Platform workers worried about take-home pay with CPF contribution, companies concerned over impact on users
Some older platform workers CNA spoke to said they would decline to contribute to their Central Provident Fund.
SINGAPORE: Platform workers expressed concerns about the impact on their take-home pay, with older workers declining to contribute to their Central Provident Fund (CPF) accounts, in response to a list of job protection recommendations that was accepted by the Government on Wednesday (Nov 23).
These platform workers told CNA that they were worried about a drop in take-home pay, and others said that with the issue of housing loans settled, they would rather keep their money or invest it elsewhere.
Platform companies welcomed the recommendations but noted the potential impact on delivery riders and consumers when they are implemented.
The CPF measure was one of 12 recommendations made by an advisory committee on platform workers. They will be implemented gradually from the later part of 2024 at the earliest.
Platform workers below the age of 30 will be required to contribute to their CPF Ordinary and Special Accounts.
The advisory committee said that younger platform workers are more likely to have housing obligations or plans to buy a house and can use Ordinary Account contributions to pay for housing loans. These younger workers will have a longer runway to accumulate savings, and can benefit from the compounding effect of CPF interest rates, it added.
However, the advisory committee recognised that those aged 30 and above may already have retirement plans or paid off housing loans, hence they should be offered the choice of whether to opt in to a CPF contribution regime.
On this portion of workers, the committee said: "Nonetheless, the committee strongly encourages these platform workers to opt in if they do not already have separate plans to save for their longer-term needs.
"This is especially so for platform workers aged 65 years old and above who will be able to enjoy additional platform company contributions without having to contribute more on their own."
For foodpanda delivery rider Terence Koh, take-home pay is still a priority as he has two children, both toddlers.
"Now my kids are still young and I need more cash on hand than in CPF," said the 30-year-old. He said he had already paid off his housing loan and was not in need of CPF money.
The advisory committee did not indicate the amount of CPF contribution to apply, but suggested a phased increase in CPF contributions over five years, with an average of 2.5 per cent to 3.5 per cent increases annually - unless major economic disruptions require a longer timeline.
Eventually, the CPF contributions of platform workers and platform companies will be aligned to employees and employers respectively. Currently, employees aged 55 and below contribute 20 per cent of their wages while employers contribute 17 per cent.
However Mr Koh thinks that such an amount may be "a bit too much".
"The take-home will be way lesser ... At the end of the day it will still be 20 per cent of what you earn," said Mr Koh.
Full-time GrabFood delivery rider Nikhil Krishnan cited income instability as a reason for not wanting to opt for CPF contributions.
The 33-year-old said that orders had slowed for the past three weeks, resulting in him making less than usual. In such a case, he would not want to contribute to CPF at all.
"Most of us we want our own CPF and decide what we want to put. If this month I earn less, I put S$200. If I earn more than I put up to S$500. Like this month, (my wages) are really very low so I don't want to put at all."
Likewise, GrabCar driver Jong Choon Wee, 48, said that he needed money for petrol and car loan repayments, and had "no extra" to contribute to CPF.
GrabFood delivery rider Zhang Wei Qiang said that the mandatory CPF contribution was good for younger platform workers who were planning to buy a house.
He would, however, choose not to contribute. "You earn S$3,000 you want (to) see S$3,000 cash or you want see it become S$2,400 because deduct CPF?"
A self-disciplined person would be able to save every time he earned, the 29-year-old added.
Giving an example, Mr Zhang said: "Even (if the companies) give 17 per cent of CPF, can see cannot touch. Might as well I get the whole portion of money, put it in a bank for interest. At least if I'm urgent I can take out (for) use. Or maybe do a savings plan insurance, put in S$100 to S$200 for their lowest plan, which is five years (I can) also get a lot of interest."
Mr Zhang was also concerned that platform companies would cut fares or incentives for riders. Companies might reduce incentives as they would be potentially losing money by paying out CPF, he said.
"If they cut fare incentives, how much longer we got to work a day, how much more hours (do we have) to do?"
PLATFORM COMPANIES WORRIED ABOUT IMPACT
Platform companies and an association approached by CNA welcomed the recommendations but raised concerns over increased costs to consumers and a potential unlevel playing field, given that street-hail service providers and third party logistics companies are not included in the recommendations.
Grab said: "We recognise the hard work and effort that our driver- and delivery-partners put in to ensure a good consumer experience on our platform, and have been investing in a comprehensive welfare programme for them.
"The review provides a good opportunity for us to work as an industry with the government to tailor fit a set of protections for our partners."
However the company said that street-hail taxi and third-party logistics companies should also be covered under the recommendations, as they also draw from the pool of gig workers with the same workplace protection needs.
"Excluding them will result in an unlevel playing field and may lead to price and market distortion. It may also encourage other industry players to innovate and fit their business models to the exclusion guideline which may then render the recommendations ineffective," a Grab spokesperson said.
Similarly, the Digital Platforms Industry Association (DPIA), which was jointly formed by Grab, foodpanda and Deliveroo, said that it was "critical" for the Government to ensure that there was a "level playing field for all digital platforms in Singapore".
"The potential exclusion of some third-party logistics and taxi street-hail platforms, which also use platform workers for their business needs, could lead to price and market distortion," it added.
The DPIA also said that implementation should be "evenly paced to prevent major disruptions to our ecosystem of merchants, rider partners and consumers."
It noted that the issue of CPF contributions would be complicated by factors such as on-demand payouts and might impact both consumers and platform workers.
"These measures will place an upward pressure on business costs, and we must recognise that this will impact the wider ecosystem, including merchants and consumers who may see increased prices, and our rider partners whose take-home earnings may be reduced," it said.
In the same vein, Gojek noted that the recommendations would "impact costs to platforms and consumers" which may cause drivers to experience lower demand for rides.
"Coupled with rising vehicle and fuel costs, we will work together with all industry partners to implement these changes whilst ensuring the sustainability of the ride-hail industry," a Gojek spokesperson said.
"These recommendations will build on the existing safeguards we have in place for our driver-partners, offered through our driver benefits programme, GoalBetter - such as prolonged medical leave insurance, free accident coverage for every trip, healthcare services, fuel rebates and more. Practically however, CPF contributions will mean less take-home earnings for our driver-partners."
Foodpanda sought additional support for riders during the period of transition and said measures should consider potential tradeoffs, such as increasing costs that "may inevitably have to be shouldered together with consumers and merchant partners".
This could inadvertently affect rider earnings, a foodpanda spokesperson said.
Ms Tammy Tan, Group Chief Branding and Communications Officer of ComfortDelGro Corporation said: “The welfare of our cabbies and private hire drivers has always been an area of priority for us as a company.
"This is why we have in place various schemes aimed at supporting their medical and financial needs in times of strife. We welcome the Committee’s recommendations and will work closely with all relevant stakeholders to see how best we can implement the proposals.”