SINGAPORE: A recent Channel News Asia story reported that there has been a 12% increase in personal loan applications from private-hire drivers and delivery riders over the past eight quarters. Such a report was based on an account by an online loan-matching service, Lendela, which said that many of these workers are taking loans to cover everyday expenses, including debt consolidation.
Grab’s Partner Cash Advance programme, introduced in 2023, provides loans of up to S$10,000 to its drivers, but even with this support, many workers are still falling behind on their bills.
Living paycheck to paycheck
Private-hire drivers and delivery riders are particularly vulnerable to financial stress, with a significant number of them experiencing an expense-to-income ratio of over 100%, according to a DBS study.
With monthly earnings of S$1,500 to S$2,500, rising fuel costs, car rentals, and daily expenses leave little room for savings. For many, a single unexpected event—like a medical emergency—can lead to crippling debt.
Mohamed Norfirdaus, a delivery rider diagnosed with colon cancer, was forced to take out loans to survive after being unable to work for nine months.
He mentioned that he has been searching for alternative employment for a while but has been unable to find a role that accommodates his condition, as he frequently needs to make trips to the washroom to manage his stoma bag.
His only previous work experience is as a lifeguard. “With my stoma bag, it’s nearly impossible to work as a lifeguard again. I wouldn’t be able to go into the water to save someone,” he explained.
Flexibility in work is one of the main reasons why gig workers are drawn to this type of employment.
Mr Ng, a delivery rider, shared: “Many people who do deliveries are older, often caregivers who need the flexibility to care for both their children and their parents, so they cannot commit to full-time jobs.”
According to statistics from MOM, about 69% of gig workers whose main source of income comes from platform work are aged 50 and above.
The Lendela report also noted a steady increase in loan applications from platform workers aged 50 to 69, rising from 11.2% in 2022 to 21.1% in 2024.
Additionally, Assoc Prof Theseira highlighted that platform work tends to offer “low returns to experience and skill.”
“It wouldn’t be surprising if a long-term platform worker had worse prospects than a peer who has had employment utilising various skills and training, with opportunities for career progression and accomplishments,” he added.
Mr Peter Yeo, a 52-year-old food delivery rider with seven years of experience, emphasised the need for platforms to provide fairer compensation for workers who are increasingly working longer hours while earning less income.
The cycle of debt and unpredictable income
Debt collection agencies report a steady rise in platform workers defaulting on loans, often due to high living costs and unpredictable incomes. Platform workers are often forced into precarious financial situations, with little recourse beyond borrowing.
Experts warn that unless platform companies provide better pay and financial security, more gig workers could be pushed into unsustainable debt—or forced to leave gig work entirely.