China’s Meituan Refutes Claims that it Charges Subscribing Members Higher Delivery Fees

A widely-circulated WeChat article said Meituan has been charging subscribing members at least 1 to 5 yuan extra for delivery compared to non-members for the same order. (Source: Xinhua)

China’s largest food-delivery site Meituan has refuted claims that it took advantage of subscribing members by hiking up delivery fees, blaming it on issues with its real-time location system.

A widely-circulated WeChat article said Meituan has been charging subscribing members at least 1 to 5 yuan ($0.15 to $0.76) extra for delivery compared to non-members for the same orders, accusing the company of financially exploiting existing loyal customers.

The article, published on Tuesday by Piaoyi Shenfu (漂移神父), a “we media” online news account run by an individual, has since gone viral and sparked heated discussions on Chinese social media platforms. Some internet users claimed they had similar experiences and branded the company as “unethical.”

The author said he discovered the difference in delivery fees when trying to place the same order on two different mobile devices. 

He subscribed to Meituan’s membership scheme two weeks ago. Last Wednesday when he tried to place his usual lunch order from a restaurant he had ordered from many times, he was shocked to see that the delivery fee had increased to 6 yuan from the usual 3 yuan.

At first he thought the price hike was due to the peak lunch period, so he decided to hold off on the order. However, 40 minutes later, the delivery fee was still 6 yuan.

Confused, he tried placing the same order on a different phone that wasn’t subscribed to Meituan’s membership scheme. To his surprise, the delivery fee for the order was 2 yuan — a 4 yuan difference from what he would have to pay from his subscribed account. 

He tried reaching out to Meituan’s customer service but said the issue remained unsolved. Delivery fees of subsequent orders remained higher on his subscribed account.

After his article went viral online, he said representatives of Meituan reached out and visited him at his residence on Thursday afternoon. The team of business department heads, technicians and customer service representatives conducted tests and inquired about the situation for about 20 minutes. 

“The Meituan staff came to my home and apologized. Their attitude was really sincere, which I appreciate,” the unnamed author told Chinese media.

In its defense, Tencent-backed Meituan said in a notice on Thursday night that the different delivery fees were caused by an error with the system’s location cache, and are not evidence of discrimination. 

“The difference in delivery fees between members and non-members mentioned in the article has nothing to do with a user’s membership status. The software incorrectly used the user’s last recorded location and resulted in a miscalculation of the estimated delivery fee,” the statement said.

If the user proceeds with the order, the delivery fee will be charged according to the customer’s exact location, it said.

“We sincerely apologize to users for the inaccurate delivery fee estimation caused by the location cache error. We have established a special task force to conduct further communication with users to solve the issue and improve our product and service levels,” it said.

Hong Kong-listed Meituan charges 15 yuan for the first month of a membership subscription and 6 yuan every month after that, offering users free monthly delivery coupons worth between 30 and 60 yuan, birthday perks and other deals.

Food delivery, which accounts for over half of Meituan’s total revenue, posted revenue growth of 32.8% to 20.69 billion yuan, according to the company’s Q3 earnings report.

However, net users remained unconvinced, accusing the delivery giant of being “sneaky.”

The Weibo topic titled “Meituan accused of taking advantage of members” has attracted 600 million views and more than 47,000 comments by Friday noon. 

“It’s true, when I place an order at the same time as my roommate, there’s a 5 yuan difference in delivery fee,” one comment read. Other users also said they experienced the same issue.

“This is why we need anti-monopoly rules,” another user said, referring to the government’s intention to increase scrutiny of China’s largest tech corporations.

SEE ALSO: Meituan Share Price Falls 7% Ahead of Unaudited Quarterly Financial Report Release

China’s anti-trust watchdog in November unveiled regulations that would seek to curb anti-competitive behavior such as compulsory collection of user data, price discrimination among customers, alliances that squeeze out smaller rivals and over-subsidizing services to eliminate competitors.

On Monday, the country’s watchdog fined Alibaba Investment, Tencent-backed China Literature and Hive Box 500,000 yuan each for failing to declare deals to regulators. It is also reviewing an impending Tencent-led merger of live-streaming platforms DouYu and Huya.