Sir, the Platform Workers Bill is a comprehensive—even exhaustive—document, numbering some 234 pages, and addressing a range of legislative changes meant to enfold platform work better into the jobs landscape of our economy. It makes good-faith efforts to improve the rights and protections for gig workers, and for that reason, it has the support of the Workers’ Party.
Others have already spoken about the other aspects of the Bill, including enabling such workers to secure representation via an workers’ associations or union equivalents, along with accommodations for workplace health and safety. I will focus my remarks on how the Bill caters to retirement adequacy of such platform workers, which is the principal concern of Part 8 of the Bill.
The precarious economics of many platform economy workers
Let me begin with a quick sketch of the economics of the platform economy. Digitally-oriented business models have been with us for a long time now, of course, having risen to prominence in the run-up to the dot-com boom of the late 1990s.[1] But it was only after the bursting of that bubble that we saw the subsequent emergence of both sharing economy firms (such as Airbnb, Uber, and WeWork), along with the penetration of incumbent technology giants (like Amazon, Facebook, and Google) into such digital ecosystems—that has ushered in the current generation of platform economies.[2]
The digital economy is now massive, and will only continue to grow. Estimates suggest that, by 2028, it will grow from the current $12 trillion to $17 trillion worldwide, accounting for almost a fifth of all global output.[3] In Singapore, IMDA expects a comparable share of the digital economy in our GDP, with digital businesses outpacing the rate of growth of the overall economy.[4]
Yet the platform economy raises intimate issues of concern for workers. A recent study established that the largest platform companies have been able to churn out twice the growth, profits, and market capitalization than the largest old-school firms operating in the same business, all while doing so with half the number of workers.[5] What is worse, while some founders and employees at the top end—think of the thousands of well-remunerated tech professionals, not to mention tech billionaires like Jeff Bezos, Jack Ma, and Mark Zuckerberg—have benefited enormously from the platform economy, tens of thousands of others are barely eking by, on precarious driving, delivery, or paid-per-gig jobs.
The present Bill limits itself to a class of workers providing on-demand delivery and ride-hailing services, operating on digital platforms. This is, in my view, is an appropriate prioritization. After all, such workers reside in an awkward intersection of regular wage-earning employees—whose jobs afford sufficient structure for traditional labor protections—and the fully self-employed, who understand the risky tradeoffs of running one’s own shop, but get to enjoy the potentially large returns from business success, or freedom of being one’s own boss. Unlike the self-employed, most platform workers cannot decide on how much they charge, and many do not do gig work out of choice; they may be responding to unexpected job displacements, or an inability to secure more traditional employment.[6]
The new classification of platform workers that will result from Part 1 of the Bill helps ensure that workers in this intermediate no-man’s land will be extended proper labor protections. It is already somewhat belated, with jurisdictions such as the United Kingdom having recognized so-called “limb (b)” workers in 2021, and the state of California extended full employee classification to platform workers in 2019.[7] But better late than never, although I would hope that the Bill should also consider eventually extending the coverage of the First Schedule to another category of platform workers: those who contribute toward, and are paid for, their part in a crowdsourced task (otherwise known as crowdworkers).[8] This would include freelancers on Amazon Mechanical Turk or Fiverr, but also cleaners or handymen or performers that heavily rely on platforms to match themselves to work opportunities. Such individuals exhibit many of the same features of employment precarity that on-demand delivery and ride-hailing workers do.
Of course, the experiences of platform workers within this group may well differ, depending on their motivations for seeking work, and even the specific platforms on which they operate.[9] While some are reasonably well-off and choose platform work as a helpful supplement to their primary income,[10] most are on the lower end of the income scale,[11] and may suffer from significant income volatility,[12] resulting in higher levels of job anxiety.[13] Many have to go into debt to even get started on gig work.[14] This has led some observers to criticize the claims that platform work fosters a spirit of entrepreneurship as “utopian thinking”.[15]
The reality, instead, is that many employees engaged in platform work full-time live very vulnerable economic lives. The majority are bereft of health insurance or retirement plans,[16] or social protections, more generally.[17] The flexibility of gig work—often presented as a boon—is often a bane in reality, as workers often cease work once they have reached a daily target, which erodes their earnings capability.[18] Many are young[19]—since the higher starting salaries may prove irresistibly attractive, relative to the alternative—but with limited career upside, lifetime incomes often end up lower than with conventional careers. Absent stronger incentives, a majority would either completely to opt out of contributions toward CPF, or make only very minimal contributions,[20] to keep their take-home salaries high.
