The Human Costs of China’s Gig Economy

Beneath the surface of convenience and fast deliveries lies a web of human costs, including physical and mental health struggles, financial insecurity, and a growing skills gap.

China’s bustling metropolises are a testament to a society on the move. Convenience reigns supreme, fuelled by a thriving food delivery ecosystem powered by apps like Meituan and Ele.me. However, beneath the surface of rapid service lies a dark undercurrent—the hidden human cost borne by millions of delivery drivers racing against the clock.

The efficiency “rat race”

China has the world’s largest gig economy, with over 200 million participants—more than a hundred times the 1.8 million gig workers in Australia—including 12 million food delivery workers. Speed is crucial in this sector, with platforms using algorithmic optimisation to reduce delivery times.

In 2019, the average delivery time for food orders in China decreased by 25 percent compared to three years prior. Driven by artificial intelligence (AI)-powered dispatch systems and delivery assistants that automate every step of the process, what used to take 40 minutes three years ago now takes merely 30.

This relentless pursuit of speed and efficiency comes at a human cost. Pay structures incentivise faster deliveries, creating a “rat race” that pushes drivers to their physical and mental limits. They navigate crowded streets at breakneck speeds, often disregarding traffic regulations to meet tight deadlines. The consequences are dire. In Shanghai alone, a delivery driver is involved in an accident every 2.5 days on average.

The touted flexibility of gig work becomes a cruel illusion when viewed through the lens of financial insecurity and exhaustion. Performance-based pay and surge pricing create unpredictable income streams, leaving drivers in stress and poverty. The constant fear of penalties for late deliveries and missed targets adds another layer of anxiety. Platform profits soar while drivers struggle to make ends meet, exposing the gig sector’s fundamental disparity and injustice.

Food delivery jobs initially attracted migrant workers with limited skills seeking entry-level opportunities. The promise of high earnings lured them to big cities. However, migrants with limited skills are not the only ones attracted to such jobs. China’s high youth unemployment rate has pushed many well-educated graduates towards this sector. Additionally, middle-aged workers displaced by economic downturns or automation increasingly turn to the gig economy. This influx reflects the growing desperation among workers with limited job options outside this sector.

Most of these workers are men, often viewing delivery as a temporary, necessary job compromise until a better opportunity arises. However, many get stuck for extended periods due to a lack of advancement opportunities within the delivery ecosystem or transition to other sectors.

In turn, the growing pool of workers has intensified competition. Platforms often blacklist drivers who do not meet speed targets or customer satisfaction scores. This ruthless efficiency and optimisation breed a cutthroat environment where drivers are pitted against each other.

A call for ethical innovation

As AI advances, the future of food delivery gig work becomes increasingly uncertain. Algorithms prioritise efficiency and corporate profits over human welfare, raising concerns about potential job displacement. Platforms are already testing automation technologies like drones and self-driving vehicles, hinting at a future where human drivers become obsolete.

Delivery work requires minimal skills, but automation renders even those obsolete. Millions who rely on this sector for income could be left behind without the ability to adapt to a rapidly changing job market. The existing social safety net might not suffice to support them, raising concerns about a widening social divide. The reality for many gig economy workers often involves increased inequality, weakened job security, and devaluing human dignity.

Given the financial stakes and the competing interests of workers and firms, policymakers must strike a balance by fostering innovation while safeguarding worker rights. This includes implementing regulations that guarantee fair pay and enforce safety standards.

Tech companies have a responsibility to prioritise worker well-being. Many such companies hold enormous power, facilitated by state laws (or lack thereof), individuals’ data, and intellectual labour. Algorithms should be designed with humans in mind. While disruption is inevitable and change can be beneficial, technological advancements should seek to support, not exploit, workers.

The gig economy’s precarity is a harbinger of broader shifts in the labour market. The linear, progressive career path, once a cornerstone of professional life, is increasingly becoming obsolete. Instead, a patchwork of short-term contracts, freelance work, and project-based engagements is emerging as the new norm. Research reveals that millennials (born 1981-1996) now have an average job tenure of just 2.8 years, compared to 4.3 years for Gen X (born 1965-1980) and 8.0 years for Baby Boomers (born 1946-1964). This “gigification” of work offers flexibility and autonomy but presents significant challenges regarding job security, income stability, and access to benefits.

As technology advances, automation and AI will accelerate this trend. Routine tasks will be increasingly performed by machines, leaving humans to focus on higher-order cognitive functions and creative endeavours. To thrive in this new world, individuals will need to be adaptable, possess a diverse skill set, and be entrepreneurial in their approach to career development.

Mitigating the impacts of technological unemployment

Addressing technological unemployment requires a multifaceted approach and a shared challenge. Prioritising education and reskilling equips workers with the skills needed for emerging jobs. Robust social safety nets, including unemployment benefits and income support, are essential for protecting displaced workers. Universal basic income (UBI) is gaining attention as a potential solution, offering a guaranteed income floor to ensure financial security in a volatile job market. UBI could help bridge the gap during job transitions and support a more resilient and equitable labour market by providing a basic income.

Likewise, stimulating job creation in sectors less susceptible to automation and fostering entrepreneurship is essential for economic growth. Government policies should prioritise thorough technology assessments to understand the impacts of new advancements on jobs and industries, ensuring that transitions in the labour market are well-managed. Establishing clear ethical guidelines is crucial to protect workers’ rights and ensure technology is used responsibly and fairly. Additionally, fostering collaboration between governments, businesses, and educational institutions will be vital in developing effective training programs and aligning technological progress with societal goals. By integrating these strategies, societies can better navigate the challenges of rapid technological advancements and create a more resilient and inclusive economy.

Dr Christian Yao, a senior lecturer at the Victoria University of Wellington in New Zealand, is a renowned ‘China expert’ on unemployed youths’ career development and the gig economy. His research provides crucial insights into how technology and socio-economic factors shape the future of work in China. Dr Yao’s expertise has been featured by major media outlets such as CNN, BBC, and The Conversation, where he engages in discussions on the human impact of digital innovation in one of the world’s most rapidly evolving economies.

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