Some social enterprise hawkers unconvinced by business model of packaged charges

Some social enterprise hawkers unconvinced by business model of packaged charges

Ci Yuan Hawker Centre
Ci Yuan Community Centre Hawker Centre in Hougang is one of the first in Singapore to be run by a social enterprise. (Photo: Fann Sim)

SINGAPORE: Some hawkers with stalls at not-for-profit, social enterprise hawker centres have confirmed that issues about costs flagged by Makansutra founder KF Seetoh are a cause for concern.

On Tuesday (Aug 28), Mr Seetoh published a post on the Makansutra website highlighting the extra costs on top of the rental that social enterprise hawkers can be made to pay as part of monthly expenses. 

The expenses can include charges for crockery washing and coin exchange services, as well as a S$600 fee for monthly cleanliness inspections, he noted. He said that some charges, which some stall holders said were compulsory, are "shocking".


Hawker centre operator Fei Siong Food Management said that the S$600 it charged a stall recently was for an optional inspection service. 

In a statement to Channel NewsAsia, a Fei Siong spokesperson said that the S$600 consultancy fee is for hawkers that "require help in professional services such as food quality and hygiene audits". 

The service is not compulsory for hawkers, nor is the coin exchange, which the company said is a non-profit service it offers. 

Fei Siong's social enterprise arm was awarded the tender to run Ci Yuan Community Club Hawker Centre on a "not-for-profit" basis in 2015

When Channel NewsAsia visited the centre on Saturday, hawkers who were willing to be interviewed insisted that the S$600 inspection fee was not optional. 

"We were told about the fee in July when our contract was up. It came out of nowhere, and they told us that it is for the NEA (National Environment Agency) and quality control," said one hawker. 

The hawker, who did not want to be named, said that he eventually gave in and paid up to remain at the same stall. So far, one inspection has been conducted since the re-contract last month. 

"Somebody came to take a look at our stall. It was over in just a minute. They came in, took a brief look at our stall and left. I don't know if that person is from NEA," the hawker said. 

The hawker also revealed that they were charged S$50 during the re-contract for exchanging coins with the operator. 

READ: UNESCO listing will lift hawker culture but saving it is a different challenge

Another hawker, who also asked to remain anonymous, packed up and left after the centre's management failed to properly explain the monthly inspection fee.

"I was asked to continue by signing both agreements or my (hawker) licence will not be renewed. I was told I cannot opt out. If it is optional, why did none of the stalls opt out to reduce costs," this hawker told Channel NewsAsia in a phone interview. 

In a WhatsApp message between the hawker and management that was shown to Channel NewsAsia, the S$600 fee was said to be compulsory.

MEASURES TO ENSURE COSTS ARE KEPT "AFFORDABLE"

The model of appointing socially conscious operators was introduced in 2015 with the completion of Ci Yuan Hawker Centre and Bukit Panjang Hawker Centre. 

In response to queries from Channel NewsAsia, the NEA said there are currently 13 new and existing hawker centres and markets appointed by social enterprises such as Fei Siong, NTUC Foodfare, Timbre, Koufu and Kopitiam. 

READ: Singapore's hawker culture to be nominated to UNESCO intangible cultural heritage

Under this model, NEA said it has "put in place measures to ensure that the managing agents keep food prices and stall rental (and other operating costs) affordable". 

The total cost for stallholders is one of the key evaluation criteria for NEA in the tender. The median stall rental at social enterprise hawker centres is S$2,000, said NEA. 

"IT'S ALL BEING TAKEN CARE OF"

There are social enterprise hawkers who have found a package deal helpful. One of them is Madam Soryati Pokol, founder of Warong Lorong Fatimah at the NTUC-run Kampung Admiralty

She pays about S$4,000 a month and it covers a gamut of services from cleaning to waste management, as well as her stall rental.

"NTUC is reasonable. It includes everything, waste management and all. It's all being taken care of so I only have to focus on my own thing," said Madam Soryati. 

Kampung Admiralty
To date, there are currently 13 hawker centres and markets which are managed by NEA-appointed social enterprises including NTUC Foodfare's Kampung Admiralty. (Photo: Fann Sim)

However, for several other social enterprise hawkers, the issue of paying more than those managed by NEA was a cause for concern. 

A hawker, who goes by Mr Yeo, said that NEA-run hawker centres have a "flat-rate" and costs are "one-layer". 

For his social enterprise-run stall at a hawker centre in the north, Mr Yeo said he pays about S$2,000 in rental, but his monthly expenses come up to more than S$4,000 a month after taking into account a range of service charges. 

Mr Yeo's rental is determined by the hawker operator under the social enterprise model, whereas in NEA's model, the rental is determined by tender bidding prices.

In July, successful bid prices ranged from S$8 to S$10,028. The median price of the bids was S$610. 

"At the end of the day, an NEA hawker centre is still cheaper for hawkers. The rental may be comparable to NEA hawkers, but the add-ons make it more expensive," Mr Yeo said. 

Another social enterprise hawker said he has to pay S$80 a month for a point-of-sale (POS) system that includes a tablet, as well as cashier and back-end systems. He said he is considering closing up shop due to the extra costs and poor footfall. 

"I have to pay for the POS system for three years. It's about S$3,000 and at the end of the day it's not even mine. Why are we taking on such a cost? Back at NEA, whatever POS you use, you purchase it directly. If I shift away, the POS is still with me," he said. 

The hawker told Channel NewsAsia by ending his contract two years earlier than its stipulated three-year period, he may lose his security deposit of two months' rental.  

"It's like digging a hole and asking us to jump in. Then they bury us." 

"To promote 'hawkerpreneurship', you need to set the processes and procedures right. It has to be same as the operation of NEA-managed hawker centres. NEA should have regulated the social enterprise hawker centres like it does with the regular hawker centres," the hawker added. 

Yishun Park Hawker Centre
Yishun Park Hawker Centre (Photo: Lennard Lim)

READ: Government should ‘stay out’ of it: KF Seetoh goes On the Record about preserving hawker food culture

Timbre's managing director Edward Chia explained that some of these extra costs are put in place to "elevate" hawkers. Mr Chia added that Timbre does not mark up any cost incurred by third-party vendors and instead subsidises it. 

For example, half of the cost for the POS system is borne by Timbre. 

"We pay a lot more to the vendor from the hardware to the software. Today everything is in the cloud. There's also an annual licensing fee that we have to pay - we subsidise that as well," said Mr Chia. 

"At some point, I wish to be able to provide our stallholders with data analytics so they understand their business a bit better," he added. 

Hawkers at Timbre's Yishun Park hawker centre have to absorb the 10 per cent discount when customers choose to pay with Timbre's own membership app.

To that, Mr Chia said that this is not unlike how hawkers give discounts or extras to customers before the app - which took a six-digit sum to develop and maintain - came into the picture. 

"If everybody is going to have their own form of an informal loyalty scheme, why don't we come together to have a unified account scheme. We felt that 10 per cent is not high and it is something that hawkers are prepared to give to their customers," he added. 

"BETTER MANAGEMENT, BETTER SERVICE AND STABLE PRICES"

Meanwhile, NEA said it thanks Mr Seetoh for his feedback and appreciates his passion for the hawker trade.

"Ultimately, the hawker centres being run by socially-conscious operators should be for better management, better service and stable prices which in turn benefit consumers," it said.

"The Government is committed to upholding the role of hawker centres as community dining rooms, and will continue to adapt and enhance this key social infrastructure so that it remains relevant and attractive to our diverse population."​​​​​​​

Source: CNA/fs(hs)

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