Preparing platform workers for retirement
As a result, many platform workers fail to squirrel enough money away to support themselves later in life. Yet there is some evidence that platform workers may actually favor mechanisms that can help them commit to increasing their savings,[21] although this is tempered by a concern over the possibility that their take-home pay would decrease as a result. This is why it is important to ensure that platform workers have access to a pension plan. In Singapore, this typically means enrolling in the cornerstone of our system of retirement provision, the CPF.
To be clear, the Workers’ Party has, in the past, offered measured critiques of the system.[22] Notwithstanding of these reservations, we believe that CPF goes some way toward providing for retirees during their sunset years, and hence has a role to play for platform workers, too.
Consequently, the Workers’ Party is in favor of the stipulations in the Bill that will encourage such workers to enroll into the system. The proposed Enhanced Platform Workers CPF Transition Support (Enhanced PCTS), embedded into the Fifth Schedule, certainly offers a welcome incentive to encourage participation in the higher-contribution Group A, at least up till 2028.[23] The Leader of the Opposition, Pritam Singh, has further suggested that the default be set as an opt out, rather than opt in, regime.
This has much to commend it. Behavioral scientists have documented how a bias toward the status quo, coupled with inertia, tends to lead individuals to stay with preselected defaults.[24] This has also been demonstrated, specifically, when it comes to saving behavior.[25] Hence, if we believe that it is truly beneficial for us to nudge platform workers toward greater saving for retirement, applying an opt-out default would be no less constraining on freedom of choice, while encouraging welfare-enhancing behavior.
That said, as my honorable friends Louis Chua and Gerald Giam have already pointed/will point out, the scheme may give rise to unintended consequences as well; platform companies may tweak their algorithms to deprioritize job allocations for those who are contributing more to CPF, or they may choose to blatantly reduce the salaries of those who sign onto the scheme. Here, I raise the possibility of another possible unintended consequence, related to how those under 30 years old are automatically enrolled in Group A.
While I can guess at the government’s motivation behind insisting that the young be automatically placed in Group A—it ensures that those who will benefit the most by starting their retirement saving early do so—this may be inadvertently lead to discrimination against their hiring, since they are now also more costly.[26] This may further exacerbate youth unemployment, which—like elsewhere in the world—is already more than twice as high as the adult unemployment rate.[27]
This concern has already been flagged by younger platform workers.[28] The counterargument that suggests that the number of workers not on the scheme are likely to be small—and hence discrimination isn’t possible since most workers would be covered—does not hold up to the data: only a fraction (around 7 percent) of platform workers are below 30 years of age. And the belief that such a discriminatory strategy would not hold up in the longer run does not address how a sizable group of youths could, nevertheless, face undue discrimination in the meantime.
Nor should we be content with the claim that younger workers—being fitter, more resolute, and efficient—are naturally more attractive hires. After all, we are well aware of the weaker bargaining power of employees with less experience in the workplace, which may well predispose them to accepting otherwise lower wages than they deserve.
One strategy to preclude this possibility—without throwing the baby of retirement adequacy out with the bathwater of potential discrimination—is to ensure that the impending Anti-Discrimination Bill—which, last we heard, is due to be debated in Parliament this year[29]—includes provisions that would make such unsavory practices illegal.[30]
Separately, one is also left to wonder what the government’s Plan B is, should Enhanced PCTS fail to deliver the sort of signup rates that we all hope for. After all, while the lock-in into Group A for older workers who exercise the CPF scheme option is assured by Clause 4(3) of the Fourth Schedule, such inevitability may well end up discouraging workers from signing up in the first place. These workers will nevertheless face retirement adequacy issues, and hence it strikes me as valuable to both monitor the rate of signup, as well as develop a strategy for raising participation, in the event that the Enhanced PCTS alone remains insufficient as an incentive.
