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May 14, 2020

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Consumers smart over new smart locker fees

Hive Box, China’s largest smart locker company, is facing a consumer boycott in neighborhoods across the country after ending the free services that propelled the firm to popularity.

Under the new policy, non-member customers can leave e-commerce deliveries in a Hive Box locker free of charge for the first 12 hours. After that, a fee of 0.5 yuan (7 US cents) will be charged for every 12 hours thereafter, up to a maximum 3 yuan. Alternatively, users can pay 5 yuan a month to become a Hive Box member.

Hive Box’s change of policy came after the company acquired its largest competitor, pushing its market share to nearly 70 percent.

Locker services are considered the “last mile of delivery” in the world’s largest e-commerce market. Every day, deliverymen put millions of parcels ordered online in lockers supplied by Hive Box or other similar services.

Why are people so incensed about a change to what are relatively small fees?

“It’s not a matter of 0.5 yuan, but rather about paying for a service forced on us,” said Felicity Wang, who sites on a local neighborhood management committee. “All I want is a choice on which service to use. I never chose Hive Box, so why should I pay for it? It is also unreasonable to give people a free 12 hours to pick up parcels when many people who need to work won’t be home within 12 hours.”

Her neighborhood is one of an expanding number that are suspending the services of Hive Box locker units. Some neighborhoods went so far as to pull the plug on the locker units immediately.

At the beginning of the service, it was delivery people who chose to use the lockers and pay for that service by the number of parcels delivered.

“It saves me a lot of time, allowing me to deliver more parcels,” a deliveryman surnamed Zhong told Shanghai Daily. “And since we get paid according to the number of packages we deliver, it helps me make more money.”

He added, “Most delivery people I know are paying for the lockers. I pay about 50 yuan every month, and I can make 30 percent more on my monthly orders, so it’s well worth it.”

Many customers have complained that they think parcels should be delivered to the doorstep when they are home, rather than having to retrieve them from lockers.

According to the Shanghai Consumer Council, more than 600 complaints were filed in 2019 regarding unsatisfactory delivery services. Chief among the gripes was delivery to smart lockers without the consent of customers.

Since Hive Box announced its new fee policy last month, displeasure has rocketed.

“I get worse service when parcels are delivered to a locker rather than to my door, and now I have to pay for it?” said Wang. “There is no logic in that.”

2.5 billion packages

The owner of courier company SF Express, one of the founders of Hive Box in 2015, holds the majority of shares in the Shenzhen-based enterprise.

As of last year, it had more than 170,000 locker units in 110 Chinese cities, with 200 million people collecting 2.5 billion packages from its units.

In early May, Hive Box announced plans to acquire 94,000 lockers controlled by China Post.

Many neighborhood management committees, who have leasing contracts with Hive Box, argue that the company has violated its promise to provide a free service.

In a “Letter to Our Dear Customers,” Hive Box explained that it could no longer afford to provide free services that were never part of contracts with management committees. The letter didn’t refer to media reports that the company suffered a loss of 780 million yuan last year and wants to upgrade its financial position ahead of a possible stock market listing.

“Many new business models that have appeared in recent years often raise legal issues never discussed before, and this is one such case,” lawyer Jason Yao explained.

“It is a complex contract relationship that involves multiple parties — sender, receiver, smart locker service, delivery service and management committee,” Yao said. “The locker service has a right to charge, and the customers are entitled not to use the service. What’s missing in many discussions is the deliveryman, who is legally required to get consent from customers to use a smart locker.”

In practice, most customers were never asked and didn’t know their rights until now.

Various local authorities in charge of delivery services have made it clear in recent statements that a customer has the right to have parcels delivered to the door rather than a nearby locker. Part of that right is based on the fact that customers should be able to inspect parcel contents to make sure they contain what was ordered — something they cannot do if packages are put in lockers.

“Delivery companies are obliged to inform and get permission from customers before using a smart locker service,” the Shanghai Consumer Council said in a statement. “Any service charge for smart locker delivery must be reasonable.”

Responding to the outcry, a few delivery companies have announced they will require employees to seek consent from customers before using smart locker services.

Most neighborhoods in Shanghai banned delivery people from entering during the coronavirus outbreak. Instead, they provided public shelves for deliveries at the gate. The council has suggested that neighborhoods might extend such a service for the convenience of their residents.


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