Mandatory social insurance contributions could reduce a typical rider’s take-home income by 20%-30% in cities like Beijing – for riders earning ¥6,000/month, that would be a material cut.

Arguably, what most gig workers urgently need is not a pension in 30 years’ time, but basic protection against real-time risks – occupational injury protection.

When JD.com, one of China’s largest e-commerce players, entered the food delivery market earlier this year, it didn’t just start a price war it also disrupted the employment landscape. JD.com arrived with ¥10 billion (£1 billion) in subsidies and a headline promise: to offer full social insurance coverage to all newly registered full-time riders, and medical/accident coverage for part-time workers⁵.

Within hours, Meituan responded with a statement that it was expanding social insurance to full-time and stable part-time riders starting in the second quarter of 2025 – a move it has long resisted. 

Apart from its insurance commitments, JD has introduced measures such as a take-rate cap at 5% and enhanced food safety protocols such as banning ‘dark kitchens’ (facilities that operate solely for takeaway orders). These efforts suggest a broader ambition to shape how platform economies are perceived – both by regulators and consumers. 

In our view, the gig economy in China is neither the dystopia its critics suggest, nor the utopia its champions claim. It is an evolving, negotiated reality shaped by economic limits, institutional constraints, and policy trade-offs. 

As many parts of the Chinese economy are experiencing, structural reforms inevitably bring short-term pain – but the pain is part of the necessary transition.

Compared to other sectors, changes in China’s gig economy may be driven more by bottom-up, corporate initiatives than by top-down policy decisions. Nevertheless, some of the changes companies such as JD are making to their worker offerings may be tantamount to structural change that could, over time, transform the platform economy as well as potentially delivering a competitive advantage.

It is in areas such as providing accident insurance, transparent payment systems and realistic delivery algorithms that an institutional investor like M&G can look to engage with related companies to incrementally shape the future of the gig economy in China.
 

¹ Malay Mail and yahoo!news, ‘Meituan hits record 120 million daily orders on July 5 amid China’s instant delivery price war’, (malaysisa.news.yahoo.com), 6 July 2025.
² Benelux Chamber of Commerce in China, ‘China’s Gig Economy: Key Data and Insights’, (shanghai.bencham.org), August 2024.
³ China New Employment Form Research Center, ‘2024 China Blue-Collar Employment Research Report’, (sohu.com) April 2025.
⁴ Reported in a video posted on qq.com, July 2025.
⁵ Cls.cn, February 2025.

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