Introduction
Mr Deputy Speaker, the Platform Workers Bill comes to the House on the back of the recommendations of the Advisory Committee on Platform Workers, recommendations which were approved by the Government in 2022. The Committee’s recommendations sought to strengthen protections for platform workers in three areas: adequate financial protection in case of work injury through the Work Injury Compensation Framework provided by WICA, improved housing and retirement adequacy through CPF contributions, and finally, enhanced representation for platform workers. I will first speak on the platform workers space in general, and then on the higher prices for consumers that will most inevitably arise from the legislative changes effected by this Bill.
The second part of my speech will focus on specific queries on the introduction of CPF. Finally, I will end with a few questions on WICA for platform workers and the expectations platform workers ought to have of associations that would bargain for them.
The Platform Worker Space
Before I speak on the substantive Bill, it is important to give an overview of the platform workers space and the incomes of our platform workers. In 2023, there were 70,500 platform workers who formed 2.9% of the labour force. The platform industry and how it is regulated, is also diverse. For example, ride-hailing is far more regulated than food delivery, which is comparatively unregulated.
Another significant question concerning platform workers is whether they earn most of their income from platform work, or if such work merely supplements what they earn from their full-time jobs. In a survey done as part of a 2022 Institute of Policy Studies inquiry on platform workers, 46% of respondents earned their income solely from food delivery, while another 27% earned income solely from platform work, including food delivery.
MOM reported that the median gross monthly income of full-time platform-related occupations was $2,000 in 2023, unchanged from 2022. For a better understanding of each sub-category of platform workers, this figure needs to be parsed further so we can understand the median gross monthly income of each category of platform worker as listed by MOM, namely delivery workers, taxi drivers and private hire drivers.
I hope the Ministry can provide this information so we can have an acute understanding of the income situation affecting specific type of platform work. With the cost of living biting Singaporeans at all levels, especially those of lower income, the earnings of most platform workers are precarious.
This view is reinforced by a 2023 DBS Bank study, which showed that platform workers are spending more than they earn and have to tap into their savings as they try to cope with the cost of living. In 2022, the expense-to-income ratio was 107%. This rose in 2023, to 112%. Arising from this, the savings of platform workers fell to 1.7 months worth of expenses in May 2023, compared to 1.9 months a year before.
This figure of 1.7 months is well below that of DBS Bank’s median retail customer, who has savings of 3.5 months’ worth of expenses. It is also well below the 12 months of savings recommended by DBS Bank’s Head of Financial Planning Literacy for those with an unstable income stream. Quite simply, many of our platform workers are potentially one major unexpected medical bill or even car repair away from exhausting their savings and sinking into real financial hardship.
The changes proposed by this Bill are aimed at helping platform workers by addressing their income and health-related insecurities. For these reasons, the Workers’ Party supports this Bill, as it seeks to advance regulatory changes that will ultimately better-serve the interests of platform workers.
Higher Prices to support Platform Workers
This House understands, of course, that the changes provided by this Bill must be paid for by someone. For now, there is little clarity on how much of the higher costs will be absorbed by the platform companies. But the Bill will doubtless usher in a period of overall higher prices for customers of platform services.
At a platform workers’ dialogue session in 2023, Senior Minister of State Koh Poh Koon remarked, “All the surveys we have done, showed that Singaporeans are prepared to pay up to 10% more to support platform workers.”
However, a survey conducted in the first-half of 2022, with a sample size of 2,000 respondents by the then-Ministry of Communications and Information (MCI) on how much consumers were willing to pay to facilitate better protections for platform workers, revealed more nuanced findings.
The MCI survey noted that four in five consumers were prepared to pay more for food delivery or ride-hailing services if the monies went to better support platform workers. Four in 10 respondents said that they were willing to pay up to 3% more, while three in 10 said that they were willing to pay 4 to 5% more. One consumer said that she was willing to pay a little extra, provided that the increase in costs were transparent and clearly went towards worker protection.
A different survey in September 2022 of 570 respondents found that nine in 10 were prepared to pay more if the monies went towards initiatives to better support platform workers.
