While it is feasible to provide better support for delivery riders with legislation — such as medical and leave entitlements — this may lead to higher costs being passed down to consumers, according to economists in Singapore.

Earlier on Sunday (29 Aug), Prime Minister Lee Hsien Loong in his National Day Rally (NDR) speech expressed particular concern to a specific group of lower-wage workers (LWWs) – the delivery workers on online platforms like Foodpanda, Grab, and Deliveroo.

PM Lee explained that the online platforms determine which jobs are assigned to these workers and also manage how they perform, including imposing penalties and suspensions, yet delivery workers have no employment contracts with the online platforms.

As a result, these workers lack basic job protections like workplace injury compensation, union representation, and employer CPF, he added.

“More people are taking up this type of work, so this problem is growing. MOM [Ministry of Manpower] is studying it and will be doing consultations. We must address the issues to give these workers more secure futures,” said PM Lee.

Following his NDR 2021 speech, TODAY published an article on Monday (30 Aug) featuring a few economists in Singapore who implied that the change is possible with legislation, but this may lead to higher costs being passed down to consumers.

An associate professor of economics at the Singapore University of Social Sciences, Walter Theseira, said that the authorities may create a new legal category for delivery riders that require these workers to receive “some minimum levels of benefits” such as medical and leave entitlements.

He noted that although the provision of these benefits may be hard to keep track for delivery riders, they could be treated as part-time contract workers, in which the standard practice is to provide encashment of benefits such as leave.

For medical benefits, Assoc Prof Theseira said that it will be difficult for individual companies 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.

As such, he suggested requiring the platforms to pay “a little bit per job” into a centralised national benefits provider, adding that a worker’s eligibility and coverage will then depend on the amount of work they do 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,” Assoc Prof Theseira explained.

He also suggested requiring online platforms to collect a certain amount from every transaction and remit this sum directly to the delivery riders’ Central Provident Fund (CPF) account, so that they can have retirement and income security.

Meanwhile, head of treasury research and strategy at OCBC bank Selena Ling opined that “institutionalising the benefits” for delivery riders will come at a cost to companies and consumers.

Ms Ling highlighted that food and beverage (F&B) establishments may need to pay higher fees if online platforms have to continue paying delivery riders when they are sick or on leave, in which the extra costs will then be passed down to the consumer.

“Everything comes at a cost. If the cost gets passed to the end-consumers, is this something that they want to pay for?” she said.

However, economist Irvin Seah from DBS bank noted that changing the policy to grant benefits for gig workers may not be the solution to the root of the problem – which is that such roles, although do not require specialised skills, are being perceived as an attractive and viable career option by the workforce.

“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?” Mr Seah asked.

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

Speaking to TODAY, Grab said that it supports MOM’s study on strengthening protection for gig workers, adding that it has been exploring ways to improve protection for delivery riders, such as enhancing 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,” said the company.

Deliveroo, on the other hand, noted that it will continue to prioritise providing delivery riders with benefits, protection, as well as ensuring a safe working environment for them and the wider community.

The firm, which had also introduced free accident and injury insurance for riders in 2018, is willing to explore new ideas but it emphasized that “any such mechanism should respect the fact that riders are self-employed and overwhelmingly want to remain such”.

Foodpanda told TODAY that it invests heavily in various rider support programmes and provides subsidised insurance for its riders, but it highlighted that the bulk of its riders are “transient” and are only on the platform for “a brief period of time” as a supplemental gig.

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

Netizens are against the idea of passing down any extra cost to consumers

Penning their thoughts under the comments section of TODAY’s Facebook post, many netizens expressed that consumers should not bear any extra cost resulting from such legislation, given that the current costs are already expensive.

“Consumer are already paying inflated menu price + delivery fees, I can’t see how will this business work if it increase further in the long term. Most would rather eat out or tabao their own in the future. Only will End up with a lose-lose situation. How much can we increase?” said one Facebook user.

Another netizen commented: “Firstly, this isn’t a full-time job. Secondly, insurance matter is between the Employer-Employee relationship. Cost SHOULD NOT be fished out from consumers. If benefits have to be like an employed employee, then CPF, taxes etc must kick in too.”

One netizen highlighted that such a mechanism can potentially affect delivery riders’ earnings, adding that they may need to work longer hours.

Another netizen pointed out that such roles are meant to be part-time jobs, urging the Government to address the reasons why more people are taking up such works nowadays.