How did millions of take-away riders get stripped of their employment relationship when the US delegation was hungry？

Editor’s Note: This article comes from the column of Radar Finance in Entrepreneurship State. Author: Zhang Kai Jing, Editor: Deep Sea, Source: Turtles.

Thousands of takeaway riders are not only trapped in the system, but also trapped in the employment relationship.

Recently, Beijing Zhicheng Legal Aid and Research Center for Migrant Workers released a 57-page Legal Research Report on the Employment Mode of Takeaway Platform (hereinafter referred to as the Report), which revealed the complex and rapid evolution of the employment mode of Takeaway Platform in the past 10 years, and gradually developed into 3 categories and 8 main modes.

Through the change of mode, the take-away platform has successfully stripped away the labor costs and employment risks brought by riders, and separated them layer by layer. Through a series of superficial legal arrangements and cooperation with distributors/crowdsourcing service companies and flexible employment platforms, the labor relations of riders have been broken step by step, thus quietly pushing them to the edge of rights protection.

Nowadays, the legal isolation effect between the take-away platform and the distributor/crowdsourcing service company is remarkable, and the recognition rate of the take-away platform is basically controlled within 1%.

Shao Moumou has been a "hungry" special rider since October 2017, and is engaged in full-time take-away delivery in Beijing. In the middle of the night of April 2019, Shao Moumou had just delivered the last order. Just as he was riding an electric car on the side of the road, waiting for the backstage approval to get off work at 12 o’clock, a large truck with high beam lights came on. Subsequently, Shao Moumou fell into the big pit in front of the road, causing serious injuries.

Because there was no money for medical treatment in Beijing, Shao Moumou returned to his hometown for treatment and support, and confirmed that the accident had constituted a level 9 disability after half a year. At this point, Shao hopes to determine the work-related injury, but the search for employers has become a major problem.

After entrusting Zhicheng Center to seek legal aid, Shao Moumou quickly won the labor arbitration in Beijing and successfully confirmed the labor relationship with Dias Company, which belongs to the site. But a week later, Shao Moumou received the news that Dias Company filed a lawsuit against him in Chongqing, where it was registered.

After the change of the litigation place, the litigation result has also changed. In November, 2020 and May, 2021, Shao Moumou lost the first trial and the second trial in succession, despite the help of Zhicheng Sichuan Legal Aid Station for Migrant Workers, and the hope of obtaining compensation for work-related injuries was basically dashed. But Zhicheng did not give up.

The day before Zhicheng published the Report, the fifth legal procedure in this case had just started. Because Diaz Company once said in Chongqing that it had outsourced the relevant distribution business to Taichang Company, and Shao Moumou’s salary has been paid by Taichang Company, the current prosecution object of Zhicheng is Taichang, and it is jointly and severally liable for being hungry.

"When the case hit the middle, we were once desperate because we couldn’t find an employer, which just shows the complexity and seriousness of the system. Workers have been injured for more than two years, and legal proceedings have gone on for more than one year. Is it necessary to pay such a huge price after the rights and interests of workers are hurt? " Tong Lihua, director of Beijing Zhicheng Law Firm and member of the legal expert database of Beijing Municipal Committee, said.

Yan Lihua also said that during the whole process, the platform did not see any reflection, did not express any apologies to the injured workers, and did not have any opinions on this process and how many workers solved related problems. Even proposed to lose money, but if you are hungry, the platform doesn’t want to sign any words, just want to take money to sign a confidentiality agreement and solve the case.

As a professional legal aid institution for migrant workers, Zhicheng Center realizes that Shao’s hardship is a concrete epitome of tens of millions of take-away riders, which is essentially caused by the complex form of the employment mode of the take-away platform in reality, but these complicated legal relationships hidden in the take-away system have not been fully revealed and discussed so far.

In order to fully understand the employment mode of take-away platform and related problems, Beijing Zhicheng Legal Aid and Research Center for Migrant Workers conducted field visits for nearly three months, had in-depth exchanges with industry experts, and with the help of more than 50 volunteers with professional backgrounds such as law, economics and computer science, formulated a Report containing 1,907 valid judgments.

Radar Finance has learned that the Report has made a detailed analysis of the three categories and eight modes of employment of take-away platforms in the past decade.

Before the take-away platform appeared, restaurants usually hired their own employees to deliver; After the appearance of the take-away platform, the take-away staff turned to be recruited by the platform. In the early stage of the scale of the take-away market, the platform will still attract a large number of laborers to flood into the distribution market with generous treatment. At this point, a formal labor contract relationship will still be established directly between the takeaway and the platform.

At this stage, the platform may also adopt the mode of labor dispatch, that is, a labor dispatch company is added between the rider and the platform. However, China’s "Labor Contract Law" guarantees that the labor dispatching unit and the employing unit shall bear joint and several liability for compensation when the workers are damaged.

In the middle stage of the development of take-away platforms, the cost of transportation capacity has increased greatly, but the platforms have been "rolled up" badly, so optimizing the transportation capacity structure has become the first choice for major platforms, and crowdsourcing mode has emerged.

However, the court almost never finds that crowdsourcing riders have a labor relationship with the take-away platform, even when the take-away platform directly signs a cooperation agreement with crowdsourcing riders. Because crowdsourcing riders have a very high degree of freedom, the use and management of the platform is very different from the employment management in the labor law.

After the take-away platform cooperates with crowdsourcing service companies and further "legally isolates" itself from crowdsourcing riders, it is even more impossible for the court to identify the labor relationship between the platform and crowdsourcing riders. Only in a few scenes, the court will find that there is a labor relationship between crowdsourcing service company and crowdsourcing rider, such as the rider engaged in full-time distribution on a single take-away platform, and the scene caused serious damage.

