On April 7th, [Mingli Lecture Hall 2022 Issue 19] was honored to invite Associate Professor Zhang Wei of the University of Hong Kong to bring you an academic report entitled "Counteracting "Nèijuǎn"? Pitfalls underneath Algorithmic and Welfare Regulations on Gig Platforms". Professor Li Guo from the School of Management and Economics of Beijing Institute of Technology introduced Professor Zhang Wei and presided over the report.
Mr. Zhang first introduced that the current Chinese takeaway riders work hard, but also bring a lot of traffic accidents, but their overall income is not necessarily considerable. The Chinese government has announced a set of regulatory guidelines following recent calls from the public to avoid "involution" and improve the welfare of Chinese food delivery riders. Based on this, we examine the effectiveness and efficiency of two major regulations related to platform rider welfare. One is the service request distribution of the decentralized platform, and the other is mandatory labor insurance: the cost of traffic accidents is transferred to the platform. Based on the above two regulations, we designed a stylized economic model, in which the platform sets rider wages, service prices and request allocation algorithms under each regulation type, and heterogeneous service agents, mainly platform takeaway riders, decide their respective services Effort level, customers decide whether to request services based on their respective willingness to pay and sensitivity to delays. The three parties form their own rational expectations for information that cannot be immediately observed, and these expectations are satisfied in equilibrium. Surprisingly, we found that both regulations may improve platform rider welfare, but fail in some cases. Algorithmic regulation discourages platform riders, pushes platforms to raise wages and service prices, and exacerbates double marginalization. Conversely, mandatory insurance weakens double marginalization but allows platforms to squeeze surplus labor. What's more, we find that it is impossible to find a Pareto improvement for social welfare unless platform delivery riders are reduced to a minimum level.
Mr. Zhang Wei's wonderful report attracted many teachers and students from domestic and foreign universities. In the report, Mr. Zhang carried out academic exchanges with the participants; many students learned a lot and shared their academic impressions after the meeting.