Minister, through you, Mr Deputy Speaker, in view of the survey threshold and tolerance of Singaporeans for price rises for platform services arising from this Bill, how much does the Minister anticipate prices to increase by and, how will this be equitably spread between consumers, platforms and platform workers? Specifically, after the implementation of the full CPF amount and WICA, are prices for users of platform services expected to rise by 5% or more, or will it breach the 10% mentioned by Senior Minister of State Koh?
Mr Deputy Speaker, this is not a mere technical question, but one I expect has been carefully considered by the tripartite partners, in view of the long period of deliberation, after the Advisory Committee on Platform Workers made its recommendations. Should the price increase be too high for consumers, one cannot rule out the prospect of a demand shock that causes consumers to recoil and reduce overall demand for platform services. If that were to happen, platform workers could find themselves with less work and even lower incomes.
In addition, does the Minister expect platform companies to reveal how much of their anticipated price increases are accrued to the CPF and WICA amendments envisaged by this Bill? Or are the algorithms of the platform companies expected to accommodate the increase in prices, with the public unclear about the extent of the price rise that is devoted towards better security for our platform workers? The latter scenario may of course incentivise the prospect of profiteering in the name of regulatory compliance.
The next part of my speech covers questions on the preparations, assumptions and scenarios related to these new protections for workers, which are being brought to this House almost two years after the original recommendations of the Advisory Committee on Platform Workers.
CPF Contributions for Platform Workers
I will first speak on the compulsory CPF contributions for platform workers aged below 30, with an opt-in regime for platform workers above the age of 30.
In April 2022, I asked Senior Minister of State Koh about the number of platform workers who contribute to their CPF accounts on their own accord. While the Senior Minister of State did not have the data on hand, it was assessed that only about 45% of platform workers made some contribution to their MediSave accounts.
It is not surprising that most platform workers do not contribute to their CPF accounts. Workers are very concerned about take-home pay. Anything that could reduce that amount is viewed with apprehension as it affects daily life.
At a platform workers’ dialogue session on 3 February 2023 involving about 120 workers, several workers raised their fears on whether the recommendations suggested by the Advisory Committee on Platform Workers would result in higher costs for platforms, which would then be passed on to workers, to the detriment of their take-home pay.
One worker said, “I hope that it will not be the cost all (passed) over to us, (but) it will be spread across consumers, platforms and ourselves. At the end of the day, if you just say only and, when you implement, the cost come back to us, we are the ones paying the 17%.” He was referring to the 17% rate for employers’ CPF contributions.
Another worker alleged that the payment rate of the platforms had been decreasing since the announcement of the measures of the Advisory Committee on Platform Workers were made and asked, “How can the Government ensure that the platforms eventually don’t give us the burden?”
What is clear is that, platform workers are concerned about lower take-home income should platform companies extract the employers’ contribution of CPF by adjusting the algorithm, thereby forcing take-home wages downwards. The workers’ concerns are in line with the public demand that the anticipated increase in the cost of platform services goes towards helping platform workers.
I have a few queries for the Minister on the CPF-related portion of this Bill.
First, with an opt-in age of 30, most platform workers could choose not to participate. Could the Minister share the rationale and thinking of why it agreed to the opt-in age of 30, in view of the larger policy objective of addressing housing needs and retirement adequacy of platform workers?
Secondly, for workers who do not opt-in to CPF, will they receive the platform companies’ share of the CPF contribution in cash?
Thirdly, based on 2023 Ministry of Manpower data, the median age of resident regular primary platform workers was in the mid-fifties. Only 8.4% of such workers were aged 30 and below – 8.4%. Could the Minister please tell us why the Ministry did not pursue an opt-out system, instead of an opt-in regime for those above 30?
Opt-out systems, from a behavioural perspective, are far more effective in securing participation to address housing and retirement needs while yet giving choice to platform workers. Platform workers aged 30 to 39 form 10.8% of the total and those aged 40 to 49% form 18.8% of the total. In view of the life cycle of the CPF system and lower contributions received in one’s later years, the early working years are important age brackets, during which, our platform workers can grow their CPF accounts to reap the benefits of compound interest in good time.
Considering that full-time employees are not even given the choice of either opting in or opting out, an opt-out system for platform workers does not seem inappropriate or unfair and would be far more effective in getting platform workers to seriously consider taking up CPF.