It is worth mentioning that the ability of these crowdsourcing service companies to resist risks is open to question. One of the crowdsourcing service companies of Hummingbird crowdsourcing has a registered capital of only 50,000 yuan, which has not been paid in full. In the first half of 2021, it was listed as an executor of dishonesty twice.

After the emergence of crowdsourcing, the "regular army" of the platform was also outsourced to distributors, but a large number of distributors required riders to sign contract agreements, cooperation agreements and part-time agreements during the entry process, which greatly affected the identification of labor relations and the protection of rights and interests of escort riders. At the same time, the existence of the distributor also makes the complaint that the special delivery rider wants the take-away platform to bear the responsibility of the employer end in failure.

On this basis, some distributors subcontract all or part of their distribution business to other companies or even individuals, forming a complex outsourcing network. This makes the takeaway platform clear the legal relationship with the special rider.

What Shao Moumou encountered was the network outsourcing model after multi-layer evolution. After a series of moves, the rider’s labor relationship has been completely dismembered, and it is increasingly difficult for the court to determine the employer in judicial practice.

However, this is not the ultimate form of the evolution of employment mode. In recent reports, many special riders have been registered as individual industrial and commercial households, which directly changes the employment relationship between riders and distributors into the equal cooperation relationship between riders and flexible employment platforms and distributors, and the platform is almost impossible to be recognized as an employer.

More than 1900 judgments have also proved the above evolution. According to the statistics of the Report, among the 1,907 valid judgments, there were 1,719 cases involving the US delegation and being hungry, including more than 1,500 cases involving exclusive riders and less than 200 cases involving crowdsourcing riders.

The first condition for the protection of the labor rights and interests of the rider is to confirm the labor relationship with the employer. At first, when the take-out platform was self-employed, the rate of the rider’s recognition of labor could reach 100%. When the take-out platform outsourced the business to a first-class distributor, the rate of the rider’s recognition of labor dropped to 81.93%. When the distributor outsourced the business again, the rate of the rider’s recognition of labor further dropped to 47.46%.

Among them, there is the problem of identifying labor relations and objects. After the take-away platform changed from self-management to outsourcing, the probability of being identified as an employer dropped sharply from 100% to 0.32%, and it dropped to 0 when it was in the mode of individual industrial and commercial households. The distributor also successfully reduced the court’s recognition rate from 81.93% to 47.46% and 58.62% through outsourcing and individual industrial and commercial households.

In infringement cases, almost all the employer’s responsibilities that the take-away platform had to bear were transferred to the distributor/crowdsourcing service company, which was reduced from 100% of the platform’s self-operated and labor dispatch to less than 15%.

Based on this, the Report puts forward several major challenges of the take-away employment mode, namely, the cooperative employment mode artificially breaks the labor relationship, the rights and responsibilities of the take-away platform are not unified, the distributor market is fragile and gradually distorted, the protection of rider’s labor data and personal information is not in place, and the crowdsourcing mode changes from flexible employment to sticky employment.

Regarding the problems shown in the Report, Tong Lihua believes that the labor contract law and social insurance law should be revised as soon as possible, and the main responsibility of platform enterprises should be clarified.

"The platform manages and supervises the riders in real time through algorithms and digitalization, and has mastered all the data and enjoyed the greatest benefits. But now the platform throws all the main responsibilities to others, which is inappropriate. I agree that the platform will assign responsibilities to other cooperative companies through agreements, but in this process, the platform still has to bear the main responsibility. What’s the point of doing some so-called public welfare while evading and shirking the responsibility of labor and employment that you should bear? "

Zhicheng pointed out that the take-away platform should ensure that the special riders establish formal labor relations, and set up qualification requirements and access thresholds for cooperative companies. You can refer to the regulations of the construction industry and prohibit the cooperative company from subcontracting or outsourcing the main business part.

Tong Lihua also suggested that the state carry out special governance to promote enterprises to improve the reform of the employment system.

Specifically, we can conduct a comprehensive survey of distributors in the market, or take joint investigation actions against the flexible employment market to strengthen the supervision of the statutory obligations of employers and the registration and audit mechanism of individual industrial and commercial households.

In addition, Tong Lihua also advocated that more organizations should join the team to help workers defend their rights. "Trade unions can promote participation in relevant law enforcement work, and we also need more professional public service organizations to safeguard the rights and interests of workers."

Yu Shaoxiang, an expert on social security policy and chief researcher of innovation engineering at the Institute of Social Development Strategy of China Academy of Social Sciences, pointed out that the Report is solid and its conclusions and suggestions are operable. In the next step, we can further study which legal provisions need to be revised and how to amend them, so as to achieve better results.

Radar Finance noted that following July, the General Administration of Market Supervision, the National Network Information Office, the National Development and Reform Commission and other seven departments jointly issued the Guiding Opinions on Implementing the Responsibility of Online Catering Platforms and Effectively Safeguarding the Rights and Interests of Take-away Food Delivery Workers, on September 10, the Ministry of Human Resources and Social Security and the All-China Federation of Trade Unions and other four departments interviewed 10 platforms, including Meituan, Hungry and Didi, with the guidance platform as the main content of how to protect the rights and interests of workers.

Radar Finance will continue to pay attention to whether the employment mode that separates layers and gradually strips off platform risks will actually return to the route of protecting workers’ rights and interests, or will continue to evolve into new "variants".

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