Food delivery platforms to do away with financial penalties, sparking debate

China's food delivery platforms are set to abolish financial penalties for delayed deliveries, sparking various responses from the food delivery market.

According to Eleme's official WeChat account, it's testing a revised service-points mechanism that replaces direct monetary penalties with point deductions to better incentivize performance and reward high-quality service. Cities participating in the trial include Nantong and Changzhou in Jiangsu province, Jieyang in Guangdong province, and Jingdezhen in Jiangxi province. There are plans to expand the initiative to more cities in October.

Meituan is on a similar track, The Paper reported on Oct 16, having tested a "non-penalty mechanism" in over 30 cities, the company has publicly pledged to completely eliminate late-delivery fines by the end of 2025.

The industry change received a mixed response from food delivery riders. Li Yingke, a Meituan food delivery rider, expressed support for such regulatory changes.

"Deducting service points is a better approach. We won't have to rush as much," Li said.

Zhao Xuena, another Meituan food delivery rider, was a bit worried.

"Delaying delivery leads to a decrease of service score, which will also impact our wages," Zhao said.

She added that riders have to complete a certain number of orders every day, however, the system doesn't prioritize assigning orders to riders with lower service scores.