“As riders, we note with grave concern the recent news about the upcoming reforms to our industry. We are especially concerned about the potential mandatory CPF contributions.
Many riders are already struggling day to day. There is nothing stopping the major platforms like Grab and Foodpanda from reacting to this news by cutting our fares even lower than they already are. This will only make life harder for us. In light of this, we riders will not support mandatory CPF contributions unless the government can guarantee us that our fares will not be cut if CPF is compulsory.”
Mandatory CPF for Riders?
On the 4th of March, the government announced that it is considering compulsory contributions from employers of private-hire vehicle drivers and food delivery riders to their Central Provident Fund (CPF) accounts. The government insists that this policy change is intended to improve protection for platform workers.
Many riders are concerned about inadequate retirement savings. This is an issue that concerns all workers in Singapore. However, it is a huge leap to use this as a justification to make CPF contributions mandatory at this point. Without ensuring protection of riders’ fares from further deductions, platform companies are able to transfer the cost of compulsory CPF contributions to their workers in the form of reduced incentives or earnings.
Employers are able to do so by manipulating fares and incentives as they wish. Importantly, it is not the rider who sets the fare, but the platform that controls these settings within the platform. Here is a ‘black box’ that does not publicly reveal fare arrangements, with power in the hands of companies to determine riders’ earnings.
Several riders remarked that their fares and incentives fluctuate across time. This is done by platforms to make riders work harder and longer to attain incentives that are designed to be difficult to achieve. If fares and incentives can be changed by platforms whenever (and however) they want, what is preventing them from lowering riders’ fees to cover their additional cost for paying their share of employers’ CPF contributions?
Riders’ earnings are also affected by many other factors. Some examples include bad weather, long waiting times at restaurants, wrong addresses, app glitches and outages. In the past few days several riders who are Apple users have experienced difficulties using Grab. Some say they did not receive any jobs for hours. This is not the first time the app has been disrupted. There were at least two system outages in April 2018 and November 2021. Given how vulnerable riders’ day-to-day earnings already are to so many factors, it is ironic that the prospect of compulsory CPF contributions is producing even more anxiety rather than security.
A Closer Look at the Government’s Arguments
Nonetheless, senior minister of state for manpower Dr Koh Poh Koon cites three statistical reports and case studies to support his argument for prioritising compulsory employer contributions to CPF over securing riders’ earnings.
None of these arguments are convincing.
1. Dr Koh mentions that an advisory committee convened in September last year conducted a public consultation exercise, in which “more than half of platform workers who responded to (our) public consultation exercise felt that mandatory CPF contributions to their special and ordinary accounts would be important for their retirement and housing needs”. How many platform workers attended this public consultation exercise? How many of them were private vehicle drivers and how many were food delivery riders? Why were the rest of the platform workers resistant to mandatory CPF contributions? Since it is being considered for an important policy decision, it is important that riders and the general public receive more data and transparency about this public consultation exercise.
2. Dr Koh cites a recent IPS survey of private-hire vehicle drivers (partially funded by Gojek) in which 84% said they were concerned about retirement savings. As mentioned, it is unsurprising that with the high cost of living in one of the most expensive cities in the world, a significant majority are concerned with not having adequate retirement savings. This however does not mean overwhelming consent or support for making CPF contributions mandatory, without first putting in measures to protect riders’ day to day earnings from further decreasing.
It must be clarified that the IPS survey only accounts for private vehicle drivers. Several articles published by the mainstream media use the term “platform workers” and some might be misled into believing that the survey findings represent both food delivery riders and private-hire vehicle drivers. Not a single food delivery rider was included in the survey’s sample. Despite the decently sized sample of private-hire vehicle drivers, the IPS survey does not claim to be representative of drivers either. The only part of the IPS research project that includes riders’ views is the in-depth interviews aspect- where only 31 riders were interviewed. How can such a survey be considered representative of riders? Much less, be used to justify public policy?
3. Perhaps, noticing that the IPS survey has no representation of food delivery riders, the minister uses the case study of Ms Peh Xin Xuan, a 28 year old who has been working as a food delivery rider “for many years”. He mentions that it used to be her full-time job but no longer is. Ms Peh found that “irregular earnings, without CPF contributions, and physical demands of platform work took a toll on her- financially, physically, and mentally” and hopes that her CPF savings can be used to finance a BTO flat she recently applied for with her fiance.
Indeed, CPF contributions are necessary for most of the population to own a home. However, conversations with food delivery riders across demographics indicate that views on compulsory CPF contributions are far from unanimous. If the most convincing argument for making CPF contributions mandatory is the ability to purchase a house, then that argument is moot for older riders who are already home owners. The argument would also not resonate with riders who are far from aspiring to own a home and are more concerned with surviving the increasing cost of living today – food, water, electricity, and paying rent. Notwithstanding, Ms Peh brings up the issue of irregular earnings alongside CPF contributions. The minister makes no explanation on why CPF contributions are being prioritised over day-to-day earnings.
Guarantee a Minimum Fare
The government should not only listen to the problems, but the solutions proposed by food delivery riders themselves. Consider making it law that food delivery companies guarantee a minimum fare for riders if CPF contributions are going to be made mandatory. With the cost of living increasing, riders have a right to protect their rice bowls. If there can be a local qualifying salary that serves as a de-facto minimum wage for Singaporean workers amounting to $9 per hour for part-time workers and progressive wage model expansion to other sectors, why can’t there be an equivalent for a wage floor for riders’ earnings before making CPF contributions mandatory?
In 2019, the government banned PMDs overnight. In 2021, it increased petrol prices. In 2022, should we let the government make CPF contributions compulsory without first guaranteeing a minimum fare for all riders?
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