More gig economy drivers seeking permanent roles in logistics sector

DRIVERS drawn to the gig economy earlier in the pandemic are now looking for employee roles as the labour market improves, with many turning to the logistics sector – which is keen to welcome them.

The issue is that on the whole, the industry has a shortage of drivers, said Raymond Ong, associate professor in the Department of Civil and Environmental Engineering at the National University of Singapore (NUS). “And the reality is that if someone offers me good money, I will go,” said Dr Ong. “If the (logistics) industry is hungry, they will increase the salary or revenue per trip for drivers to attract them to move over.”

E-commerce service provider J&T Express, for instance, has been ramping up hiring in preparation for the year-end shopping festivities.

“We have seen a good mix of new hires with diverse backgrounds and experiences, including some who came from the gig economy. Some of them have joined us on a part-time basis in search of a higher salary that still offers flexible working hours. We have also seen some former gig workers seeking full-time employment with us for a long-term, stable working environment with opportunities for career growth,” said head of operations at J&T Express Singapore, Martin Tan.

According to data from non-executive jobs portal FastJobs, listings for jobs in the warehousing or logistics space rose 12 per cent year on year from 3,696 in Q2 2021 to 4,155 in Q2 2022. The median salary offered has increased 11 per cent year on year, from S$2,250 in Q2 2021 to S$2,500 in Q2 2022.

Belinder Kaur, manager of supply chain and logistics at recruitment firm Hays Singapore, noted that the rapid growth experienced by e-commerce in recent years has boosted the growth of the third party logistics market.

But even as companies work hard to expand their operations, there is a manpower gap, said Kwan Yit Wei, associate director of construction, property and engineering at Randstad Singapore.

“Many foreign employees had returned home during the border lockdown, which left a wide gap in the workforce. Many employers have also realised that even though it’s more difficult to attract and hire locals, the effort pays off as organisations will have a more sustainable workforce,” said Kwan.

Christopher Ong, managing director of DHL Express Singapore, has noticed a trend of workers from the gig economy joining DHL over the last 2 years.

“We started from practically nothing and now, I would say 1 in 10 applicants are from the gig economy,” he said.

Most of these applicants would have been working at their gig economy jobs for “a couple of years” and subsequently applied for jobs with similar skillsets, such as courier jobs at DHL, said Ong.

“What attracts them to DHL is they have a career path,” said Ong. He cited 2 examples of gig economy workers who joined DHL as couriers about 18 months ago. One was moved to the DHL South Asia Hub within Changi Airfreight Centre at Singapore Changi Airport, while the second has submitted an application to be a team leader.

FastJobs general manager for Singapore & Philippines Huishan Lim noted that there has indeed been a “slight uplift” in the number of users that indicated private-hire on their work experience on their portal.

“But, it’s against an overall increase in total applicants on a year-on-year basis, in particular with warehousing or logistics type of roles,” she said. The total number of applicants on FastJobs rose a whopping 57.3 per cent year on year to 28,435 in Q2 2022, up from 18,073 in Q2 2021.

Meanwhile, data from the Land Transport Authority shows a fall in both Taxi Driver’s Vocational Licenses (TDVL) and Private Hire Car Driver’s Vocational Licenses (PDVL).

The number of TDVL holders has dipped 3.6 per cent, from 98,141 in November 2020 to 94,576 in April 2022. The number of PDVL holders dropped 14.2 per cent, from 56,348 in November 2020 to 48,364 in April 2022.

NUS’s Dr Ong noted: “There were a lot of people in the gig economy because of Covid-19 so that was a one-off event. Now that the economy is picking up, there’s more incentive for those who turned to private hire during the Covid period to go back to the industry to work especially now that there are more jobs available.

“For taxis, (the contraction in numbers) is mainly because drivers are more elderly and there’s a natural attrition due to age and less people becoming taxi drivers.”

A Grab spokesperson said the shortage of drivers is an industry-wide trend, adding: “We have observed some driver-partners becoming inactive on our ride-hailing platform in the last 2 years due to the lack of demand for rides.”

The spokesperson added that the company has rolled out various incentive programmes, including a driver referral programme and a ‘co-pilot programme’ that matches a more experienced driver with a new driver to ensure the latter is well supported.

Last year, Gojek announced a reduction in service fees to 10 per cent on all rides, at least until the end of 2022, as well as enhanced far pick-up incentives to help reward driver-partners who travel further – such as to the airport – to pick up customers, said a Gojek spokesperson.

Both Grab and Gojek said on Jul 25 that they will extend existing fare hikes until Dec 31. Other taxi companies had earlier announced similar moves the week before. Both said the hikes – an extra 50 cents for all trips for Grab; 50 cents for trips less than 10km and 80 cents for those longer for Gojek – will go fully to the drivers.