In Hong Kong’s battle of delivery apps, a mainland newcomer is challenging the business model.
KeeTa, the sister food delivery app of Meituan, a dominating Chinese delivery giant in mainland China, has kicked off deliveries in Hong Kong since last May. Today it is sharing the local market with Foodpanda and Deliveroo.
Market researcher Measurable AI has released its latest figures showing that KeeTa has overtaken its competitors.
In March, KeeTa’s market share reached 44% by order volume, making it the number one takeaway platform in Hong Kong, compared to 35% for Foodpanda and 21% for Deliveroo. Meanwhile, KeeTa accounted for 43% of orders in the first quarter of the year, higher than Foodpanda’s 37% and Deliveroo’s 20%.
So far, KeeTa has attracted over 2.01 million users to download its apps, and the platform has nearly 10,000 merchants on board.
Behind KeeTa’s successful entry into the Hong Kong market, the contribution of KeeTa’s delivery workers is indispensable. However, these workers face various challenges when delivering food.
It is 5 o’clock in the evening and the streets are crowded with cars in Central. In the stream of traffic, some people are wearing yellow T-shirts with the logo “KeeTa” written on them. Their black motorcycles are roaring with huge takeout bags hanging from them. They rush out into traffic as soon as the green light comes on. These delivery riders have to race against the clock to get the food from the restaurants to customers.
Among the noise of engines and the bustling city, Miko Hung, a nineteen-year-old takeaway rider, switches from his school work to his delivery work. Wearing a KeeTa T-shirt and with a delivery bag on his back, Hung joins the ranks of those who keep the city fed at its busiest hours.
“Since I had heard that delivery in Hong Kong is a very profitable job, I wanted to experience if this career is really rewarding,” Hung said. Starting from last summer holiday, he would work in delivery for about two to three hours a day whenever he had time.
Job without the safety net
Compared to other platforms, KeeTa’s sign-up process is very simple: fill in your details, no registration fee is required, and you get a uniform and delivery bag.
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However, a delivery worker doesn’t have a formal contract like a regular job. “We are like freelancers, without the safety net that comes with a regular job,” Hung explains.
According to Hung, the contract signed between KeeTa and the delivery workers during registration was not a labor contract, but rather a type of negotiated clause. As a platform, KeeTa buys health insurance for the workers from a third party. Therefore, the workers are entitled to receive insurance benefits for any traffic accidents that occur during the time from receiving the order to delivering it.
While Keeta offers accident insurance, it’s a stark reminder of the risks every delivery worker faces. “It’s something,” Hung admitted, “but you always hope you never need to use it.”
KeeTa’s insurance in Chinese Credited: Miko Hung
KeeTa’s insurance in English Credited: Miko Hung
Waiting for orders
“I earn the most at KeeTa, averaging 30 dollars per order, plus bonuses can reach 40 dollars,” Hung said.
In an ideal situation, a delivery worker would be able to consistently receive orders and earn a steady income over a specific timeframe. However, the actual reality may not meet these expectations.
“KeeTa order-taking is unstable, and you may encounter a situation where there is no order for an hour, even in the most crowded places,” Hung said.
KeeTa workers take orders in two online ways: free online and booked online. Booking online means that delivery workers can choose a delivery area and a delivery time, about two or three hours to go for delivery in advance. KeeTa will usually give priority to the delivery workers who booked online.
Free online is suitable for takeaways who want to deliver on a temporary basis and can book a delivery area and time whenever they want. However, the platform’s delivery orders are generally slower than those booked online, and free online delivery workers are likely to encounter long periods of time when they do not receive orders.
This means that their income is volatile. Sometimes it is even granular. The uncertainty increases the risk of a career as a delivery worker.
Miko Hung needs to book the time to deliver food
The algorithm dilemma
Navigating through the congested streets of Mong Kok, Dean Yang, an internet industry expert aged 41, experiences the city’s pulse firsthand. He usually logs on to KeeTa every day between 11 a.m. and 2 p.m. This is also the time when takeout delivery orders are at their peak, and he receives around nine orders during this time.
