New rules for food delivery sector

China has introduced a new national standard aimed at curbing excessive platform fees, aggressive sales tactics and "ghost kitchens" in the country's food delivery industry, as regulators seek to drive healthy development of the sector.

The State Administration for Market Regulation released last week a recommended national standard that outlines broad compliance rules for platforms, merchants and couriers for food delivery services.

Right after the announcement, major platforms like Meituan, JD and Taobao said that they would voluntarily implement the standard and embed the requirements into their operations and service processes.

One of the key focuses of the standard is to improve labor protections for millions of delivery riders in the country. Platforms are instructed to incorporate factors such as road conditions, weather, the number of concurrent orders and whether a building lacks elevators, while calculating delivery times.

Delivery-time algorithms should assume an average electric-bike speed of no more than 15 kilometers per hour — not the upper limit of 25 km/h used by some platforms.

The standard bans platforms from forcing or pressuring merchants to participate in promotions, or from passing platform-borne subsidy costs on to merchants or couriers through service-fee hikes or bundled marketing. It also prohibits using below-cost pricing to squeeze competitors.

To address "ghost kitchens" operating from fake addresses or rented licenses often with poor hygiene but high online ratings, the standard tightens entry requirements and mandates stricter verification of business locations, facilities and operating conditions.

Platforms must review storefront photos and kitchen environments, while merchants must upload continuous, unedited videos showing the facade, dining area and kitchen with verifiable location data. These videos will eventually be viewable by consumers directly through the app.

Zhang Xinliang, a director at the China National Institute of Standardization, said: "Platform economy is a new field where technologies and business models evolve rapidly and problems emerge quickly. The recommended standard is expected to help promote the healthy development of the food delivery sector to benefit more stakeholders, including deliverymen and consumers."