1. [para. 1][para. 4] Wang Fumin, a delivery person for KFC for 12 years, suffered a severe brain injury in a January 2026 traffic accident while returning from a delivery. Despite working long hours with as little as one day off per month, he found he had no identifiable employer to pay his medical expenses or compensation. After the injury, he sought help from his station manager and the KFC store manager but received none.
2. [para. 2][para. 3] Wang’s case highlights a growing crisis in China’s gig economy, where fragmented employment chains shield major platforms and brands from liability. The Beijing Zhicheng Migrant Workers’ Legal Aid and Research Center filed a pioneering lawsuit arguing that Wang is in a “joint labor relationship” with four entities, including KFC and delivery giant SF Intra-city. The lawsuit was officially accepted on Aug. 4 by a court in Hebei province. Around 2024, KFC’s delivery operations in Wang’s area shifted to SF Intra-city; his restaurant location, duties and shifts remained unchanged, but he was required to switch dispatch software and buy an SF Intra-city uniform. His contracts and payroll were spread across seven or eight different supply-chain companies.
3. [para. 5][para. 6] A recent report by the Zhicheng center, tracking delivery-platform labor disputes from 2021 to 2026, examined 642 publicly available court rulings across the Chinese mainland. It found that courts continually force workers to identify a single employer despite a multi-entity reality. When courts do recognize a labor relationship, liability is placed on bottom-tier subcontractors or city agents 96.1% of the time, and in none of the reviewed cases was a platform enterprise deemed the employer.
4. [para. 7] Luo Yihan, deputy director of the Zhicheng center, said multi-entity employment has become industry norm, yet legal procedures still presume a single employer. “Employment risks are pushed outward through various compliance designs, but the entities that profit the most always remain furthest from the labor relationship,” Luo said.
5. [para. 8] The report outlines three major shifts in the delivery sector over five years. First, direct platform employment has plummeted and outsourcing has largely replaced it. Second, “constrained crowdsourcing” has surged since the fall 2025 food-delivery price wars, with nominal crowdsourced riders subjected to strict scheduling, volume quotas, online-time mandates and punctuality metrics—treated as dedicated staff but denied corresponding protections. Court recognition of labor relations stands at 83.0% for dedicated riders versus just 7.3% for crowdsourced workers. Third, dedicated delivery chains for major restaurant brands have risen, creating the backdrop for Wang’s case.
6. [para. 9] According to a 2024 Frost & Sullivan industry white paper, brands such as KFC and Pizza Hut reduced their in-house rider fleets around 2024 and outsourced most orders to SF Intra-city for efficiency. This formed a convoluted chain: restaurant brands control orders and service standards; platforms manage dispatch, pricing and algorithms; subcontractors handle contracts, payroll and insurance; and station managers oversee daily operations.
7. [para. 10][para. 11] Establishing a labor relationship in these conditions is legally daunting. In late 2024, China’s Supreme People’s Court issued guidance establishing “dominant labor management” as the standard for identifying a labor relationship, and advised that the enterprise with the closest relationship to the worker should be deemed the employer. In practice, however, courts usually interpret “closest relationship” as a single entity. When riders sue multiple companies simultaneously, courts often see it as proof that the worker does not know their true employer; suing entities one by one incurs prohibitive time and evidentiary costs. Disputes average 4.32 corporate entities per case, but workers sue multiple entities together in only 17.6% of successful labor-recognition cases.
8. [para. 12] To bridge this gap, the Zhicheng center is advancing the concept of a “joint labor relationship” in Wang’s lawsuit. The legal theory holds that if multiple companies collectively exercise dominant management over a worker’s single labor process and all derive profit from it, they should be recognized as joint employers. They would bear joint and several liability externally, with internal cost apportionment based on management weight and profit share.
9. [para. 13][para. 14] Formal labor relationship remains the master switch for basic rights such as workplace injury compensation, social security, minimum wage and dismissal protection. Regional pilot programs for occupational injury insurance are a positive step, but legal advocates argue they cannot replace foundational employment protections. Tong Lihua, director of the Zhicheng center, said: “For those who meet the conditions, a labor relationship must be established. Proposing a joint labor relationship helps reduce the litigation burden on workers and serves as an effective countermeasure against companies trying to evade their legal responsibilities.”
AI generated, for reference only
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