JD.com’s (9618) food delivery unit promises to refund riders the costs of their motorcycles if they can deliver 3,000 orders in three months, one of the latest “benefits” the Chinese e-commerce giant offers in the escalating domestic competition.
The newcomer to the on-demand delivery industry announced on Wednesday that it plans to invest 2 billion yuan (HK$2.18 billion) in upgrading benefits for full-time riders, which includes 150,000 motorcycles for delivery work.
Riders need to buy the two-wheeled vehicle first. If they can deliver 3,000 orders in 90 days, JD will refund the money, according to a notice issued by the company on its WeChat official account.
That means a rider needs to finish over 33 orders per day. Without statistics compiled by any authorities, the average number is said to be higher than 50, mainland media reported, citing a rider in Chongqing.
The motorcycle, described by JD as wearing red armor and a lightsaber, features the company’s red color and the food delivery units' logo.
Besides the motorcycles, JD will pay for the riders' social security insurance and housing fund, as China’s labor law requires, as well as subsidies for each summer and winter, without revealing the amount.
This comes as JD’s rivals Meituan (3690) and Alibaba (9988) reignited the segment's price war in July. Many consumers said they got bubble tea for free, while some merchants complained that some orders were left behind.
Nomura estimates that the cash-burning take-out war could extend into the third quarter of the year.
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