The algorithm of KeeTa is both a blessing and a burden. Yang commented that KeeTa’s operating mechanism is very similar to its mainland parent company, Meituan. “KeeTa’s algorithm can dispatch consecutive orders to the worker, which are usually closer together. It will be more economical for the rider to go to one area to deliver multiple orders at the same time.” This is exactly the algorithm Meituan uses in cities like Shanghai, where it is the most popular food delivery app.
Miko Hung can take two close orders together at one time
“But algorithms can’t fully predict what actually happens during delivery,” said Hung.
Hung recalls a delivery trip from Kowloon Bay to Kai Tak. He tried to follow KeeTa’s route at the time, only to find that the platform calculated the distance traveled on a straight-line basis.There are two motorways between the restaurant and the delivery address, which Hung had to bypass to deliver the food, and the distance is not as “close” as the platform makes it out to be. Moreover, the high volume of traffic near the motorway and the number of sections that require climbing, all of these posed a great obstacle to Hung ‘s deliveries and added to the danger.
The navigation page on KeeTa isn’t very detailed as well. Hung showed us KeeTa’s map navigation page, which only shows the location of the pickup and delivery places, and the approximate distance between them. “I usually tap on Google Maps to search for the delivery destination to navigate, rather than looking at the platform’s map,” Hung said.
Race against time
In addition to the actual delivery distance and road conditions along the way, the platform’s tight time constraints also made Hung and Yang feel a lot of pressure.
“The average delivery time for an order is only half an hour,” Hung said. After the merchant takes the order, the order is dispatched to the delivery worker a while later, and the countdown has already begun when the worker chooses to take the order. This half-hour includes the time to pick up the food, wait for takeaway, and deliver the food. If meeting a situation where the road condition is bad or it is difficult to walk, the delivery worker can easily cause delays and affect the revenue.
Although KeeTa gives delayed delivery time, the delay is usually around five minutes. Hung once waited for 10 minutes at a restaurant before picking up the takeaway, so he took a photo and uploaded it to KeeTa’s platform as a way to request a delayed delivery time. “This is the only way to guarantee that the delivery worker will not exceed the time limit, other than that, the platform has not given any other solution at the moment,” said Hung. Hung has tried to apply for an extension of delivery time three or four times in a month.
Miko Hung runs to pick up deliveries
Platforms trap delivery workers with algorithms and incentivise them to race against the clock with on-time fees over and over again. “The payment for an order is made up of a basic delivery fee, a distance delivery fee and an on-time fee,” Hung said. KeeTa’s basic allocation fee for a single order is HK$8.80, with a distance delivery fee of around $20 or so, and an on-time fee of typically two or three dollars. In order to keep those two or three dollars, delivery workers need to run faster.
“Although the two or three dollars may not seem like much, it’s always hard to be deducted for being a minute or two late, so I can only try my best to run a little bit faster to make sure it’s delivered on time,” Hung said.
In addition to punctuality, KeeTa also has KPIs such as order-taking rate and attendance rate, and the platform uses these standards and rules to stimulate delivery workers to deliver efficiently in a limited time and maximize revenue for the platform.
On heavy rainy days, delivery workers will deliver slower than usual and take longer than the system expects to deliver multiple orders at once. Yang still remembers the black rain warning in Hong Kong last September. At that time, the rain was already too heavy to deliver food, but the system still kept giving him orders, which he couldn’t refuse because it is related to his monthly KPI.
“It’s like playing a game that plans your every move, but sometimes it forgets you’re human,” Yang said.
Payment bias: distance vs. quantity
According to KeeTa’s algorithm, the distance between pickup and delivery points is the most important factor affecting the pay of a delivery person. On top of that, the more things a customer orders, the more they generally pay the delivery worker.
