Food deliverers making $7K a month?

A headline like this in the mainstream media will certainly trigger a lot of discussion online and offline. Many holding full time jobs may start complaining that they are underpaid. Others may consider becoming food delivery as a career. Before you start thinking this is a great deal, consider the following:

  • To make $7K a month doing food deliveries, you are probably working ~10-11hrs per day, rain or shine.
  • $7K is all you get – no CPF/pension, no leave, no medical benefits, no training/upgrading, etc. and no guarantee that you will get $7K every month.
  • There is no “career path”. You continue to do the same thing year in, year out. Some people say – that’s ok. It’s not different from being a driver.

When you do the detailed math, it works out to be about $21/hr. Since most companies pay food deliverers between $6.50-7.50 per order, you have to make 3 deliveries per hour. Hopefully these are located near to each other.

Should we encourage the young to pursue food delivery as a career? Well, let’s put it this way – it is an honest living. You get what you put in for an honest day’s work. If you want to rest, you just stop delivering and you don’t get paid. It’s a trade-off between stability and control over one’s time.

If a fast-food company pays its cashiers $5-7 per hour, those who are fit and able will likely join the food delivery team. They will likely be willing to trade-off the air-conditioning working environment for more than twice what they get. Will food delivery companies pay more over the years? Whether they will pay more will depend on whether consumers are willing to pay more for their delivery.

The government may be concerned that young people in this gig-economy will find difficulties sustaining their income as they grow older. They may also not be aligned to the value-added jobs that the economy is creating. But I like to believe that “water will find its own level”. If there is a demand for delivery and there is a shortage of people making delivery, consumers will have to pay for higher delivery costs, unless there is some innovation that totally removes the need for such last-mile delivery services. But let’s be clear – $7K per month is not sustainable. Demand for delivery services will drop when the lock down period is over.

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