Ride & delivery businesses sprouting social problems

The issue of whether or not a person working for Grab/Deliveroo/Uber etc is an employee or not is an important matter and also a very blurred one since day 1 of these companies.

Throughout the world, Uber has squirmed around the responsibilities of being an employer by hiding under the cloak of technology. They don’t pay benefits, they don’t provide security, the under-pay where they can, they u-turn on their payment policies at will, they erode the future employability of a worker, they don’t care about the social problems that come up (as with the PMDs lately) and as we are beginning to see, they are turning to milking the very people that work for them.

In the United Kingdom today, Uber got stripped of its licence to operate for failing to ensure passenger safety.

It is clear that these guys don’t care about society that they operate in.

Take the PMDs for example: these guys are at the forefront of the PMD problem in Singapore. They possess the technology, the control over the workers, the supply and demand…they are in absolute control over the social problems. Say for example the issue of speeding: these companies can very easily track the speed of a PMD on delivery (there are plenty of apps available that do just that, even your GPS will tell you if you’re speeding), it would be effortless for them to implement a penalisation policy for errant deliverymen.  

They also don’t care about their workers.

Or the Private Hires, which has been discussed to death. It increased the costs of COEs, eroded the takings of taxi drivers, when they introduced Hitch, it eroded the share of their very own PHV drivers themselves. When their KPIs have been met, the gimmicky payments that led to the appearance of good income were u-turned on.

And yesterday, Grab announced an “Upfront Cash Programme”, it allows selected food delivery partners and drivers to take an advance on their pay, and return it in weekly instalments. After a cash advance amount is granted, the driver can then choose their repayment duration, up to half a year. For now, they consider it a “salary advance” that does not come with interest . 

This does not mean it is interest free. When drivers get on the programme, they are charged a one-time administrative fee derived from a percentage of the amount they take out. Advances offered are subject to admin charges that go to as high as 8%. Using an $8900 advance for example, Grab could be earning $712 (8% of $8,900) in admin fees charged to the driver.

To Grab, this is an amazing deal – their money is made up-front…and the income is almost guaranteed. To the “borrower”, he doesn’t care about the 8%…cause he’ll mentally write it off when he gets the money. 

There are pertinent questions at hand:

  • What if driers/riders want out (such as when they fall seriously ill), but still have an outstanding loan that they cannot service? 
  • What if they want to work for another delivery company? 
  • How do they make “salary advances”, when their riders are not considered “staff”? 

The last point is important – these companies should not be allowed to frame their riders/drivers as “workers” or “partners” whenever it is deemed suitable for them. By framing their service as an “advance”, that’s a step towards acknowledging the riders are actually staff. 

There are no two ways around it – either it is an unsecured loan, or it is an advancement to a staff.

One of the test of employment, is the control test – how much control does the company have over its workers? These riders are required to don the company’s uniform, use company branded paraphernalia, identify as the company when they ring your doorbell and when they are doing deliveries, they will not have the opportunity to do work for other vendors. Now with the loan/advancement, riders will be obliged to deliver exclusively for Grab. 

In California legislators approved a landmark bill in September 2019 that requires companies like Uber and Lyft to treat contract workers as employees, a move that could reshape the gig economy and that adds fuel to a years long debate over whether the nature of work has become too insecure.

This should be applied in Singapore as well. There ought to be clear lines and this is where law and policy can solve the problem. If companies like Grab wants to behave like an employer, then they ought to come out and bear the responsibilities at the same time. Pay CPF, pay for benefits, buy insurance, allow for sufficient rest and so on.

Mr Zainal Sapari, the deputy chairman of the Government Parliamentary Committee of Manpower, raised his concerns on the financial status of the drivers/riders: “… borrowers may find themselves in financial distress (if) they are unable to repay their (cash advance) and find themselves in debt.”

“While the programme might give workers in need of cash a better alternative to borrowing from moneylenders, they should also be very careful as it could make it difficult for them to find alternative employment”, Mr Zainal said. “I hope Grab does not use this scheme as a way to retain or bind their workers to continue working as their rider or driver”.

Labour MP Ang Hin Kee, executive adviser to the National Private Hire Vehicles Association, said the association will “step in to see how it can assist drivers if we notice unintended consequences where drivers are burdened”.

So there we have it – if it is truly just an unsecured loan, then the company should behave like it and be subject to the same laws, protection and principals that bind money lenders and other such businesses. 

It is time these social sharing companies bear social responsibilities as well. 

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