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NDR 2021: Delivery riders hope for medical, other benefits but economists say this could mean consumers pay more

SINGAPORE — When food delivery rider M Ali fractured his wrist in an accident while making a delivery on his motorbike last year, he had to take 14 days of medical leave.

The harsh realities of being a gig worker, such as a food delivery rider, should be explained to the young, academics told a symposium on March 29, 2023.

The harsh realities of being a gig worker, such as a food delivery rider, should be explained to the young, academics told a symposium on March 29, 2023.

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  • Prime Minister Lee Hsien Loong said in his National Day Rally speech that delivery workers lack basic job protection that most employees have
  • The Ministry of Manpower has formed an advisory committee to study how to better support these workers
  • Food delivery riders told TODAY that they hope for more medical benefits and to be paid on their days off
  • However, not all agreed on making CPF contributions
  • Economists said that change is possible with legislation, but that it may mean consumers have to pay more

 

 

SINGAPORE — When food delivery rider M Ali fractured his wrist in an accident while making a delivery on his motorbike last year, he had to take 14 days of medical leave.

If not for an insurance policy for which he pays S$40 a month, he would have lost two weeks of earnings. He said that his food delivery firm, Grab, provides free insurance for all its delivery riders, but at that time, it did not cover medical leave.

Under his own insurance policy, the 60-year-old received S$200 for every day that he could not work.

Since July 1 this year, Grab has expanded its insurance policy to also include coverage for prolonged medical leave, among other enhancements. It is free for the rider and based on the amount of deliveries he or she completes.

Now fully covered, Mr Ali said that this protection should be consistent for all delivery workers on online platforms, so that they do not need to fork out their own insurance premiums.

“If we have a work-related accident and can produce a medical certificate (MC) or doctor’s letter, it would be better if (we) could submit the claims as if we were working full-time for a company,” he said.

Some of Mr Ali’s concerns were shared by other delivery workers interviewed by TODAY. They were worried about medical coverage as well as the lack of other employment rights.

Economists contacted by TODAY said that while it is possible to increase the benefits that delivery riders receive, this will lead to higher costs being passed down to the consumer.

The welfare of delivery riders was among the issues raised by Prime Minister Lee Hsien Loong in his National Day Rally address on Sunday (Aug 29). Mr Lee said that these gig workers have no employment contracts with online service providers such as Foodpanda, Grab and Deliveroo.

Thus, they lack basic job protection that most employees have, such as workplace injury compensation, union representation and employers’ contribution to the workers’ Central Provident Fund (CPF).

He also noted that more people have been taking up this type of work, especially during the Covid-19 pandemic.

The Ministry of Manpower (MOM) has formed an advisory committee to study how to support self-employed persons who work for online platforms.

In a Facebook post on Monday, Dr Koh Poh Koon, Senior Minister of State for Manpower, said that the committee “will look into strengthening protections for this group of workers, such as improving their retirement and housing adequacy, ensuring adequate work injury compensation and allowing union representation”.

“This is to ensure a fairer and more balanced relationship between platforms and platform workers.”

MEDICAL COVERAGE, OFF DAYS, CPF AMONG THE CONCERNS OF DELIVERY RIDERS

Another food delivery rider, who wanted to be known only as Mr Rey, said that another sore point for riders is that they do not get paid on days off, unlike full-time employees.

As a result, most riders such as himself will take only the occasional day off, so that they can earn more.

“When riders get exhausted, they need a two- to three-day break,” the 32-year-old said. “(But) they take just a one-day break, and the next couple of weeks, they may get into an accident because they are so tired.”

Another food delivery rider, who gave his name as just Mr Zhang, said that because there is no employment contract, delivery firms can have the flexibility to set prices and shut riders out of the platform “without needing to explain their actions”.

“(Delivery companies) need to have a collective agreement on how they operate, how much they need to pay employees, how they will support them,” the 38-year-old said. “They have to negotiate with a union… put something on paper that keeps them accountable.”

Mr Ali welcomed Mr Lee’s recognition that delivery riders may have little savings when they retire, since they do not contribute to CPF during their gig work. CPF is a mandatory social security savings scheme for Singapore residents, funded by contributions from employers and employees. 

