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With the gig economy boom reflecting shifts in China’s economy, NewsChina investigates the growing power that platforms wield over workers, reforms underway and the market forces at play

By Jiang Zhiyu Updated Jul.1

A professional housekeeper organizes shoes in a client’s home, Wuhan, Hubei Province, January 13

A food delivery rider en route, Quanzhou, Fujian Province, March 18

I’d rather deliver takeout than work in a factory,” Zhang Linzhou said. After earning a degree in civil engineering, the 20-something worked different jobs for two years before hopping onto a delivery platform.  

Though the hours are long and hard, Zhang said a friend, who works in a factory, reminds him it could be worse with stories of his experience. “There’s no time to rest, no dignity,” Zhang said. “Factory workers have to ask permission to go to the bathroom, and they are only allowed two bathroom breaks a day.”  

“Working at a factory is like a prison sentence, so I wouldn’t even consider it if I was desperate,” Zhang said. The platform economy is attracting more of China’s workforce than ever. Wen Xiaoyi, director of Department of Labor Relations at the China University of Labor Relations in Beijing, told NewsChina that behind the trend is a shift in labor resources from traditional manufacturing to service industries, especially in the platform industry. “The gig economy used to be a marginal secondary labor market. Now it’s part of the primary labor market, even becoming a major channel for employment.”  

There are about 200 million gig workers in China, according to the National Bureau of Statistics. Gig work covers traditional industries like housekeeping and newer app-based services such as takeout delivery, ride hailing, livestreaming and “game boosting” – when a highly skilled gamer logs into another player’s account to boost their ranking in a particular game for a fee.  

The rise of the gig economy not only reflects changes in China’s economic and job landscape, but also corporate cutbacks and a greater desire for flexible hours among younger workers. 
Aiming to promote “flexible employment” and part-time work, the 14th Five-Year Plan for the Development of the Digital Economy issued in January by the State Council, China’s cabinet, encourages people to find work and start businesses through social media, knowledge sharing and other online platforms. Some experts laud the platform economy as a solution to job creation for lower-income people that also reduces costs and increases efficiency for businesses. 

However, the flex most gigs promise is usually less than advertised, as algorithm-based platforms can exert even more control over workers’ time than traditional employment. Also, gig workers lack insurance, face increased job instability and are more exposed to economic risks. In July 2021, a ministerial-level document was released to strengthen the rights and interests of gig workers, such as requiring platforms to purchase workers’ compensation and insurance plans. 

A designated driver (left) and his son (right) finish work late night in Chongqing, June 13, 2020. These drivers help people drive their vehicles home if they exceed the limit for drunk driving

A vendor sells clothes on a livestreaming platform, Binzhou, Shandong Province, June 28, 2020

Emerging Market 
According to the National Bureau of Statistics, the proportion of migrant workers in the secondary industry, mainly manufacturing and construction, decreased from 56.8 percent in 2013 to 48.1 percent in 2020, while the proportion in the tertiary industry, which includes services both online and offline, and real estate sectors, increased from 42.6 percent in 2013 to 51.5 percent in 2020.  

“The rise of flexible employment has a lot to do with the transformation of China’s labor-industrial structure,” Sun Ping, an assistant researcher with the Chinese Academy of Social Sciences’ Institute of Journalism and Communication, told NewsChina. As factories and labor-intensive industries relocate to Southeast Asia, India and Africa, China’s workers are moving to other industries, Sun said.  

According to Zeng Xiangquan, director of the Employment Research Institute at the Renmin University of China in Beijing, using the term “flexible employment” to describe the gig economy is misleading. “Flexibility can refer to either time or place, such as working remotely. But now the media, as well as some government documents, use the term flexible employment to describe informal employment or what the International Labor Organization refers to as non-standard employment,” Zeng told NewsChina. “If we use these latter definitions, the number of gig workers in China is significantly more than 200 million.”  

Wen Xiaoyi believes that transitional stages of labor-industrial reform inevitably affect traditional employment. “The gig economy acts like an ‘employment reservoir,’ a supplement to formal employment that can support the job market when employment in the real economy is not optimistic,” Wen said. “From this perspective, national policies should support the development of flexible employment.”  

Another factor driving China’s gig economy is businesses cutting labor costs to maximize profits, Wen said. After the 2008 financial crisis, quantitative easing led to inflation, which attracted large amounts of hot money to internet-based industries. This meant investment from international financial capital motivated businesses to adopt asset-light approaches, which involved outsourcing workers through subcontractors and cooperating with platforms, Sun Ping said.  