Fourthly, some platform workers are worried about whether they would be worse off if they opt into CPF as provided by this Bill. They are concerned that it would create a perverse incentive on the part of platform companies to assign more jobs to workers who are not making CPF contributions so as to lower the companies’ wage expenditure. The Government needs to address this very real fear of our platform workers.
Senior Minister of State Koh has previously stated that platform companies must not discriminate when assigning work and the Ministry of Manpower would investigate any unfair practices. Without more, my view is that this would be difficult, if not impossible, to prove discrimination as the evidence would lie in the word or, precisely, the algorithms of the platform companies.
It was reported that the Tripartite Workgroup on Representation for Platform Workers (TWG) had drawn up some negotiating principles with the platform companies, for example, (a) that parties would be mutually committed to the operators’ business success and workers’ welfare; and (b) platform operators need not divulge their proprietary information or negotiate on commercially-sensitive matters.
Can the Minister tell us how the Ministry will investigate platform companies? How would the Ministry undertake investigations without access to the platform companies’ top-secret algorithms, or does the Bill open the algorithms to scrutiny if discriminatory practices are alleged?
Fifthly, under the Bill, the CPF contribution rates for workers and platforms would be increased by a few percentage points each year, until it reaches 20% from platform workers and 17% from platforms later in this decade. To address the fears of workers about falling incomes arising from the imposition of CPF, the Government announced the Platform Workers CPF Transition Support (PCTS) at the Committee of Supply Debates in March last year. The Government would contribute 75% of the workers’ contribution in the first year and this would reduce to 25% in 2027.
A few weeks ago, the Government announced that it would totally offset the first contribution for the year 2025 by 100%, thus subsidising the workers’ entire CPF contribution next year. Although, it must be noted that this would be the kickoff year where the workers’ contribution is the lowest, at 2.5%. Can I ask the Minister, in the interest of fiscal transparency, what is the difference between the new fiscal allocation for the PCTS compared to the original PCTS announcement?
WICA for Platform Workers
I move on to my queries on work injury compensation. I have two broad queries in this regard.
First, it would be important for this House to understand the deliberations of the work injury compensation implementation network for platform companies and workers, on the number of insurers – which I believe was briefly mentioned by the Senior Minister of State in his opening speech – and the cost of premiums to platform companies since there is a legitimate concern that added cost for platform companies with regard to WICA, are likely to be passed on to the consumer.
Have there been difficulties in pricing WICA for platform workers to date and do platform companies have a competitive range of quotes to consider? How many insurers are prepared to offer WICA, particularly since the product is new and the class of platform workers to be covered is far smaller than WICA for employees? With the implementation date for WICA for platform workers a mere three months away, are platform companies aware of how much WICA will cost them, so as to be ready to roll out coverage for platform workers by 1 January 2025?
Separately, Mr Speaker, from the platform workers’ perspective, for better work injury compensation, there must be a clear claims and compensation process for platform workers which is also easily understood. It was made known in July 2023 that the compensation from income lost due to work injuries would be based on the worker’s average actual earnings in the 90 days before the injury.
Sir, the reality on the ground is that many platform workers receive platform work across many apps or what is sometimes referred to as multi-homing. We see this all the time with platform workers toggling between several devices hosting different platform apps.
Could the Minister please tell us whether a WICA claim would cover the 90-day average across all the platform companies a platform worker is registered with and works for no matter the number of jobs accepted over this period? This is important because should a claim only be tied to the platform company, through which a platform worker accepted an assignment when injured, the WICA coverage for the worker may turn out to be very low.
Another point where clarification is needed, is the time frame during which a platform worker is considered at work. For work injury compensation purposes, a platform worker is considered at-work during the pick-up and drop-off of passengers or items, including when they are headed to their vehicles or bikes. At least this is what I understood from the brochure that was circulated by the Senior Minister of State just now.
This means that the eligibility window for work injury claims opens when the platform worker accepts a job through their app and ends when they head to their vehicles or bicycles after finishing delivery. Would there be scope to look at how WICA would apply to the completion of a food delivery job?
