Platform workers law: Drivers, riders welcome work injury insurance, but mixed on CPF contributions
Source: Straits Times
Article Date: 12 Sep 2024
Author: Kok Yufeng; Fatmah Khan & Tay Hong Yi
Consumers also have mixed views over having to pay more to defray higher business costs.
In his eight years as a private-hire car driver, Mr Kelvin Lam, 49, has met with at least two accidents that put him out of action for a month or two.
In both cases, his lost income and medical bills were covered by personal accident insurance that he had been paying for, as part of a scheme by ride-hailing firm Grab to provide greater insurance protection beyond the basic free tier.
Having benefited from such coverage, Mr Lam welcomed the news that platform operators must provide more than 70,000 gig workers with work injury compensation insurance at the same level as that for employees, after the passage of a new law on Sept 10.
Other ride-hailing drivers and freelance delivery workers interviewed were unanimous in their support for the insurance regime that will kick in as part of the new Platform Workers Act from 2025.
But not everyone was enthused about contributing a greater portion of their earnings to the Central Provident Fund (CPF) savings scheme under the law.
Consumers were also divided over whether they would be prepared to pay more to defray the higher business costs that will arise from the new measures.
Under the Act, higher CPF contribution rates will be compulsory for younger platform workers born from Jan 1, 1995, and optional for older workers.
Private-hire driver Richard Ong, 42, said he will not opt for the higher contribution rates as he already has a flat and believes CPF savings are not as crucial for his retirement.
Even so, he is worried about the impact the new CPF scheme will have on his earnings, especially since platform operators will also have to fork out their share of the contributions, which will hit their bottom lines.
“I have been driving full-time for 7.5 years and our earnings are getting lower and lower... With the CPF scheme, it is going to get worse, which means longer hours,” Mr Ong said.
Food delivery rider Muhammad Irfan Zakkaria, 21, said mandatory CPF contributions are essential for those in his age group and will help him save for future needs, and ease his worries about paying for housing and healthcare.
Delivery rider Fakhrurrazi Kasim, 23, agreed, but felt that the higher contribution rates will be beneficial only to those working in the platform sector full-time.
Ride-hailing, delivery and logistics companies that are likely to be covered under the law said stronger labour protection for gig workers will lead to added business costs.
The Digital Platforms Industry Association (DPIA), which represents Grab, foodpanda and Deliveroo, said the new measures will add significant costs to the industry, though the scale of the financial impact remains uncertain as the cost of work injury insurance and the scale of CPF contributions are still unclear.
Logistics company GoGoX said it will manage costs thoughtfully and ensure any adjustments to its prices are fair, transparent, reasonable and sustainable.
“We also want to state categorically that there will be no discriminatory algorithm in place to favour driver-partners who opt out (of the CPF scheme).”
Grab said it has also given assurances to its drivers and delivery riders that they will not be discriminated against for opting in to the higher CPF rates.
Mr Alex Lin, managing director of delivery and logistics company Lalamove Singapore, said the provisions of the Platform Workers Act are complicated. “Open and transparent communication from all stakeholders will be crucial in ensuring that platform workers are fully aware of the impending changes,” he added.
Taxi company ComfortDelGro, which operates ride-hailing platform Zig, said it will carefully consider the impact of the new law on its business.
A spokesperson for US e-commerce giant Amazon said the company looks forward to continued collaboration with the Government under the new regulations.
With the onus on platform operators to deduct CPF contributions from workers’ earnings and send them to the CPF Board, DPIA said its members have dedicated significant efforts over the past few years to develop systems and workflows to enable this.
Similarly, ride-hailing company Tada said it has built systems to facilitate CPF contributions. It is also working with insurers to secure quotes for work injury compensation policies, but said there are challenges in getting the best rates.
Insurer Etiqa, which today underwrites the income-loss insurance policies for Gojek, Tada and ComfortDelGro drivers, said mandating work injury insurance coverage for all platform workers will allow insurers to set more affordable rates, as it increases the market size and potential for economies of scale.
The company said it is working with platform operators to conduct training sessions to help workers understand their insurance coverage. It is also engaging the authorities to ensure that the company’s processes, systems and insurance products adhere to the new regulations.
Insurer Singlife said it is working on issues such as the scale, pricing and coverage of its new policies for platform workers.
Singlife innovation and ecosystem head Varun Mittal noted that claim procedures may be more complicated because platform workers will need to be covered by all the platforms they work for, and the various platforms may be covered by different insurers.
The General Insurance Association of Singapore (GIA) said those who wish to offer work injury compensation insurance policies for platform workers under the new law must first apply to the Manpower Ministry to be a designated insurer.
“Only policies that meet the compulsory terms specified in the regulations will be offered to platform operators,” GIA added.
Ms Sharon Foo, 49, who works in education, said she would be willing to pay 10 per cent to 15 per cent more for food delivery and ride-hailing trips if the money goes towards platform workers.
“They should be fairly treated and have basic protection and safety while on the road,” said Ms Foo, who uses food delivery apps once or twice a month, and spends about $30 on each order.
Student Naajidh Salih, 23, also said he is prepared to pay more for food delivery so workers have greater financial stability. “It’s fair for us to pay to help them out. But, ultimately, it should still be a 50-50 situation, where the companies help them out as well,” he added.
In contrast, accountant Tan Lay Choo, 52, said ride hailing is already expensive, and she is not willing to pay more for it. If platforms raise prices as a result of the new law, she said she would stop using their apps altogether.
Ms Kang Yunjie, 28, said she would be able to tolerate a price increase of a few cents, but would reconsider her use of delivery and ride-hailing apps if the price hike was more than a dollar.
National University of Singapore labour economist Kelvin Seah said price sensitivity among consumers may limit the ability of platform operators to pass on the higher business costs. He noted that the bigger, more well-resourced operators would be able to better weather the cost increase.
Associate Professor Terence Ho of the Lee Kuan Yew School of Public Policy said platform companies should continue innovating to stay competitive in terms of cost. He said business models in the sector may also continue to evolve, though sometimes in ways that are not fully anticipated.
“The question is whether the aims of worker protection are still met, or whether changes to business models undercut the intent of the law. If it is the latter, then the rules would need to be updated to plug loopholes and restore the law’s effectiveness,” he added.
Institute of Policy Studies principal research fellow Mathew Mathews, who has been studying platform worker issues for several years, said his hope is that the mandatory CPF contributions for younger cohorts will prompt them to consider carefully whether to choose platform work as a career.
“For quite a few of the young platform workers we have studied, a major draw was the better income they could keep,” Dr Mathews said.
“With the new requirements, it will be clearer to this group that they would not have more disposable income because of platform work, and thus should consider regular work opportunities, which have longer-term progression options,” he added.
Former president Halimah Yacob, who had served as deputy secretary-general of the National Trades Union Congress, said platform work has greatly distorted the price of goods and services here.
“Up to now, platform workers are carrying all the risks and costs. As a society, this is not sustainable,” she wrote on Facebook on Sept 11.
She added: “The legislation is a good start, but it would have been easier to deem platform workers who fulfil certain conditions as employees, and are thus automatically covered by labour laws, social security protection and union representation. Some countries have already done this.”
Source: Straits Times © SPH Media Limited. Permission required for reproduction.
579