Private-car hire drivers surge by over 10,000 as pandemic pushes gig, contract workers to 228,000

Singapore

WHILE the recent increase in contract workers amid the Covid-19 pandemic may not necessarily be sustained as the labour market normalises, the longer-term trend is likely here to stay, said analysts.

In 2020, the share of own-account workers - self-employed workers who are not employers - among working residents rose to 9.7 per cent, the highest in the last decade and up from 8.8 per cent in 2019, figures from the Ministry of Manpower (MOM) showed.

A survey by the international ADP Research Institute released earlier in June found that the Covid-19 pandemic has increased interest in contract work, including in Singapore.

The survey covered 32,471 workers in 17 countries, with 1,906 in Singapore. Among the respondents here, nearly half were either much more or somewhat more interested in contract work in light of Covid-19.

Those aged 25 to 34 were most keen, with 18 per cent being much more interested and 31.7 per cent being somewhat more interested.

National University of Singapore professor Sumit Agarwal identified both demand- and supply-side reasons for the rise in gig workers. Safe management restrictions, such as last year's "circuit breaker", created demand for services such as food delivery.

In ADP's survey, the top reason given for being more interested in contract work was that respondents believed there were new opportunities, cited by a third of respondents.

Meanwhile, the pandemic caused a rise in unemployed persons seeking alternative means of staying in work, said Prof Agarwal. For some such workers, their self-employed stint will be only temporary.

"But some of them might say, 'I love the flexibility and the freedom'", he added.

Of some 228,200 own-account workers in 2020, 190,800 or 84 per cent were doing so by choice, "mostly because they enjoyed the flexibility and freedom associated with own-account work", according to the MOM's Labour Force in Singapore report.

But the number of workers engaging in own-account work on a "non-preferred basis" rose to 37,400, up from 21,500 in 2019, which the ministry said reflected weaker labour market conditions.

In 2020, private-hire car drivers became the most common occupation among regular primary own-account workers, with 34,400 doing so.

Of these, 70 per cent were non-tertiary educated, and 57 per cent were aged 50 and over. Most of the increase in private-hire car drivers over the year - with 10,700 more than in 2019 - also came from those demographics, said the MOM.

The next most common occupations were taxi drivers; insurance sales agents or brokers; and real estate agents.

Whether the increase will persist beyond the pandemic is an open question.

Said Lee Kuan Yew School of Public Policy associate professor in practice Terence Ho: "Only when economic and labour market conditions stabilise will we be able to discern whether this is the beginning of a longer-term trend increase in own account work."

In 2020, MOM data showed slight increases at either end of the age distribution, with 9 per cent of resident regular primary own-account workers aged below 30 - up from 8 per cent in 2019 - and 24.8 per cent aged 60 and over, up from 22.5 per cent.

Some of these younger workers would be waiting for further studies or full-time jobs to begin, while some older workers would have taken it up after retirement or retrenchment as employees, noted Prof Ho.

"So there is a life cycle element to this," he said.

But other analysts see a mindset shift too. In the ADP survey, of Singapore respondents aged 18 to 24, only 54.1 per cent said they would prefer to work as a full-time permanent employee, compared to a national average of 75.6 per cent.

Noting the rise in overtime in regular jobs, ADP president for Asia Pacific Peter Hadley said: "For the generation entering the workforce amid these conditions, it is not surprising that they would prioritise flexibility and being able to work on their own terms as much as possible."

While workers' preferences may change as they age, younger generations have different expectations, he added: "Whether younger workers continue to show increasing preference for alternative employment will depend on how well employers can anticipate and meet their needs."

While demand for own-account workers such as delivery drivers may ebb as Covid-19 restrictions loosen, the trend will endure, said Prof Agarwal.

In the future, he sees more scope for gig work in personal services such as hairdressing, manicures and yoga.

The gig economy acts as a shock absorber, letting labour move between own-account work and traditional employment when there are shocks, he added. "This allows us to be more flexible as a labour force."

With remote working here to stay, Institute of Policy Studies senior research fellow Faizal Yahya expects that own-account workers will be found in most types of employment, including PMET (professional, manager, executive, technician) roles.

"Without the legacies of fixed term employment in their consciousness, younger own-account workers that are mobile, have in-demand skills and able to have a continuous stream of work might not see the need to settle into more fixed term employment," he said.