Conclusion
I will close with a practical suggestion: for platform workers that do enroll in Group A workers, it would be useful for the government to work with platform providers themselves to ensure accurate reporting of earnings, in the same manner that employers are currently obliged to accurately declare salary information for wage-earning employees.
This may call for some automated transfer of aggregated monthly earnings data, since platform workers’ earnings are transactions-based. These data should, of course, also be open to audit.
[1] Abramson, B. (2005), Digital Phoenix: Why the Information Economy Collapsed and How It Will Rise Again, Cambridge: MIT Press.
[2] Kenny, M. & J. Zysman (2016), “The Rise of the Platform Economy,” Issues in Science and Technology 32(3): 61–9.
[3] O’Grady, M., I. Jacobs & D. Hoffman (2024), Global Digital Economy Forecast, 2023 To 2028, Cambridge: Forrester Research. Digital industries are not entirely synonymous with platform firms, of course, but of the 7 subindustries within the digital economy, most of them (digital intermediary platforms charging a fee; data and advertising-driven digital platforms; firms dependent on intermediary platforms; e-tailers; digital-only firms providing financial and insurance services; and other producers only operating digitally) are either purely or heavily platform-reliant.
[4] IMDA & LKYSPP (2023), Singapore Digital Economy Report 2023, Singapore: Infocomm Media Development Authority and National University of Singapore.
[5] Cusumano, M.A., A. Gawer & D.B. Yoffie (2019), The Business of Platforms: Strategy in the Age of Digital Competition, Innovation, and Power, New York: Harper Business.
[6] Abraham, K.G., J.C. Haltiwanger, K. Sandusky & J.R. Spletzer (2021), “Measuring the Gig Economy:
Current Knowledge and Open Issues,” in C. Corrado, J. Haskel, J. Miranda & D. Sichel (eds.), Measuring and Accounting for Innovation in the Twenty-First Century, Chicago: University of Chicago Press, pp. 257–98. In Singapore, a little less than half would move out of food delivery if better opportunities presented themselves. See Matthew, M., W.L. Thian, C. Lee, S. Zainuddin & M. Chong (2022), “Current Realities, Social Protection and Future Needs of Platform Food Delivery Workers in Singapore,” IPS Working Paper 47, Singapore: Institute of Policy Studies.
[7] This piece of legislation was subsequently overturned by referendum (Proposition 22), and upheld after a lengthy court battle that concluded in July 2024. Yet while Californian platform workers will now be treated as independent contractors, they are nevertheless entitled to minimum wages, health insurance, and workman’s compensation. See Tan, E. (2024), “In Win for Uber and Lyft, California Court Upholds Gig-Worker Proposition,” New York Times, Jul 25.
[8] Jacques, J.T. & P.O. Kristensson (2019), “Crowdworker Economics in the Gig Economy,” Proceedings of the 2019 CHI Conference on Human Factors in Computing Systems 391: 1–10.
[9] Schor, J.B., W. Attwood-Charles, N. Cansoy, I. Ladegaard & R. Wengronowitz (2020), “Dependence and Precarity in the Platform Economy,” Theory and Society 49: 833–61.
[10] Hoang, L., G. Blank & A. Quan-Haase (2020), “The Winners and the Losers of the Platform Economy: Who Participates?”, Information, Communication & Society 23: 681–700.
[11] Katz, L.F. & A.B. Krueger (2019), “Understanding Trends in Alternative Work Arrangements in the United States,” RSF: The Russell Sage Foundation Journal of the Social Sciences 5(5): 132–46. For Singapore, the Comprehensive Labor Force Survey reports that, in 2023, platform work was the primary source of income for 90 percent of such workers, earning a median income of $2,000 a month full-time, which is well below the lowest quintile threshold of $2,826. See MOM (2023), Labour Force in Singapore, Singapore: Ministry of Manpower.
[12] Kaine, S. & E. Josserand (2019), “The Organization and Experience of Work in the Gig Economy,” Journal of Industrial Relations 61(4): 479–501.
