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Migrant Workers in the Digital Market: China’s Platform Economy

 

6 Jun. 2019

By Hong Yu Liu

 

The Platform Economy in China

 

In 2015, Premier of the People’s Republic of China (PRC, hereafter China) Li Keqiang unveiled the ‘Internet Plus’ policy to include e-commerce as ‘a new engine for economic growth’ (GOV.CN, 2015). The platform economy in China is surging due to the development of computing power and information communication technologies (ICT) in recent years. In 2016, the transaction volume of the e-commerce industry in China exceeded 20 trillion yuan, with 710 million Internet users and an Internet penetration rate of 51.7% (GOV.CN, 2015). As of June 2017, three of the ten most important global platform businesses came from China (Baidu, Alibabaand Tencent, the Chinese ‘BAT’). Today, the platform economy has become a key economicpillarof China and a catalyst for its economic transition from an industrial economy to internet-based service economy. 

 

According to American magazine Foreign Policy(Rothschild, 2018), China has the largest platform economy in the world. There are over 110 million platform workers in China, including drivers, petsitters, house cleaners, couriers, etc., which account for 15 per cent of the total workforce (compared with 10 per cent in the United States and 4.4 per cent in Britain). This army of platform workers is made up in large parts of military veterans and low-educated migrant workers who were laid-off by factories (Yang, 2018). Taking Didi(a Chinese version of Uber) as an example, only 3 per cent of its drivers in Shanghai are local citizens. Similar statistics characterize Didi’s business in other first-tier cities such as Beijing (10 per cent). This migrant workforce is known as the ‘grey economy’ by Chinese media, because it is not recognised by the government and is often regarded as the “low-end population” (di duan ran kou, 低端人口) in policy documents (Zhang and Watt, 2019). 

 

Within this multi-billion business the BAT have invested enormously in the market and in human capital (Bloomberg Businessweek, 2019). These companies provide a variety of O2O (online-to-offline) services in China, including delivery, ridesharing, food delivery, groceries shopping, housework, housing agency, etc., reaching every aspect of socio-economic life in society. However, despite its significant contribution to the economy, there is little information about the platform workforce in China including its size, demography, job quality or workers’ well-being. This ignorance is attributable in part to the current policy framework in China, in which platform labour is notconsidered a formal employment status (see Case 1 below). Compared with other economy pillars (e.g. the automobile industry), workers in the platform economy are a topic rarely mentioned in the government’s policy documents or in the academic literature. Therefore, migrant workers who are work in the platform economy fall into the ‘double-indeterminate’ in the Chinese economy. 

 

Case 1. The eDaijia (hereafter EDJ) court cares

There are two legal documents that regulate the employment relationship in China: The 1995 Labor Law and 2008 Labor Contract Law. The 2008 Labor Contract Lawhas a clear classification of employment statuses in China, which entail legal responsibilities for employers.There are three types of legal employment status: 

 

(1) formal employment, 

(2) part-time employment, and 

(3) task-specific employment (a.k.a. independent contractors)

 

According to the law, employees in formal or part-time employment contracts enjoy legal protections such as minimum wages, maximum working hours and social insurance. On the other hand, the benefits of independent contractors are subject to market negations and not regulated by the 1995 Labor Law or the 2008 Labor Contract Law.

 

As these two documents were written years before the emerge of the platform economy, the Chinese governments (both central and local) find it difficult to categorise platform workers into any of the employment categories above. Without clear legal guidance, courts in China have no universal agreement on whether or not platform workers should be considered formal employees. 

 

For example, in a court case between the driver-hiring platform EDJand its drivers, the a court in Beijing concluded that the driver is an independent contractor, thus he/she should be liable for traffic accidents in which he/she was involved during his/her service. However, in a similar trail in the Shanghai court the opposite judgement was reached: The Shanghai intermediate court ruled that drivers are employees of EDJ therefore EDJ should reimburse the damage to third parties caused by their drivers.(for details of the rulings, see YU, 2018). 

 

In terms of academic literature, three international academic journals within the field of sociology of work were examined: Work, Employment and Society, Work and Occupations,and New Technology, Work and Employment. From 1 January 2010 until the present day, no articles contained the keywords ‘platform labour in China’ or ‘Chinese gig economy’. Whilst this absence cannot be the basis for a meaningful critique of the field, it reveals that much of the literature about platform labour is contextualized in the global north (especially the US, the UK and Australia). The discussions about the platform economy in China therefore have to be grounded in self-revealed data (e.g. annual reports produced by the platforms), which is sometimes abstracted and questionable in methodology[1]. Clearly, there is a growing need for understanding the structure of platform economy and labour conditions in non-western countries (e.g. China).

