SINGAPORE - A shocking new report reveals that the rising cost of living has driven a staggering 12% increase in personal loan applications among private-hire drivers and delivery riders over the past two years. This troubling trend, highlighted by Channel News Asia in collaboration with loan-matching service Lendela, indicates that many gig workers are resorting to borrowing just to cover their basic living expenses and pay off existing debts.

Despite the introduction of Grab's Partner Cash Advance program in 2023, which offers loans of up to S$10,000 to drivers, many are still struggling to keep up with their bills. The financial burden remains overwhelming, with many workers living paycheck to paycheck.

The Harsh Reality of Gig Work

A recent study by DBS has uncovered that a significant portion of private-hire drivers and delivery riders face an expense-to-income ratio exceeding 100%. Earning anywhere from S$1,500 to S$2,500 monthly, these workers are grappling with soaring fuel prices, high car rental fees, and daily living costs that leave them with almost no ability to save. The result? A single unforeseen incident, such as a medical emergency, can plunge them into dire debt.

Take Mohamed Norfirdaus, a delivery rider battling colon cancer. After being unable to work for nine months, he found himself drowning in debt, forced to take out loans to stay afloat. With limited job opportunities that suit his health needs—especially given the constraints of managing a stoma bag—his previous role as a lifeguard is now out of reach. “I wouldn’t be able to go into the water to save someone,” he said, highlighting the cruel irony faced by many in his situation.

For many gig workers, the flexibility that comes with platform work is a double-edged sword. Mr. Ng, another delivery rider, reflects on the demographic that occupies this sector: “Many delivery workers are older caregivers who cannot commit to full-time jobs because they need to care for both their children and parents.”

Age and Experience in Gig Work

According to statistics from the Ministry of Manpower (MOM), around 69% of gig workers whose primary income comes from platform work are aged 50 or above. The urgency of their financial plight is reflected in Lendela’s report, which shows a notable increase in loan applications from workers aged 50 to 69, surging from 11.2% in 2022 to a staggering 21.1% in 2024.

Academics such as Assoc Prof Theseira have outlined alarming trends in the gig economy, stating that platform work “tends to offer low returns to experience and skill.” This reality suggests that long-term gig workers may face worse financial prospects than their peers who have had traditional employment with room for career advancement and skill development.

Veteran food delivery rider, Mr. Peter Yeo, 52, voiced a common sentiment among his peers: the need for fairer compensation. “We are working longer hours but earning less. It has become increasingly challenging,” he asserted.

The Debt Trap Depthens

As the cost of living continues its relentless rise, debt collection agencies report a worrying uptick in defaults among platform workers struggling to manage loans. The volatile income associated with gig work only exacerbates the situation, leaving workers with limited options but to turn to borrowing.

Experts warn that without substantial improvements in compensation and financial stability from gig economy platforms, countless workers may find themselves trapped in a vicious cycle of debt—or worse, forced to abandon gig work entirely in search of more stable employment opportunities.

Is the gig economy sustainable? Only time will tell, but unless urgent action is taken, the future looks bleak for these vulnerable workers.