Singapore gig workers face rising debt due to costs

Rising living costs are pushing private-hire drivers and delivery riders in Singapore deeper into debt. A recent report shows that applications for personal loans among these workers have risen by 12% over the past two years. Many of these workers are using loans to pay for everyday expenses or to consolidate existing debt. Grab, a popular ride-hailing service, has launched a Partner Cash Advance program that offers loans up to S$10,000 to its drivers. However, even with this assistance, many still struggle to keep up with their bills. Drivers and riders often live paycheck to paycheck. A DBS study found that some have an expense-to-income ratio over 100%. With monthly earnings between S$1,500 and S$2,500, rising costs for fuel and car rentals leave little for savings. Unexpected events, such as medical emergencies, can lead to significant debt. One delivery rider, Mohamed Norfirdaus, faces a tough situation after being diagnosed with colon cancer. He had to take out loans after he could not work for nine months. Finding a new job that suits his health needs has proven difficult. Many gig workers choose this type of employment for its flexibility. They often juggle caregiving responsibilities and cannot commit to full-time jobs. About 69% of gig workers rely on platform work as their main income source and are aged 50 or older. As the demand for loans increases, experts warn that the job market for gig workers often offers low returns for their experience and skills. Many long-term platform workers may find worse job prospects compared to those who have had more traditional employment paths. There has been a rise in defaults on loans among platform workers, driven by high living costs and unpredictable incomes. Financial experts urge platforms to improve pay and job security to prevent workers from sinking further into debt. Without changes, more gig workers may be forced to leave the industry altogether.