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As gig economy gains mass appeal, safeguards are needed

The Edge Singapore
The Edge Singapore7/26/2019 08:00 AM GMT+08  • 6 min read
As gig economy gains mass appeal, safeguards are needed
SINGAPORE (July 29): In a Telegram group chat for Deliveroo riders, a member took a screenshot of his earnings from the food delivery platform. It suggests that he makes more than $4,000 a month, similar to what many white-collar workers earn and close to
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SINGAPORE (July 29): In a Telegram group chat for Deliveroo riders, a member took a screenshot of his earnings from the food delivery platform. It suggests that he makes more than $4,000 a month, similar to what many white-collar workers earn and close to Singapore’s monthly median wage of about $4,400. But the trade-off for the somewhat lucrative gig is long hours on the road, almost every day. Similarly, a private-hire car driver, 47-year-old Danny, spends between 12 and 15 hours a day on the road, more than five days a week. He brings home over $5,000 a month. While the hours are gruelling, he says it is better than any job he could score without a tertiary education certification. He was a sales agent for a decade and did a stint in construction before that.

These accounts are familiar among people who work in the sharing economy, or gig workers — loosely des­cribed as individuals who work on a short-term or freelance basis, instead of having permanent employment. Grab, for one, calls them “partners” and “micro-entrepreneurs”.

The ride-hailing and online food delivery services sectors form a big part of the gig economy. Analysts have estimated that about 4% of Singapore’s labour force is working for the tech platforms, and that their net income amounted to roughly $1 billion last year.

The majority of gig economy workers The Edge Singapore spoke to say they are earning more on the platforms than in their previous occupations — greatly emphasising the incentives these platforms dish out. Indeed, Yee Wee Tang, country head of Grab Singapore, said in an emailed response that food delivery partners, in particular, choose to work with GrabFood “because we give them full flexibility on when and where they’d like to work, the ability to cash out on their earnings daily, and a team of dedicated staff who’s always ready to help them”. GrabFood also provides dental benefits and personal accident insurance.

Meanwhile Deliveroo, in response to a question from our reporter, said: “We would like to go further in offering benefits to riders, but are currently constrained by the law. That is why we will continue to call on the government to update legislation so on-demand companies such as Deliveroo can offer both flexibility and security.”

Still, critics have pointed out that, incentives notwithstanding, these “partners” have to work gruelling hours. The platforms also seem to have inordinate control over the gig workers who are ostensibly freelancers. For instance, riders or drivers can be penalised for rejecting too many jobs that are sent to them. This does not leave the workers with much choice.

These gigs also do not help the workers move up the so-called value chain, or career ladder. And, importantly, they do little to help them build up a nest egg, as acknowledged by the government.

At a dialogue held by the National University of Singapore’s Social Service Research Centre on July 18, Second Minister for Education Indranee Rajah said, “We are quite concerned with the gig economy which gives a kind of short-term income but, like you point out, it doesn’t build up your retirement reserves.” This was in reply to a member of the audience who pointed out that a number of Singaporeans from low-income families are gig workers doing freelance work, which deprives them of the benefits of full-time jobs, such as annual leave, insurance and Central Provision Fund contribution. This may result in many facing difficulties securing housing or planning for retirement.

Indeed, on some level, Grab has acknowledged that working as one of its “partners” is not a long-term or permanent career plan. The company is working with SkillsFuture Singapore to support drivers who “wish to transition out of driving”, it says, through selected courses. Grab also partnered with Mendaki SENSE to help drivers “who are seeking other forms of gainful employment”.

What is needed, as the pool of gig workers grows and the companies they support becomes increasingly dominant in the economy, is more regulation and safeguards for the workers. There is concern that the tech platforms’ business models may be unstable, and should they scale back or pull out of the market, the hundreds of thousands of riders and workers who depend on them for a living would be left in the lurch. One commentator is particularly scathing. Law professor and former nominated Member of Parliament Eugene Tan says the platforms’ business model “is fundamentally about avoiding employee liability, socialising economic insecurity and worker vulnerability”.

To be sure, the authorities here have already been stepping up regulation for the ride-hailing companies, but specifically only to bring them in line with the taxi operators in terms of commuter safety and licensing.

Other cities have strengthened safeguards for gig workers. In California, the state assembly passed a law requiring companies to recognise them as employees. In the European Union, lawmakers approved new rules in April that outline certain rights for gig workers. These include compensation for cancelled work and regular working hours.

In Singapore, steps have been taken for the benefit of the self-employed. The Manpower Ministry released a ­Tripartite Standard of Contracting last year that is meant to help reduce late payments and settle contractual disputes for the self-employed. But none of the major platform companies have adopted the standards.

When asked about a new classification for gig workers in Parliament in May, Minister of State for Manpower Zaqy Mohamad said it could risk companies misclassifying employees as such workers. In any case, whether or not a worker is considered an employee of a company depends on a combination of factors, including whether the company has an obligation to provide work for the worker, whether the worker is obliged to accept work by the company and the extent to which the worker needs to comply with the company’s procedures and prescribed method of work.

Sceptics of regulation say it will make the sharing economy less efficient, which would in turn hurt workers and consumers. There is unlikely to be one solution that will resolve all issues. But because of the sheer size of the dominant companies in the gig economy, there must be safeguards for their workers.

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