SINGAPORE: A recent report reveals a staggering 12% increase in personal loan applications from private-hire drivers and delivery riders over the past eight quarters, highlighting the growing financial strain on gig workers in Singapore. This alarming finding, sourced from the loan-matching service Lendela, indicates that many platform workers are resorting to loans just to cover everyday expenses and manage existing debts.

Despite initiatives like Grab’s Partner Cash Advance program, which offers loans up to S$10,000, many drivers still struggle to meet their financial obligations. The high costs of living continue to outpace earnings, leaving these workers trapped in a vicious cycle of debt and financial stress.

Living Paycheck to Paycheck: A Harrowing Reality

Many private-hire drivers and delivery riders are edging dangerously close to financial brinksmanship. A study conducted by DBS highlights that a significant portion of these workers experiences an expense-to-income ratio exceeding 100%. With monthly earnings ranging from S$1,500 to S$2,500, rising costs of fuel, car rentals, and daily expenditures allow little room for saving. One unexpected expense—like a medical emergency—can easily spiral into overwhelming debt.

Take Mohamed Norfirdaus, a delivery rider diagnosed with colon cancer. After a nine-month hiatus from work due to his illness, he was left with no choice but to take out loans just to survive. “I’ve been looking for other jobs,” he lamented, “but my condition makes it extremely challenging.” His only prior experience as a lifeguard is no longer feasible due to his medical needs. “With my stoma bag, it’s impossible for me to return to lifeguarding,” he explained, shedding light on the stark realities faced by those in the gig economy.

The Lure of Flexibility: A Double-Edged Sword

The allure of flexible work is a key draw for many gig workers. Mr. Ng, another delivery rider, noted that many individuals in this line of work are often older caregivers. “They need jobs that allow them to balance taking care of both children and aging parents,” he said, which makes full-time commitments tough.

Statistics from the Ministry of Manpower show that approximately 69% of gig workers primarily engaged in platform work are aged 50 and above. Moreover, Lendela reports a significant spike in loan applications from platform workers aged 50 to 69—rising from 11.2% in 2022 to an eye-watering 21.1% in 2024.

Assoc Prof Theseira pointed out a troubling trend: platform work often offers limited recognition and compensation for experience and skills. “A long-term platform worker may have worse job prospects compared to peers with diverse skills and opportunities for advancement,” he noted.

Desperate Times Call for Fair Compensation

Peter Yeo, a 52-year-old food delivery rider with seven years in the industry, stressed the necessity for platforms to provide more equitable pay. “Workers are toiling longer hours for diminishing income,” he explained.

Issues of financial stability are becoming increasingly dire, with debt collection agencies reporting a consistent rise in defaults among platform workers. The combination of soaring living costs and unpredictable earnings is creating a precarious environment, forcing many into debt.

Experts are sounding the alarm that without reforms in pay structures and financial security measures from platform companies, more gig workers may face dire consequences—either falling deeper into debt or being pushed out of the gig economy entirely.

As the cost of living continues to climb, the plight of platform workers in Singapore reflects growing concerns over the sustainability of gig work. Can the industry adapt before it's too late?