2016: A YEAR OF DISRUPTION

A year of disruption: From jobs to gigs

As the number of workers doing 'on-demand' work rises, more should be done to protect their rights

Disruptive trends hit the labour market hard this year, which saw the rise of what some have called the "gig economy" - where conventional, stable jobs are replaced by freelance, "on-demand" gigs.

Gigs used to be done mainly by freelancers such as plumbers, musicians and photographers. They are hired for an occasion and paid after the job. There is no certainty when the next job will come.

But such arrangements have since spread in a big way to other sectors, notably food delivery and transport (Deliveroo, Uber and Grab) and short-term home rentals (Airbnb).

A landmark study by the McKinsey Global Institute released two months ago found 162 million people in Europe and the United States - about 20 to 30 per cent of the working-age population - doing some form of independent work.

About 44 per cent of them do such work for their primary income. Some 30 per cent do so out of necessity, not choice.

 
 
 
 
 

There is no similar study in Singapore. Statistics on independent workers and the work they do are not readily available.

The Ministry of Manpower (MOM) tracks a category of what it calls "own account workers", or those who are self-employed and do not employ others. There were nearly 170,000 of them last year and the numbers have not fluctuated much for a decade.

But the number does not capture all independent workers. It includes the estimated 40,000 active taxi drivers who are tied to taxi companies, but may not include all sole proprietors who are private-hire car drivers.

Until officials start to collect and publish data on independent workers, it will be difficult to study and understand the impact of the gig economy here.

That said, anecdotal evidence suggests that the number of such workers is rising.

Uber and Grab reportedly have a combined fleet of about 25,000 private-hire cars in Singapore. This amount puts them almost on a par with the 27,500 taxis from six companies plying the roads.

And online portal Freelancer.com, which has some 80,000 freelancer users here, saw membership in Singapore grow by nearly 39 per cent in the past year.

Even as retrenchments rose and job vacancies fell in the tepid job market this year, food delivery jobs have emerged as a bright spot.

The earnings of food delivery riders have risen. It is unclear how many riders there are, but industry players say full-time riders can earn over $3,000 a month.

This is about a 50 per cent jump compared with MOM data which showed that the average gross wage of a delivery rider was $1,914 in June last year.

Foodpanda, one of the biggest players, has seen its delivery fleet surge to over 2,500 riders this year since it started building its fleet in March last year. Around 90 per cent of its riders are freelancers.

Consumers embrace having food delivered to their homes when they are hungry, personal drivers to ferry them when they need transport or freelance cleaners to spruce up their homes for Christmas and New Year parties.

Employers welcome the trend too. As the economy softens, firms turn to freelancers to cut costs.

But while consumers and employers cheer, workers would be less enamoured. Independent workers do not have a stable job, do not earn a fixed salary, do not enjoy leave or medical benefits, and do not come under the protection of labour laws.

Deputy Prime Minister Tharman Shanmugaratnam has said: "I'm not yet a fan of the gig economy." He told a forum in October: "Some of the people in what is described as the gig economy are those who've got no choice because they can't get a full-time job, they can't get a secure job."

If we accept that the gig economy is here to stay, there are at least three things we can do to protect the swelling ranks of gig workers.

First, we need to re-examine existing labour laws, which are based on an employer-employee relationship. The Employment Act, which spells out basic work terms and conditions, already covers part-time workers. If we accept that freelancers perform the same services as part-time workers, there is no reason why they should be denied the same legal rights and protections.

In the construction sector, the main contractor is responsible for the safety of all workers on site, including those hired by subcontractors. The same principle of equal protection for workers can apply to other sectors.

Second, extend the social safety net to cover such workers.

For example, those who want to look for full-time or part-time work to supplement what they earn in between gigs can be supported by government-run job centres. Such job placement centres can help them find gigs and these workers can also get help saving for retirement.

Third, prepare workers in stable jobs for the reality that such jobs may disappear.

Admittedly, this is easier said than done. We cannot prepare workers in advance for future gigs, but we can equip them with basic core skills such as computer literacy (since demand and supply of such gigs are likely to be app- and Web-based) and customer service.

Singapore's unions are ahead of the curve. There is already a department in the National Trades Union Congress (NTUC) dedicated to the needs of freelance workers and helping them.

The NTUC has also set up an association for private-hire drivers this year. It is 500-strong and growing.

It is time the rest of the labour market get ready for this continued wave of disruption too.

Correction note: This story has been edited to clarify that the figure of nearly 170,000 includes the estimated 40,000 active taxi drivers who are tied to taxi companies, but may not include all sole proprietors who are private-hire car drivers.

A version of this article appeared in the print edition of The Straits Times on December 27, 2016, with the headline 'From jobs to gigs'. Print Edition | Subscribe