Chinese Abandon Food Delivery Fearing Drivers Will Spread Virus
The deadly coronavirus is disrupting China’s enormous food-delivery networks.
(Bloomberg) --
The deadly coronavirus is disrupting China’s enormous food-delivery networks, complicating daily life for millions and straining businesses integral to its economy.
Over the last decade, the food-delivery industry became far more pervasive in China than in any other country, serving more than 500 million customers and employing three million delivery drivers. But as the virus death toll rises, those peripatetic workers, in trademark blue and yellow jackets, are being shunned as potential carriers of the disease.
That is rattling the $36 billion business and every slice of the economy it touches. Restaurants that rely on the services are moribund. Consumers are scrambling for alternatives.
“I’ve stopped ordering delivery food because the epidemic is really serious now and it freaks me out,” says 25-year-old Cathy Liu, who lives in Beijing and used to order in once or twice a week. “You don’t know the people who make the food, how well it’s protected in the delivery process. Especially those carriers, they are dangerous as they come in contact with a lot of people every day and that definitely increases the chance that they may be infected.”
Meituan Dianping and Alibaba Group Holding Ltd., the two biggest delivery companies, are racing to address the health concerns, not only to protect their businesses but also to help millions of citizens under government lockdown. School and business closures present a potential windfall -- if companies can reassure consumers. During the SARS scare of 2003, people got hooked ordering stuff online while being forced to stay home from public places.
But reports of sick couriers are turbocharging anxieties, amplified by concern that China’s censors minimize the dangers. In one story that ripped through social media, a driver made three dozen deliveries across the coastal city of Qingdao before his wife was officially diagnosed with the virus. In Shenzhen, local media reported an infected courier had worked for the previous 14 days while showing no symptoms.
Many building complexes have halted access to food delivery drivers, and some communities have restricted entry to all outsiders. Restaurants say orders are in free fall and consumers say delivery fees have increased, sometimes double what they were before the outbreak.
Meituan and Alibaba’s Ele.me, which command 90% of the market, declined to comment on the health of individual workers. But they highlighted measures they’re taking to protect drivers and customers. Meituan introduced a service across 184 cities so food is dropped at a secure pickup station and people have no direct contact with deliverymen. Ele.me has done the same in select cities. Both companies are asking riders to wear masks, regularly disinfect their delivery boxes and take their temperatures daily.
In the disease’s epicenter of Wuhan, where 11 million residents have been quarantined, Ele.me said it’s providing subsidies for drivers, while reducing restaurant commission rates, according to a Weibo post. Complicating the situation is that delivery staff for both companies are usually contractors, rather than employees.
The virus will hurt Meituan and Ele.me in the short term as restaurants stay closed for a few weeks after the Lunar New Year holiday and consumers get used to so-called contactless delivery, says Bernstein internet analyst David Dai. However, in the “mid- to long-term, the epidemic will accelerate the penetration of food delivery,” he said. Shares of Alibaba and Meituan have sunk 7% and 13% respectively since Jan. 15, alongside a selloff in Chinese stocks.
Coco Gao, a 24-year-old Zhejiang native and Beijing transplant made her way home to a province that reported more than 700 confirmed cases. Now she can’t walk in or out of her building complex without having her temperature checked by a guard. Recently, designated food delivery drop-off spots have cropped up with “No touch” signs.
“These are good for both the drivers and customers alike,” said Gao. “For those who are isolated at home, takeout is particularly important. But this also reflects a sense of economic class hierarchy that the rich are at home and the service staff have to sacrifice their health in order to earn money.”
Indeed, a 27-year-old Beijing driver from Gansu who delivers food for Meituan said worries over contracting the virus are making him reconsider his job altogether. “I thought of quitting but I need the money,” said the man, who asked to be identified by his surname Shi, as he dropped off a rice and pork dish at an apartment complex in Beijing while wearing a pink surgical mask.
Shi said he bought the mask on his own because those provided by Meituan were of poor quality.
As Beijing’s massive gated apartment complexes have begun blocking their entrances to delivery drivers, he says it’s getting harder to know where he can and can’t go. That could mean an increase in the time it takes him to deliver and a potential pay cut if he doesn’t work quickly enough.
It also means rising complaints from customers who aren’t aware of the new restrictions. “They ask us to come up, but we have no way of doing so,” he said.
Conditions were already tough for China’s delivery drivers, most of whom are young men from the countryside without university degrees. Drivers take in less than $1 an order and make an average 25 deliveries a day, up from 17 three years ago. As they rush to get takeout boxes to customers on time, safety is an issue beyond the virus. In Shanghai, authorities said delivery drivers accounted for 80% of road accidents in the first half of last year.
Any delay in delivery could end up dinging drivers in the future due to algorithms the companies use to maximize delivery speeds, “so they are doubly under pressure to work in these conditions.” said Geoffrey Crothall, director of communications at China Labor Bulletin, an advocacy group that tracks labor conditions within industries across the country.
The delivery driver scare has already hit China’s restaurants, where fears of contracting the virus coupled with an extended new year’s holiday have turned usually bustling outlets dark.
At theFive restaurant in Beijing’s Wangfujing district, one eatery specializing in Henan cuisine reduced its opening hours by half as walk-in customers fell by about 90%, said Wang Liang, a 26-year old waiter. He said delivery orders have dropped precipitously as people think it’s safer to buy groceries and cook themselves.
“I really can’t say if things will improve,” Wang said, “The spread of the virus has been pretty quick.”
--With assistance from Lulu Yilun Chen and Livia Yap.
To contact the reporters on this story: Shelly Banjo in Hong Kong at sbanjo@bloomberg.net;Claire Che in Beijing at yche16@bloomberg.net;Kari Lindberg in Hong Kong at klindberg13@bloomberg.net;Colum Murphy in Beijing at cmurphy270@bloomberg.net
To contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Edwin Chan
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