Platforms also make getting part-time work easier. According to data released by delivery app Meituan, the number of riders on its platform increased from 2.2 million in 2017 to 5.27 million in 2021.  

The trend goes beyond food delivery and ride hailing. Liu Fen, in her 40s, has worked with a housekeeping app for four years. She works 10 hours a day, five days a week for 43 yuan (US$4.4) an hour. According to an industry survey by Liang Meng, an associate professor at the School of Humanities and Development at China Agricultural University in Beijing, internet platforms improve professionalism and specialization in their trades. “Platform training and management can help to improve workers’ expertise in housekeeping. As a result, it improves the public image of housekeepers, while increasing awareness of the social value of housekeeping professionals and overall respect for domestic work,” Liang said.  

Housekeeping apps have clear advantages over traditional housekeeping firms in terms of volume, which makes recruitment easier. Liang said that internet-based housekeeping services allow the labor market to benefit from capital investments directly.  

Zeng acknowledged the issues that come along with China’s high proportion of flexible employment. Many join the gig economy reluctantly as formal employment becomes increasingly scarce. “In the long term, all kinds of ‘flexible employment’ including the platform economy may face issues of stability, sustainability, career development and social security, which requires more in-depth research to find solutions,” Zeng said.  

Like many others, Zhang Linzhou chose delivery because of the flexibility and freedom of the job. Although platform management is very strict and the algorithm constantly pushes riders to be faster, Zhang said he can handle the challenges. However, he only takes two days off a month and cannot take breaks while on the job, because he must compete with other riders for orders. 

Legal Obstacles 
In his research, Sun Ping found that platforms have ways to keep riders from leaving. Since platforms always need riders, they reward those who commit to fixed hours, which further reduces the job’s promised flexibility. The algorithm encourages riders to compete – the more orders a rider completes, the higher the guaranteed fee per order. “The platform gamifies their incentives,” Sun said. “From 2018 to 2021, the total work hours per delivery rider on the platform grew longer and longer.”  

Housekeeping platforms have similarly rigged their systems. Liu Fen said during the Chinese New Year holiday when she would get four orders a day, the platform only gave her 30 minutes to reach the address. Liu told the reporter that she had to skip lunches. The app tracks her through her phone, and automatically fines her 10 yuan (US$1.5) for arriving late to appointments and up to 50 yuan (US$7.6) for canceling.  

Wen said the flexibility gigs offer can be a poor trade-off. “People with high-tech skills can earn enough money for a year by freelancing for two or three months,” Wen said. “But lower-skilled workers such as delivery riders and housekeepers have to work at least six days a week to guarantee their income.”  

Legal issues are another problem. “The platform gig economy is a new and complex form of employment with relatively little regulation,” Yao Yanjiao, a lawyer with the Beijing Zhicheng Legal Aid and Research Center for Migrant Workers, told NewsChina. “This has led to unclear standards for identifying labor relations and the rights and responsibilities of platforms,” Yao said, referring to how platforms do not sign contracts with riders directly but through an intermediary or a third-party agency.  

Yao said third-party contractors act as a buffer between riders and platforms, which makes it nearly impossible for them to voice their woes with platforms directly.  

But changes are happening. In July 2021, the Ministry of Human Resources and Social Security and eight other departments issued new guidelines that made local governments responsible for encouraging platform enterprises to sign written agreements with workers and establish rights and obligations for enterprises and workers.  

The guidelines also call to strengthen workers’ compensation and organize pilot programs for gig workers in transport, food delivery, courier and city freight services. The guideline encourages platform enterprises to purchase personal accident insurance and employer liability insurance, which insiders said many platforms are now doing. Yao Yanjiao suggested platforms should make their algorithm-based systems worker friendly.  

Internet and market authorities issued regulations in effect since March 1 that state: “If algorithm recommendation service providers provide work dispatch services to workers, they shall protect the legitimate rights and interests of workers such as labor remuneration, rest and vacation, and establish and improve relevant algorithms such as order distribution, remuneration composition and payment, work hours, rewards and fines.” Wen suggested that gig workers should also be represented in China’s trade union system so they can negotiate with platforms directly.  

But experts said sectors such as housekeeping need more government support, especially as China relaxes its restrictions on childbirth and faces an aging population. “The challenges generated by gig economy including housekeepers is a global issue,” Liang said.  

Many countries such as Germany, Liang said, have integrated these trades into its government employment system, which helps standardize the industry and raises the social status of working in domestic services.  

“Either we need to set up legislation to clarify labor relations or [the government] should provide support for these occupations,” Liang said.

A window cleaner works in a community, Jinan, East China’s Shandong Province, September 2, 2021