Law to protect drivers raises cost concerns
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Law to protect drivers raises cost concerns

Online food delivery platforms fearing the consequences if draft bill is greenlighted

A Grab Food delivery driver in Bangkok. (Photo: Somchai Poomlard)
A Grab Food delivery driver in Bangkok. (Photo: Somchai Poomlard)

A draft bill meant to protect independent workers and improve their quality of life has unsettled online food delivery platforms as they are concerned about higher costs and having to pass the burden onto customers.

The bill is being deliberated by the Council of State, the government's legal arm.

One of the bill's key elements is to set up a fund aimed at raising freelancers' quality of life and protecting them.

Money in the fund can be used for various purposes, including sponsoring accident and health insurance and welfare for independent workers, and providing them with loans.

According to the legislation, freelancers and their employers will have to make contributions to the fund every time wages are paid. The contribution rate is set at 3% of wages, according to the latest version of the draft bill.

Employers are required to make deductions from freelancers' wages to pay for workers' contributions.

The legislation is also meant to support a complaints process for freelancers and make settlements.

The bill's public hearings run until the end of this month, according to the Council of State.


Isriya Paireepairit, vice-president for public affairs at food delivery operator Line Man Wongnai, said the nature of the industry is complicated and related to many people, including customers, restaurants, and driver partners.

Any new laws that cause imbalance and favour one side will increase the burden on customers, he said.

"The platforms are facing losses and if there is a law to increase costs for them, they may need to increase delivery costs with the burden being passed onto customers," said Mr Isriya, adding that some operators may have to exit the market.

Once there are fewer operators, consumers will have less choice and restaurants will have lower revenues, while a smaller number of jobs will be available for drivers, he said.

The bill allows the establishment of a group of freelancers by at least five members to receive benefits in line with the law's stipulations. At least 15 groups can form an independent labour organisation.

Accordingly, at least 75 drivers can form an independent organisation to issue a complaint and seek talks with the platforms, said Mr Isriya.

This group, however, cannot represent the hundreds of thousands of other drivers who provide the services, he said.

He said that although the bill has good intentions, there was still no clear indication on how the fund can be managed to support workers' welfare.


Worachat Luxkanalode, country head of online food delivery platform Grab Thailand, said the platform has worked closely with gig workers and the company recognised the importance of the draft freelance labour act.

"Our partners in Thailand are covered by free platform-wide accident insurance coverage, online training support, and have access to lending services," he said.

The company has seen the draft bill and engaged with the Labour Ministry and the Office of the Council of State to provide its input and share best practices from other countries that the firm operates in, he said.

"We believe it is important to take the diverse needs of freelancers into consideration. For example, our partners work with us for a variety of reasons: some prefer the option of flexible working arrangements, while others seek to earn an extra income," Mr Worachat said.

"We also believe any regulatory adjustments or new frameworks should balance freelancers' protection as well as the interests of other stakeholders in the ecosystem.

"This is to prevent unintended consequences that may harm this group of freelancers we seek to protect, including the risk of higher operational costs and implementation requirements which could impact the availability of freelance jobs and consumer demand, and as a result shrink freelancers' earning opportunities."

He said new regulations should be slowly implemented to help all stakeholders, including freelancers, adjust to the changes and prevent any shocks to the ecosystem.


Mongkol Yangngam, an operator of the Freedom Rider Union Facebook group, said the bill provides a channel to receive complaints from food delivery drivers.

The bill will also see the formation of freelancer inspectors who can examine working conditions and step in to settle disputes, he said.

If a driver faces suspension by a platform, the case will be examined within seven days, and if they did nothing wrong they would be entitled to compensation, he said.

"For the draft, freelancers can sue the platforms through the Labour Court without the need to pay for lawyers, unlike the existing system where they need to rely on the Civil Court when they encounter unfair contracts," he said.

The draft bill is important for freelancers and provides more control on super-apps' online platforms, Mr Mongkol said.

However, he said the legislation is still too vague on how the government will use the fund to improve freelancers' quality of life.

"The fund should collect contributions only from platforms, not from drivers or freelancers," he said. "The fund should only be used to compensate freelancers when their employers violate the contracts or close down their business."


Suthikorn Kingkaew, a digital economy pundit, agreed that the bill provides better welfare and protection for freelancers.

However, he said that in any law, there needed to be a balancing of the benefits of all stakeholders in the ecosystem.

If the platforms face more cost burdens, they are likely to pass the cost to customers and restaurants, he said.

"The act needs to balance all the players in the ecosystem to reduce the negative impact on the platforms, which subsequently have to pass the cost onto restaurants and customers," he said.

He added that the law should have a longer grace period than four months, as stipulated in the bill.

"This is quite a new issue in the sharing economy and we should have a sandbox or time to prepare," said Mr Suthikorn.

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