 

Migrant workers in the platform economy

 

The contemporary interest in platform labour is preceded by a more established scholarly concern over non-standard employment (e.g. self-employment, freelancers) and the online labour market. One recurring theme of discussion in this area is whether or not this growth of market-mediated online employment has made work more exploitative and precarious. Past literature (Chan, 2001; Selden, Ngai and Chan, 2013; Tian, 2019) demonstrate that migrant workers in China have experienced a high level of precariousness and exploitation for decades. This is particularly the case for those who are in informal employment. On average, they received a lower wage and social insurance coverage (Liang, Appleton and Song, 2016).

 

According to the Chinese labour network China Labour Bulletin(2019a), there are over 280 million migrant workers in China, contributing more than one third of the total working population today. As ‘second class citizens’ migrant workers suffer from poor employment conditions, employment instability, low-wages and a lack social security (Swider, 2014; Choi, 2018). Because of the Household Registration system (hu kou,戶口) in China, migrants who are not registered with local governments often work as day labourers without formal written contracts and legal protections. The relatively low-education background has forced these people to seek jobs in the manufacturing, logistic, coal mining or construction industry. Many of these jobs have exposed workers to a hazardous environment, causing accidents and even death at work (China Labour Bulletin, 2019b). In her case study of worker abuses, Anita Chan (2001) described migrant labour in China as one of the most exploitative labour regimes in modern history of the world.

 

Platform work, by contrast, with its promise of relatively easy earning, profitable entrepreneurship, autonomy and flexibility at work, has become an element of new spirit in the “Internet Plus” economy today. However, research has revealed that this promise remains unfulfilled in reality (Lehdonvirta, 2018; Sun, 2019; Veen, Barratt and Goods, 2019). Some researchers suggested that the rise of the platform economy has generated a new form of precariousness and a commodification of labour (Zwick, 2018) and lead to a rise in the concern for workers’ rights and employment regulations (International Labour Organization, 2017).AsChinese scholarPing Sun (2019) argues, one powerful critique that reveals the stringent algorithmic control and exploitative working conditions in the platform economy, is the case of deliverymen in Beijing, who constantly experience asymmetrical power relations and inequality on their respective platforms (e.g. no control over working time and delivery time, emotional regulation, and “customer supremacy” in relation to delivery work). 

 

Whilst these themes appear to be similar to the algorithmic labour control in the global north, she also discovered how deliverymen in Beijing game the algorithms by redistributing their orders between colleagues, and sharing information and delivery tactics on their internal social media community. Meanwhile, the paper by legal researcher Hui Yu (2018), briefly introduced the punishing mechanisms of platform work in China. These differ from the west, as platforms in China exercise a powerful system to punish or penalise ‘ineffective’ workers. Using Didias an example, the company will send checkers as ‘secret passengers’ to inspect the service of drivers and their grooming. If the driver fails to fulfil the company’s expectations, Didiwill decrease the number of orders assigned to the driver or even deactivate his account. Such punishing mechanisms also exists in platform delivery services,as reported by local media (original text in Chinese by Initium media, citied and translated by Yu [2018]). If the worker violates a platform’s regulations, a penalty will be applied to his pay (e.g. late delivery: 5 RMB for 10 minutes; arguing with customers: 50 RMB, etc.).

 

Both Sun and Yu’s work highlight the importance of “localisation” of workplaces in studying platform labour and technology, and the need to reconceptualise the political and sociotechnical meanings of platform economies, particularly in the context ofdeveloping countries. In some Asia-Pacific countries like the Philippines, Malaysia and Chinatechnology mediated labour, including platform work is perceived “as the best future of work” (Catilli, 2017). However, as economic transitions have begun taking place in these countries, more in-depth studies are needed to provide an evidence-based reflection on this political rhetoric and to critically examine its policy implications. 

 

Acknowledgements

 

I would like to thank the editor of M3Dialogue and Fabian Ferrari at the Oxford Internet Institute for discussing the ideas contained in this article. This article was presented at the British Postgraduate Network for Chinese Studies Annual Conference 2019 at the University of Cambridge.

 

References

 

Academic journal articles, books and conference papers

 

Casilli, A. (2017). Digital Labor Studies Go Global: Toward a Digital Decolonial Turn. International Journal of Communication, 11(2017), pp. 3934 – 2954.

 

Chan, A. (2001). China’s Workers Under Assault: Exploitation and Abuse in a Globalizing Economy. New York: Routledge.

 

Choi, S. (2018). Masculinity and Precarity: Male Migrant Taxi Drivers in South China. Work, Employment and society, 32(3), pp. 493 – 508. 

 

Lehdonvirta, V. (2018). Flexibility in the gig economy: managing time on three online piecework platform. New Technology, Work and Employment, 33(1), pp. 13 – 29.

