Protests Over Foodpanda Pay Decrease

Hot Topic: This week has seen protests over the Foodpanda delivery service which has reduced the pay per-delivery for its couriers.

Small, yet nation-wide, protests have been staged in the past few days against the food delivery service ‘Foodpanda’ as a result of a large reduction in pay. For example, around 60 couriers gathered next to Taichung City Hall demanding that the delivery service platform reconsider its position on pay. This comes after a policy decision by Foodpanda which has seen a decrease of pay from NT$70 per delivery to roughly NT$57 per delivery - a reduction of around 20%, and, as the protestors claim, one that would force drivers to work 1.5 times more to earn enough to eat. This is on top of expenses already paid on gas, scooter repair and insurance, as well as policy changes that Foodpanda is starting to enforce, such as having to pay for uniforms and delivery bags.

Issues surrounding employment were covered by Asiallians last year with regards to the status of the drivers. In 2019, the Ministry of Labour (MoL) claimed that all delivery drivers – including those from UberEATS, Lalamove, and Foodpanda – were to be seen as employees and not independent contractors. However, this was a half-way measure as the decision is not yet legally binding, simply an expression of the Ministry’s view. This declaration by the MoL impacted roughly 80,000 drivers and was met with scorn from the companies – with Foodpanda rejecting the Government’s assertion of the employment status being given to employees.

Governmental classifications, such as this, are not abnormal. Across the world, in areas where these delivery companies are active, jurisdictions are attempting to restrict the freedom of the platforms that state that their workers are in fact, independent contractors. For example, in the UK, recent cases have seen a desire to categorise participants as either an intermediate status, ‘workers’, or as full employees.

The cause of the pay decrease may be due to the amount that the service platforms predict they may have to spend on the employment rights if the law eventually extends to encompassing the drivers. The employee status would have a large impact with regards to entitlement to regulations such as minimum wage, health insurance and compensation for injury or death during work. During the discussions with the Government about the classification of employees, the delivery platforms have predicted that such costs would bring a heavy burden on the companies.

The drop in pay per-delivery is a serious blow to the drivers who once argued that they enjoyed being named as independent contractors, as they were better paid than the average monthly salary in Taiwan. Reports tell of drivers who have had their earnings cut dramatically – one has been quoted as saying that their 15-hour work shift used to provide him with NT$2,100 a day but that this amount has dropped to NT$1300 a day. This is also against a backdrop of fiercer competition between drivers using the app and with nearly 9,800 couriers in Taiwan, many have reported that they have to compete for orders - supply has been catching up with demand.

The platform explained the pay cut as being part of an overall reform which would offer its couriers more hours and a more stable income. However, this does not seem to reflect the ‘flexibility’ that is promoted by Foodpanda as a defence to claims that the drivers are employees. This argument, made by both the platform and many of the couriers, originates from the fact that a driver is able to turn off the app whenever they choose to, there being no obligation to use it. Despite this, ‘more hours’ seems to highlight that the technology platform is, in some way, in control of the number of profitable hours that drivers can be operating within, thereby, disregarding the argument that drivers choose their own hours. This follows a rule in the contract that emphasises that if the driver refuses to take an order, they can be forced out of the application and made to “take a break” or be assigned less-busy hours, reinforcing the control that Foodpanda may exert.

Furthermore, the protests have been reinforced by the lack of consultation between Foodpanda and the drivers, seemingly reemphasising that the platform does not see the workers as employees. The couriers have highlighted that, if they were to be deemed as employees, then the company would be unable to unilaterally change the terms of the employment and so will need the employee’s permission. This means that there will most likely be a legal challenge put against Foodpanda which may see a definitive classification being imposed by the courts.

For now, however, the Taichung City Government is seeking to facilitate dialogue between the company and the workers in order to mediate and resolve the dispute. This is aided by the fact that there is now a union for Taichung couriers, set up by the Taichung Labour Affairs Bureau, which will be able to have the authority to argue on behalf of the local drivers.

For stories on the upcoming protests 

For our previous report on delivery drivers in Taiwan