Grab will have sufficient time to prepare for benefits of gig workers

The government approved recommendations to provide insurance to workers.

When the Ministry of Manpower (MOM) approved the 12 recommendations to enhance working conditions of platform workers, companies like Grab, which has gig workers, will be entrusted to provide benefits of insurance, retirement and other benefits.

In a report, CGS-CIMB discussed such a move that will be a neutral effect for companies like Grab. It said Grab is prepared to implement the “impending changes, and the potential impact of this development has already been baked into Grab’s steady-state margin guidance.”

“The recommendations are in line with Grab’s commentaries during its Investor Day that ‘potential implementation of mandatory retirement benefits and insurance benefits will be carried out in a gradual and careful manner, at a level playing field for all platform players, so as to not damage the health of the marketplace,’” said CGS-CIMB.

Some of the key items of the recommendations are providing “insurance to gig workers to same level as employees in other sectors are covered under the Work Injury Compensation Act, the phased implementation of CPF contributions (over a 5-year period) for gig workers (compulsory for workers aged below 30 as of the first year of implementation, but on an opt-in basis for older workers), and stronger representation of gig workers.”

MOM said the recommendations will take effect gradually from the latter part of 2024 at the earliest, depending on the economic situation.