Pay hit fears as Singapore plans gig worker benefits

Thomson Reuters Foundation

12:10 JST, December 29, 2022

SINGAPORE (Thomson Reuters Foundation) — Alicia quit her job at a Singapore construction firm during the pandemic and signed up to work for an app-based delivery company, then a ride-hailing platform. While she welcomed the flexibility, she worried about her pension, and falling sick.

So she was relieved when the city-state’s government said last month it would soon introduce legislation to extend work-related injury insurance and pension coverage to delivery and ride-hailing workers from 2024 onwards.

“As a single mother, I sometimes worry about how uncertain this job can be, because I never know how much money I will make every day,” said Alicia, 43, who asked to be identified only by her first name.

“So it’s good that we can get some of the benefits that other workers get. It makes me feel a bit more secure, and I can plan for the future,” Alicia, who drives for 10-12 hours a day, told Context, Thomson Reuters Foundation’s media platform.

Singapore is among the first Asian nations to provide legal protections for people working in the gig economy, with the new rules set to benefit about 73,000 people who deliver food or drive passengers for companies such as Grab, Gojek, Deliveroo and Foodpanda.

The step follows strikes and protests worldwide as workers demand better conditions and higher wages from app-based businesses amid a post-pandemic drop in earnings, higher living costs and a jump in fuel prices.

Some governments have taken note. Indian authorities have said a social security law would be extended to gig workers, although it has not yet been implemented, while Chinese regulators last year ordered online platforms to ensure workers earned above the minimum wage, and had insurance coverage.

“We are seeing more government action over platform workers’ rights and protection,” said Akkanut Wantanasombut, who researches platform work at the Institute of Asian Studies in Bangkok’s Chulalongkorn University.

“In Southeast Asia, while there is no intergovernmental mechanism like the EU to foster platform worker protection, countries like Malaysia, Singapore and Thailand have started to review their labor laws,” he said.

Appropriate protection

The so-called gig economy, where workers provide services for customers, accounts for a third of the world’s working population by some estimates, with an increasing share via digital platforms such as ride-hailing and delivery apps.

The sector ballooned during COVID-19 lockdowns as people needed food and other goods delivered to their homes, and millions of newly jobless people looked for work. But many gig workers say they are forced to work long hours for low pay and few benefits.

With platforms generally classifying workers as independent contractors, half of online workers earned less than $2 an hour, and also lacked access to traditional employment benefits such as collective bargaining, insurance and work-related injury protection, according to the International Labor Organization.

Outside Asia too, governments are putting more pressure on platform companies to provide worker protections, with the U.S. Department of Labor in October unveiling a proposal that would make it harder for firms to treat workers as independent contractors.

The European Council — which estimates that the number of gig workers in the 27-country bloc will rise to 43 million in 2025 — this month proposed tougher rules for firms, including prohibiting algorithms from making important decisions.

Singapore’s Advisory Committee on Platform Workers was set up in September 2021 to look into ensuring “adequate financial protection in case of work injury,” improving housing and retirement benefits, and “enhancing representation.”

“Gig work will become ever more central in all economies … and the sustainability of the gig marketplace comes from the appropriate protection of platform workers,” Danny Quah, vice-chairman of the advisory committee, said in emailed comments.

The proposed rules will require legislative changes, and will be implemented “in a progressive manner to manage the impact on all stakeholders,” Tan See Leng, minister for manpower, said in parliament while accepting all 12 recommendations.

False dichotomy

For workers such as Alicia, the new rules mean app companies and drivers will need to contribute to the Central Provident Fund (CPF), which helps Singaporeans pay for their housing and retirement. This is optional for workers over the age of 30.

Firms will also have to provide work injury compensation insurance — with clear definitions of when a worker is considered to be “at work” — and to allow union representation.

However, the committee recommended that platform workers should not be classified as employees, as it considers flexibility a key feature of gig work.

“It is a false dichotomy to think that flexibility draws on the absence of protection, or to suppose that without protection the gig workplace gains flexibility,” Quah said.

“Instead, flexibility and protection go hand in hand.”

The Digital Platforms Industry Association, which represents Deliveroo, Grab and Foodpanda, said it “broadly welcomed” the recommendations, but “implementation would require significant work … to ensure that it is evenly paced to minimize disruption to merchants, consumers, and rider partners.”

“It will also be necessary to evaluate the overall impacts on the wider ecosystem,” a spokesperson said via email, noting that CPF contributions will likely mean lower take-home earnings for drivers and riders, and higher prices for consumers.

For Roy, a 33-year-old who drives for about four to six hours a day with Gojek, that is not a good outcome.

“It’s good to have these benefits, but what I and other drivers really need is more earnings from the platform,” he said, asking that his last name not be used.

“We already pay up to 20% in commission to the platform; if we are to lose even more money, where does that leave us?”