Usually undertaken by platform workers on motorcycles or bicycles, the risk profile of such platform workers differs considerably from platform workers who provide ride-hailing services. Intuitively, the injuries sustained from even apparently minor accidents like brushes or side swipes involving two-wheelers can be severe, debilitating and, every so often, fatal.
Can WICA for platform workers accommodate and extend greater protection for our most vulnerable workers? For example, can there be coverage if a food delivery rider completes a job, is in transit on the way home after a food delivery and, God forbids, gets involved in some serious accident?
I believe there is some scope for reviewing the applicability of WICA for food delivery riders and ride-hail platform workers differently, to better protect more vulnerable workers. This is worth consideration precisely because of the unconventional deployment of WICA in the ordinary sense, which is commonly extended to those traditionally classified as employees only. I hope the Ministry can look into this.
Separately, in a Business Times article dated 13 July 2023, it was reported that a ride-hailing driver had a specific query on whether the WICA coverage would extend to platform workers who get into an accident while waiting for the app to assign new jobs. There was no clarity on this point in the article, so it would be helpful if the Senior Minister of State can address this point in the House, too.
Before moving on from this section, the incorporation of WICA for platform workers by way of this Bill does not mean that platform companies have been leaving workers in the lurch. Foodpanda has extended skills upgrading schemes for its workers. A few companies, such as Gojek, offer subsidised premiums if workers take up private insurance. Grab has been providing drivers and delivery partners prolonged medical leave insurance.
However, the varied nature of the platform space and, by extension, the varied and different coverage for work injuries suffered by our workers, means that WICA is necessary to ensure better and consistent basic protection for our most vulnerable workers. To that extent, I agree completely with the Senior Minister of State’s explanation on WICA for platform workers.
Representation for Workers
Finally, an important prong of the changes envisaged by the Bill is representation. As iterated earlier, the tripartite discussions that preceded the Bill acknowledged that the business secrets of platform companies, such as the operational details of their matching algorithms, would be respected.
I believe many people in and out of this House would have heard platform workers speak of riders or drivers allegedly receiving notice of a job in the vicinity, while another driver or rider may not receive the same notice. Naturally, this raises concerns of discriminatory allocation.
Unfortunately, these very algorithms that determine allocation are driven by the business strategies of the platform companies and one can understand that they may be trade secrets. While the House must respect the liberty of private enterprise to the extent possible, equally, it is important for platform companies to both proactively explain as well as publicise to their workers how important decisions, such as job allocation, performance assessment of workers and rates, are decided. A balance has to be struck between respecting business secrecy on one hand and the legitimate concerns of workers on the other.
Ultimately, any new status quo must better level the playing field between platform workers and platform companies to ensure that workers’ rights are protected. I would also like to ask the Minister, if representation as effected by the Bill could co-exist with the prospect of platform workers sharing their data with an association.
In the UK, a non-profit entity called WorkerInfoExchange helps platform workers access and gain insight from data collected from them at work, with a view to tilting the balance away from big platforms by collecting and pooling the data of platform workers to help them demand fairer conditions. Can the Senior Minister of State confirm if this Bill envisages a platform work association representing platform workers operating in a similar way, given there is an understanding that platform companies will not be expected to reveal the inner workings of their algorithms?
If representation delivers a more level playing field for workers and information, asymmetries between workers and companies are reduced in a real way, more platform workers are likely to be assisted directly, where representation carries weight and bargaining power. This may be an important incentive to get platform workers to seek better representation. Such incentives are needed, given that a survey carried out by Grab, Deliveroo and Foodpanda revealed that 55% of food delivery workers said they are unwilling to pay any fees for representation, suggesting a lack of understanding at what representation can offer or a lack of belief of how representation can benefit them in concrete terms.
Conclusion
To conclude, Sir, the success of this Bill for the Singaporean public will turn on how reasonable the anticipated price rises of platform services will be after the Bill becomes law, and whether the increase is equitably distributed between consumers, platforms and workers – bearing in mind that nothing stops any company or service provider from capitalising on significant regulatory changes to profiteer or socialise costs more than it should.
While the Bill represents an improvement in social security and fairer working conditions for our platform workers, its effectiveness hinges on resolving ambiguities and the acceptance of important social responsibilities by not just platform companies and consumers, but platform workers accepting some responsibility for their own security too.