Introduction
Mr Speaker, own account workers have historically been a key feature of our labour markets, with various occupations ranging from real estate and insurance agents, F&B stall owners at our hawker centres to taxi drivers. In recent years, the rise of digital platforms alongside the proliferation of smartphones and the mobile internet led to the emergence of a different class of own account workers; those who may not entirely be in control of their own business, such as Private Hire Car (PHC) drivers and food delivery riders, working for the ubiquitous multi-billion dollar platform companies we see today.
Many of our Sengkang residents work for these platforms in the gig economy too, and I have spoken to quite a number of them during my Meet-The-People Sessions, house visits and our shopping malls where many of them are waiting for their next delivery pick-up. While the gig economy is often hailed for its flexibility and autonomy, the reality is that with ever-increasing app sophistication and as these platforms grow in scale, the gig economy has evolved in ways that increasingly disadvantage its workers, and such work is often arduous, risky and poorly remunerated. The appeal of flexibility and the promise of independence lies a reality fraught with inadequate protections and financial insecurity.
As these issues become increasingly apparent, there is an urgent need for legislation to safeguard the welfare and rights of our platform workers. This Bill, in essence, implements the recommendations brought forth by the Advisory Committee on Platform Workers to help improve the working conditions and livelihoods of our platform workers; and I believe nobody will disagree with the urgency of addressing some of the pain points faced by our platform workers.
There remains much work to be done however, and my speech will focus on three areas which I believe we can and should do better, to ensure the fundamental sustainability of our platform workers’ livelihood in the long term.
CPF contributions – employers should step up too
First, under the new section 8A, platform operators must now pay CPF contributions to its platform workers, with platform workers’ themselves too contributing the equivalent of their “employee contributions” through a deduction from their remuneration.
Chief among platform workers’ concerns is of course the reduction in take-home salaries, which can be a sizable impact considering the already low average salaries earned by our workers trying their best to feed their families.
Granted, in an announcement on 22 August 2024, the MOM announced that the Platform Workers CPF Transition Support (PCTS) will be enhanced, such that there will be a 100% offset of the platform worker’s share of increase in CPF OA and SA contributions in 2025, before tapering down gradually from 2026 and ceasing in 2029.
However, are we being too lenient with the platform companies themselves, in not getting them to better support their own platform workers, whom they rely on day in day out to keep their platforms running?
Platform companies’ CPF contributions start at 3.5% for workers across all age groups from 1 January 2025, before progressing increasing each year up to a steady state from 1 January 2029 onwards. Today, resident regular primary platform workers aged 60 and over represent the highest percentage of workers by age group at 34.7%, with those aged 50-59 representing the next highest percentage at 30.2%.
Using the example of a worker aged between 65 and 70 who is somehow still working and not retired, the difference between the initial 3.5% company contribution rate and the steady state contribution rate of 9% is minimal; assuming he earns the median income of $2,000 as a delivery worker, the difference is a mere $110 a month. Even if we assume the worker is aged 35 or below, meaning a company contribution rate of 17%, the difference is again just $270 a month. Surely that is not too much to ask of our platform companies?
I fully agree with what SMS Koh Poh Koon said in response to Parliamentary Questions in April 2022, where he noted that while mandatory CPF contributions will increase platform companies’ business costs, I quote: “it is no worse off than any other company employing workers in a similar sector, such as in logistics and transport. Besides, platform companies already contribute CPF for their management executives and administrative staff today.”
While we want to phase in the workers’ contributions over time given take-home pay concerns, can we not accelerate platform companies’ contributions or even mandating that they start contributing their full share of CPF contributions immediately from January 2025?
Fair wages for our workers – reconsider the Local Qualifying Salary
Second, I wish to reiterate a point I made during the 2022 Committee of Supply debates, where I hope that we can pay a fair wage for our platform workers and ensure that they earn at least our minimum wage equivalent, the local qualifying salary. While this was at $9.00 per hour back when I made the speech, this has now been raised to $10.50 per hour based on the latest LQS as announced in Budget 2024.
According to the Ministry of Manpower, the median gross monthly income for Private-hire car drivers, delivery workers, and taxi drivers was $2,500, $2,000, and $1,500 respectively.
Meanwhile, the 2017/2018 Household Expenditure Survey lists the median household expenditure as $4,906. A DBS survey also suggested that food delivery riders spend $1.12 for every dollar they earn.
While such jobs are advertised as being “flexible” and “ad-hoc”, many platform workers work long hours to ensure that they have sufficient income, with an IPS survey reporting that approximately 40% of the food delivery riders surveyed worked over 44 hours a week.
Today, platform workers have to grapple with ever-changing incentive schemes, weather conditions and other factors beyond their control. Allowing them to earn a fair wage that is in line with minimum wage standards goes a long way in providing some degree of support in alleviating the income stability that our platform workers face.
While the nature of the work differs from platform to platform, as long as the principle is abided to, I believe the implementation difficulties are not insurmountable. In China for example, one of the largest if not the largest market for platform workers, its Ministry of Human Resources and Social Security (MHRSS) released additional guidelines earlier this year, stipulating how operators of delivery, ride-hailing, transport, and household services platforms should ensure that workers’ salaries match local minimum wages, and provide them with time off. This is a further extension of regulations published back in 2021, that requires operators to meet minimum wage standards and provide social security access to their workers.
Algorithm committee to combat a trust deficit?
Third, perhaps underlying many of the issues faced by our platform workers is a trust deficit between the powerful multi-billion international technology platforms, and the thousands of individual platform workers who feel beholden to the platforms they count on to put food on the table for themselves, and not just the customers they deliver to.
Our platform workers’ livelihoods are thus at the mercy of the technology and algorithms behind these platforms, which can sometimes feel like a faceless and merciless machine. One of the residents I met earlier, who cycles to make food deliveries, was even wondering if his low scores led to him being deployed to “lousy jobs” which involve a long ride to pick up the food, and subsequently deliver them. With the move to introduce CPF contributions for platform workers, there could be concerns, unfounded or otherwise, that algorithms might be programmed to assign more jobs to workers who do not opt in and could better contribute to the platforms’ bottom-line!
Perhaps in addition to formal union representation, the Government can consider the formation of an “Algorithm Committee”, to give platform workers confidence that there is fairness and transparency in how the platforms operate. Such a committee was introduced in Spain for example, as part of their first Collective Agreement for Platform Workers, and in China, the authorities have also introduced guidelines since 2021, highlighting that the “strictest algorithm” should not be used as an assessment requirement and delivery time requirements should be appropriately relaxed.
Conclusion
To conclude Mr Speaker, rather than confining our support for platform workers within the existing framework, I hope the additional points I raised can be given due consideration for future legislative amendments to better enhance the sustainability of our platform workers’ livelihoods.
Notwithstanding my clarifications, I support the Bill.