Hung once had a delivery order for a box of rice that required him to travel approximately two MTR stations from the pick-up point to the delivery destination. For this order, KeeTa paid him HK$50. “I’ve also tried delivering 13 cups of milk tea for a takeaway order before, but I was paid just HK$40,” Hung said. Hung felt that orders with a large number of items were not given as much as distance instead, making him feel that the algorithm wasn’t fair either.
“The situation of a large number of items puts a lot of weight on the delivery worker’s walk, and I think he should be paid more,” Hung said. He found it a headache to encounter such a situation, as he felt pressured by the need to protect the items from walking passers-by, while also taking care not to overrun the time limit and hand over to the customer on time.
Struggles and hopes
If I have the time, delivering as a part-time job is a good option.
“When KeeTa entered the Hong Kong market, the claim given to delivery workers was that they could earn up to HK$35,000 a month, which is close to double the median salary in Hong Kong,” Hung said.
However, if we calculate on the basis that a delivery man delivers one order every half an hour at US$30 per order, his monthly salary is far lower than HK$35,000.
“The income from delivery works out to be about the same as a basic salary in Hong Kong, and there are safety concerns,” Hung said. Therefore, Hung expressed that he would not consider taking up delivery as a full-time job because it is very hard work and there is no possibility of getting a pay rise. “If I have the time, delivering as a part-time job is a good option.”
Yang is optimistic yet realistic about the future. “Change is necessary,” he said, hoping for a future where policies will evolve to recognize and protect the rights of delivery workers more robustly. “Delivery workers are part of the city’s heartbeat, after all, and that should mean something,” Yang said.
After learning about these issues, we submitted interview requests to The Hong Kong Federation of Trade Unions and the Service Industry General Union, which were declined. We sent another interview request to KeeTa, which had not responded as of the story’s publication.
How about its parent company Meituan in the Mainland?
Actually, these issues are not unique to KeeTa in Hong Kong, as its parent company Meituan is also experiencing similar problems that are only worsening.
In Hong Kong, food delivery companies such as Foodpanda, Deliveroo, and KeeTa do not offer employment contracts to their delivery workers. As a result, delivery workers in Hong Kong work part-time and are referred to as “full-time” only because they deliver food throughout the day. In Mainland China, delivery workers are categorized into two types: “crowdsourced” and “full-time”. Crowdsourced delivery workers are numerous, work flexible hours, and do not have any employment contracts. Full-time delivery workers are few, have employment contracts, and work fixed hours. According to Meituan’s report, a total of 5.27 million takeaway riders took orders from Meituan throughout 2021, of which more than 60% were crowdsourced riders.
Deng Hua, 23, is a crowdsourced delivery worker for Meituan in Nantong, Jiangsu province. He mentioned that there was no free medical insurance or delivery equipment offered to him. “I need to pay three yuan a day for medical insurance. Also need to spend about 50 yuan on a helmet.”
However, despite having medical insurance for himself, Deng Hua was reluctant to be reimbursed through his insurance when involved in a road accident. “My colleague was once reimbursed for his medical expenses, and Meituan blocked his account after making the payment, deeming him to be a high-risk account and preventing him from delivering food again.” Deng said, “Isn’t insurance just a formality?”
Which delivery man doesn’t run red lights? How do you grab orders without looking at your phone while riding?
“I set my schedule, pick the orders, and if I work smart, I make good money,” Deng said. For him, he had to work nine hours per day, and he got 3 yuan for each order, together with a bonus of an average of 6 yuan. At most, he delivered seventy orders a day.
“Maybe it’s time to try something new,” Deng said. Recently, there has been an increase in layoffs and unemployment in mainland China, leading to a surge in competition for takeaway delivery jobs. As a result, there are more takeaway workers than before, but the number of orders has decreased, making it challenging for them to earn enough to make a living, even if they are working harder than before.
Produced by
Wang Yi & Guan Wenjun
Thanks to
Miko Hung
Dean Yang
Deng Hua
Credits
All videos, pictures, and texts were collected and written by the authors