It is precisely in this transitional context that platform-based ridehailing and food delivery began to emerge and establish itself in China. In both sectors, several leading companies have since 2012 underwent a process of gradual ascent, intense competition, and the establishment of market leadership. In this process, the organization of labour process in the two sectors similarly underwent substantial changes to become increasingly informal and precarious.
The food delivery sector started with platform direct employment, but gradually a mixture of crowdsourcing and outsourcing/subcontracting were developed and become the norm to balance labour power security and flexibility. In the crowdsourcing model, riders directly enter into relations with the platform and were subject to direct algorithmic management/ technological control by the platform itself in their daily work; in the outsourcing/subcontracting model, a subcontractor is responsible for the platform’s operation in a designated area and is sandwiched between riders and platforms along an evaluative chain. In their daily operation, a subcontractor usually further divide the area into several stations, operating under the zhanzhang (station manager) responsibility system and performance-based tiered management.<sup>6</sup> In the case of ride-hailing, the turning point was 2016, when state regulations of shuangzheng,double certificate, was promulgated after several cases of female passenger murders sparked public outrage. The new regulation required both cars and drivers to get licensed for a fee, while imposed strict restrictions on the specs of cars and driver experience and in some cities, their hukou status. As a result, many existing drivers and cars were no longer qualified. This gave rise to a shadow car-rental market where vehicle leasing companies (VLCs) rent cars to drivers on a monthly fee comparable to that of the traditional taxi sector. Like subcontractors in food delivery, these VLCs carry out daily management over the drivers and control them through deposit, rent and debt. In both sectors, the market is more fragmented in big cities at the industrial heartlands (Shenzhen, Guangzhou and Nanjing), while less so in small cities at the industrial periphery, measured in terms of the number of independent subcontractors/VLCs in a given geographical area.
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<sup>6</sup> In real-world operations, platforms and subcontractors have great autonomy over how these mechanisms of management and control are designed and implemented. The reality is far more complex that what the space allows us to describe here, and can vary from place to place. But the general structure can be grasped as what has been described here.