[13] Berger, T., C.B. Frey, G. Levin & S.R. Danda (2019), “Uber Happy? Work and Well-Being in the ‘Gig Economy’,” Economic Policy 34: 429–77.
[14] Buchak, G. (2024), “Financing the Gig Economy,” Journal of Finance 79(1): 219–56.
[15] Vallas, S. & J.B. Schor (2020), “What Do Platforms Do? Understanding the Gig Economy,” Annual Review of Sociology 46: 273–94.
[16] Mas, A. & A. Pallais (2020), “Alternative Work Arrangements,” Annual Review of Economics 12: 631–58.
[17] This include protection gaps in income, health, retirement, and assets. See Schanz, K-W. (2022), “Gig Economy Work: Mind the Protection Gaps,” in P.S. Khanna & G. Bhardwaj (eds.), Templatizing Micro-Pensions for Africa, Singapore: Africa Pension Supervisors Association and PinBox Solutions, pp. 360–403.
[18] Allon, G., M. C. Cohen & W.P. Sinchaisri (2023), “The Impact of Behavioral and Economic Drivers on Gig Economy Workers,” Manufacturing & Service Operations Management 25(4): 1376–93.
[19] Farrell, D., F. Greig & A. Hamoudi (2018), The Online Platform Economy in 2018: Drivers, Workers, Sellers, and Lessors, New York: JPMorgan Chase Institute.
[20] Currently, 28 percent do not contribute at all, while another 22 and 16 percent contribute less than 5 and 10 percent, respectively. See Matthew et al. (2022), op. cit.
[21] Gruber, J. (2022), “Designing Benefits for Platform Workers,” NBER Working Paper 29736, Cambridge: National Bureau of Economic Research.
[22] These include proposing adjustments to the computation method for OA rates to better take inflation into account; how entangling CPF with HDB payments risk conflating conflicting objectives of retirement adequacy and housing affordability; and lowering the age for payout eligibility to 60 years, so that it is delinked from the retirement age. See, respectively, Hansard (2022) 95(66): Aug 2; Hansard (2023) 95(81): Feb 6; and Hansard (2015) 93(8): Mar 3 and Hansard (2019) 94(98): Mar 5.
[23] The scheme will provide a 100 percent offset of the increase in CPF contributions in 2025, decreasing by 25 percent every year through 2028. See MOM (2024), “Implementation Date of Platform Worker Protections and Enhancements to Platform Workers CPF Transition Support,” Media Factsheet, Aug 22.
[24] Jachimowicz, J.M., S. Duncan, E.U. Weber & E.J. Johnson (2019), “When and Why Defaults Influence Decisions: A Meta-Analysis of Default Effects,” Behavioral Public Policy 3(2): 159–86; Thaler, R.H., C.R. Sunstein & J.P. Balz (2013), “Choice Architecture,” in E. Shafir (ed.), The Behavioral Foundations of Public Policy, Princeton: Princeton University Press, pp. 428–39.
[25] Thaler, R.H. & S. Benartzi (2004), “Save More Tomorrow™: Using Behavioral Economics to Increase Employee Saving,” Journal of Political Economy 112(S1): S164–87.
[26] This isn’t likely to be as big a problem for those who only opt into the scheme after they are hired, since their choice to do so will not be evident at the time of employment.
[27] As of 2023, the youth unemployment rate was 4.1 percent for those aged 15 to 24 years, more than twice as high as the adult unemployment rate of 1.9 percent that same year. By way of comparison, the OECD averages for the two groups are 10.9 and 4.1 percent, respectively.
[28] Ng, A. (2023), “Singapore Platform Workers Flag Concerns of Possible Discrimination Over CPF Proposals,” CNA, Feb 3.
[29] Yeo, R. (2023), “Anti-Discrimination Legislation Set for 2024 Introduction After Release of Finalised Framework,” Business Times, Aug 4.
[30] Practically, these amendments would include non-discrimination clauses already in the Bill, such as those outlined in the Clauses 22 through 77H of the Sixth Schedule.