Introduction

SINGAPORE: Recent reports reveal that the escalating cost of living has significantly impacted platform workers, leading to a staggering 12% surge in personal loan applications among private-hire drivers and delivery riders over the last eight quarters. This trend, highlighted by the online loan-matching service Lendela, underscores the plight of these workers who increasingly rely on loans to meet their daily expenses and consolidate debts.

Financial Instability

Despite the introduction of Grab's Partner Cash Advance program in 2023, which offers loans up to S$10,000 to drivers, many still find themselves unable to keep up with their financial obligations. The struggle to navigate rising fuel costs, car rentals, and basic living expenses leaves little room for savings and thrusts numerous workers into a cycle of financial instability.

Living Paycheck to Paycheck

Living paycheck to paycheck is the grim reality for many in the gig economy. A DBS study revealed that a significant portion of private-hire drivers and delivery riders maintain an expense-to-income ratio exceeding 100%. Most earn between S$1,500 and S$2,500 monthly, yet an unforeseen event—like a medical emergency—can quickly spiral into debilitating debt.

Personal Stories

Consider the case of Mohamed Norfirdaus, a delivery rider recently diagnosed with colon cancer. His inability to work for nine months due to treatment has compelled him to take out loans just to survive. “I’ve been looking for a new job, but my medical condition makes it challenging to find work that accommodates my needs,” he explained, highlighting the difficulties faced by others in similar situations.

Flexibility in Gig Work

Flexibility remains a primary attraction to gig work, especially for older individuals and caregivers. Mr. Ng, a delivery rider, noted, “Many gig workers are older caregivers who need to balance caring for children and parents, making it hard to take on full-time roles.” Shockingly, data from the Ministry of Manpower reveals that around 69% of gig workers earning their main income through platform work are aged 50 and above.

Loan Applications Surge

The issue is further compounded by a noticeable uptick in loan applications from this demographic, with figures soaring from 11.2% in 2022 to 21.1% in 2024, as noted by Lendela. Experts have pointed out that platform work often yields low returns, failing to leverage workers' skills and experience, exacerbating the financial strain on older workers.

Need for Fair Compensation

Peter Yeo, a 52-year-old food delivery rider with seven years in the industry, stressed the critical need for platforms to offer fairer compensation. He criticized the trend of longer hours with diminishing income, emphasizing that many workers are stretched thin as they try to make ends meet.

Rise in Defaults

With mounting debt, collection agencies report an alarming rise in platform workers defaulting on loans. Many face precarious financial situations with few alternatives but to borrow, while growing numbers are pushed to the brink of leaving gig work altogether. Experts warn that unless platform companies prioritize improving pay and financial security, the cycle of debt and unpredictable income will continue to plague the gig economy.

Conclusion

The ongoing crisis not only threatens the livelihoods of these workers but also raises larger questions about the sustainability of the gig economy itself. Without immediate intervention and structural changes, thousands of vulnerable workers could face a harsh financial reality that extends beyond mere inconvenience—potentially altering their lives forever.