Though he is already 60 years old, Mr Ali has no money in his CPF account because he had worked in contract roles for most of his life. Before his stint as a delivery rider, he worked as a courier for 22 years. He wishes that he had contributed more regularly to his CPF when he was younger.

“Now I don’t have any CPF, so I have to work for the next few years,” he said. “I worry for the youngsters (delivering food). They may not have any CPF in the future.”

However, Mr Rey said that not all young delivery riders would necessarily want to contribute to CPF because it would leave them with less take-home pay.

“Help in terms of better medical subsidies, paid days off and vehicle insurance would be better.”

'SOMEONE HAS TO PAY'

The economists who spoke to TODAY said that although it would be feasible to grant gig workers more protection, this might come at the cost of businesses and consumers.

Associate professor of economics Walter Theseira from the Singapore University of Social Sciences said it is possible that the authorities will create a different legal category for such workers.

This new category may require these workers to receive “some minimum level of benefits” such as medical and leave entitlements.

Though the provision of these benefits may be hard to keep track for delivery workers, they could be treated as part-time contract workers, where the standard practice is to provide encashment of benefits such as leave.

For medical benefits, Assoc Prof Theseira said that individual companies will be hard-pressed to provide the same benefits for all their workers. For instance, firms cannot expect to pay for the full benefits to a worker who does only one job a month.

The solution, he said, would be to ensure platforms all pay “a little bit per job” into a centralised, national benefits provider.

Then, a worker’s eligibility and coverage will depend on how much they are doing over all the different platforms.

“So, if you split your work between platforms, you still get the same benefits as you would if you are 100 per cent on one,” he said.

For retirement and income security, contributions to CPF could be made mandatory for these workers.

One way to achieve this could be to require online platforms to collect a certain amount from every transaction and remit this sum directly to the gig worker’s CPF account, Assoc Prof Theseira said.

While these processes are feasible, Ms Selena Ling, head of treasury research and strategy at OCBC bank, said that “institutionalising the benefits” will come at a cost to companies and consumers.

For instance, if online platforms have to continue paying workers when they are sick or on leave, this may result in increased platform fees for food-and-beverage establishments, which may then pass the extra costs on to the consumer.

“There’s no free lunch. Everything comes at a cost,” she said. “If the cost gets passed to the end-consumers, is this something that they want to pay for?”

Mr Lee laid out in his speech on Sunday that the cost of higher salaries for lower-wage workers will have to be shared.

Employers may have to absorb part of the higher wage costs, but they will still have to pass on some of the costs to their customers.

“So all of us, as consumers, must also chip in,” Mr Lee said.

Policy can be tweaked to grant these gig workers more benefits and protection, but economist Irvin Seah from DBS bank said that this may not be tackling the root of the problem, which is that the workforce sees such roles — which do not require specialised skills — as an attractive and viable career option.

“If we pride ourselves as having one of the best education systems in the world, then why do we have younger workers taking up these professions?

“The solution is to offer even better jobs, so what they learn in school can be put to good use.”

WHAT DELIVERY COMPANIES SAY

In response to TODAY’s queries, Grab said that it supports MOM’s study on strengthening protections for gig workers.

It said that it has continually looked at ways to improve the lot of delivery riders such as its move to enhance coverage limits for personal accident insurance and prolonged medical leave insurance.

“A coordinated approach with common standards across the industry could help ensure that they receive similar protections even if they move between companies,” Grab said.

Deliveroo said that it “will continue to prioritise providing our riders with benefits, protection and ensuring a safe working environment for them and the wider community”.

For example, it had introduced free accident and injury insurance for riders in 2018.

While the firm is open to new ideas, it said that “any such mechanism should respect the fact that riders are self-employed and overwhelmingly want to remain such”.

Foodpanda said that it invests heavily in various rider support programmes and provides subsidised insurance for its riders.

“The reality is, the bulk of our riders are transient and are on the platform for a brief period of time as a supplemental gig,” it said, adding that it can serve as a “lifeline for retrenched workers”.

“The gig economy is unique because of its flexibility and freedom for riders to choose what arrangement works for them.”

Related topics

NDR 2021 delivery riders MOM cpf Lee Hsien Loong Deliveroo Foodpanda Grab

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