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Shares in Meituan fall as China ramps up rider protections

Shares in China's food delivery giant Meituan plunged 14 percent Monday after new rules were issued to protect hard-pressed drivers, fuelling investor concerns over rising employment costs.

Shares in Meituan fall as China ramps up rider protections

Shares in China's food delivery giant Meituan plunged 14 percent after new rules were issued to protect hard-pressed drivers AFP/GREG BAKER

BEIJING: Shares in China's food delivery giant Meituan plunged 14 per cent Monday (Jul 26) after new rules were issued to protect hard-pressed drivers, fuelling investor concerns over rising employment costs.

Under the new guidelines by China's market regulator, firms are to ensure workers' incomes are above minimum salary levels.

The new rules also say companies must "appropriately relax delivery time limits" in a notoriously frenetic delivery sector which is an artery of life in China's cities.

Companies should also have "reasonable" order volumes and guide delivery staff to abide by traffic rules, said the State Administration for Market Regulation.

Shares in Meituan - one of China's biggest delivery services - closed 14 per cent down in Hong Kong on Monday.

Food delivery platforms like Meituan and Alibaba's Ele.me have come under fire in recent months over their treatment of workers, with issues ranging from low pay to a lack of rights.

Chinese media previously reported that such apps gave riders impossible routes to follow when fulfilling orders, penalising them for late deliveries even when these were caused by customers.

Earlier in the year, President Xi Jinping also stressed protecting the interests of couriers and food delivery riders during a trip to the southern province of Guangxi.

The slide in shares is the latest blow to Meituan, which is already facing an antitrust probe as China takes aim at its tech giants.

Beijing has moved aggressively to loosen Big Tech's hold on the daily finances of consumers and -- analysts believe -- to curb the sector's growing influence on society by using anti-monopoly probes.

Source: AFP

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