CONGRATULATIONS to Uber Malaysia and the Employees Provident Fund (EPF) for signing a memorandum of understanding on Oct 19 to enable Uber drivers to participate in the 1Malaysia Retirement Savings Scheme (SP1M).
Although SP1M was introduced in 2010, the response from 13.7 million self-employed individuals and freelancers has been lukewarm. Sadly, the majority of them have no safety net, unlike the 6.8 million active EPF contributors and 1.7 million government servants who are covered under the public pension scheme.
However, from June 1, Uber, Grab and taxi drivers must be registered with the Social Security Organisation and covered under the Employment Injury Scheme, and are given until the end of the year to comply.
Although contributions to SP1M is voluntary, it would be wise for Uber drivers to do so, as weeks can swiftly turn into months or years, especially when other job or business opportunities do not materialise. Uber drivers can opt for automatic deductions and decide on the amount they wish to contribute.
It should be noted that EPF had consistently paid dividends that are much higher than interest rates offered by banks for savings or fixed deposit account, and the amount can be easily withdrawn partially or in full after reaching 55.
Uber drivers are generally much younger and an early start would find their savings multiplying over the years.
And for many Malaysians, their money in EPF is all the savings they have.
As such, the collaboration between Uber and EPF is a huge step forward for the welfare of e-hailing drivers, as part of the credit card payments made by passengers or incentives given to drivers can be channelled to their EPF accounts.