 

Liang, Z., Appleton, S. & Song, L. (2016). Informal Employment in China: Trends, Patterns and Determinants of Entry. IZA Discussion Paper Series, IZA DO No. 10139. Retrieved 31 May, 2019, from http://ftp.iza.org/dp10139.pdf

 

Malin, B. J and Chandler, C. (2016). Free to work anxiously: Splintering precarity among drivers for Uber and Lyft. Communication, Culture & Critique, 10(2), pp. 382 – 400. 

 

Rosenblat, A. and Stark, L. (2016). Algorithmic Labor and Information Asymmetries: A Case Study of Uber’s Drivers. International Journal of Communication, 10(2016), pp. 3758 – 3784.

 

Selden, M., Ngai, P. & Chan, J. (2013). The politics of global production: Apple, Foxconn and China’s new working class. The Asia-Pacific Journal. Retrieved 31 May, 2019, from https://apjjf.org/-Jenny-Chan--Pun-Ngai--Mark-Selden/3981/article.pdf

 

Sun, P. (2019). Your order, their labor: An exploration of algorithms and laboring on food delivery platforms in China. Chinese Journal of Communication, 0(0), pp. 1 – 16. 

 

Swider, S. (2014). Building China: precarious employment among migrant construction workers. Work, Employment and society,29(1), pp. 41 – 59.

 

Tian, X. (2019). QWL and Related Factors for Migrant Workers Survey in Guangdong Province, China. Journal of Social Service Research, DOI: 10.1080/01488376.2018.1536629

 

Veen, A., Barratt, T. and Goods, C. (2019). Platform-Capital’s ‘App-etite’ for Control: A Labour Process Analysis of Food-Delivery Work in Australia. Work, Employment and Society, 00(0), pp. 1 – 19. 

 

Yu, H. The Destiny of Web Platform Workers in China: Employees, Nothing or a “Third Option”? Japan Labor Issues, 2(8), August-September 2018, pp. 92 – 100. 

 

Zwick, A. (2018). Welcome to the gig economy: Neoliberal industrial relations and the case of Uber. GeoJournal,83(4), pp. 679 – 691.

 

Online resources

 

Bloomberg Businessweek. (2019). The World’s Greatest Delivery Empire. Retrieved 31 May, 2019, from https://www.bloomberg.com/features/2019-meituan-china-delivery-empire/

 

China Labour Bulletin. (2019a). Migrant workers and their children.Retrieved 31 May, 2019, from https://clb.org.hk/content/work-safety

 

China Labour Bulletin. (2019b). Work Safety.Retrieved 31 May, 2019, from https://clb.org.hk/content/work-safety

 

International Labour Organization. (2017). Strengthening social protection for the future of work.Paper presented at the 2nd Meeting of the G20 Employment Working Group. Hamburg, Germany. Retrieved 31 May, 2019, from https://www.ilo.org/wcmsp5/groups/public/---europe/---ro-geneva/---ilo-berlin/documents/genericdocument/wcms_556986.pdf

 

GOV.CN. (2015). China unveils Internet Plus action plan to fuel growth. Retrieved 31 March, 2019, from http://english.gov.cn/policies/latest_releases/2015/07/04/content_281475140165588.htm

 

Rothschild, V. (2018). China’s Gig Economy is Driving Close to the Edge. Foreign Policy. Retrieved 31 May, 2019, from https://foreignpolicy.com/2018/09/07/chinas-gig-economy-is-driving-close-to-the-edge/

 

Wang, O. (2019). China’s gig economy losing ability to absorb laid off factory workers. South China Morning Post. Retrieved 31 March, 2019, from https://www.scmp.com/economy/china-economy/article/2185789/chinas-grey-economy-losing-ability-be-employment-backstop-laid

 

Yang, Y. (2018). Didi Chuxing says it employs 3.9 million retired soldiers as drivers, easing China’s jobless veterans problem. South China Morning Post. Retrieved 31 May, 2019, from https://www.scmp.com/tech/china-tech/article/2157269/didi-chuxing-says-it-employs-39-million-retired-soldiers-drivers

 

Zhang, D. and Watt, J. (2019). Inside China: Migrant workers and the Alliance of Beijing Drifters. South China Morning Post. Retrieved 31 May, 2019, from https://www.scmp.com/podcasts/article/2187970/inside-china-migrant-workers-and-alliance-beijing-drifters

 

[1]Forexample, Didi(2017) claimed to have 21 million drivers working for its platform. It is unclear wether this means 21 million driver accounts or 21 million actual drivers. See Didi Chuxing Corporate Citizentship Report. (2017). Retrieved 31 May, 2019, from http://img-ys011.didistatic.com/static/didiglobal/do1_p53rQtxhA6BjW6uWpF6t