Commentary: Consumers might have to pay more for their rides and deliveries. It’s a price worth paying

SINGAPORE: Many of us rely on food delivery or ride-hailing services on a regular basis. Numbering over 70,000, platform workers play critical roles in our modern economy.
According to the e-Conomy SEA 2023 report, Singapore’s digital economy is expected to expand robustly in the coming years, outpacing GDP growth. In tandem, there is likely to be sustained growth in the demand for platform workers.
Unlike regular employees, however, platform workers are not covered by laws governing employment. They fall in the grey zone between employees and freelancers, and may lack basic protections that many take for granted, such as workplace injury compensation and retirement benefits.
On Tuesday (Sep 10), parliament passed a landmark Bill that will give platform workers better labour protection. It provides platform workers with work injury protection, facilitates saving for housing and retirement, and enables union-like representation for this group of workers.
These changes are timely. But they have also raised questions among many about costs – specifically, whether the costs for these protections will be absorbed by platform operators, clawed back from workers or passed down to consumers.
It may be inevitable that consumers will have to pay more for rides and deliveries, but this would be a price worth paying.
Ride-hailing drivers and delivery riders spend most of their time on the road, rain or shine, delivering convenience to many without enjoying the security of regular employment.
On the one hand, platform workers enjoy greater autonomy than employees as they may work for more than one platform, and can choose to accept or decline job tasks.
On the other hand, they are subject to significant management control by platform operators, which use algorithms to assign work and pay, as well as impose requirements on when or how a task is done.
Platform workers are also subject to risks on the job as they fulfil their driving or delivery assignments, without recourse to mandatory compensation for work injuries or lost earnings unlike regular employees.
Furthermore, platform workers’ earnings are often less predictable than those of employees, as they are subject to the vagaries of market demand and supply on a daily basis. Hence, there is a strong case to shore up worker protection as well as help platform workers build up retirement savings.
The new law, based on the recommendations of an Advisory Committee on Platform Workers, will plug existing gaps. It recognises that the relationship between platform workers and platform operators is distinct from employment or pure freelancing, and hence stipulates a tailored set of protections for this category of workers. Implementation details have been finetuned through consultation with platform operators and workers, as well as insurers, academics and tripartite partners.
The provisions of the Platform Workers Bill balance the needs and interests of both platform workers and platform operators, and provide clarity on their respective responsibilities.
Significantly, the law streamlines the computation of net earnings for work injury compensation and CPF contributions. A fixed expense deduction amount will be applied to platform workers’ gross earnings to derive net earnings, saving platform workers and operators the hassle of tracking actual business expenses incurred.
The Bill also provides clarity on liability for work injuries to ensure fairness and consistency. Platform workers will be only eligible for compensation if their injuries are sustained when picking up or delivering a passenger or item, and not when they are waiting for a job. When a worker concurrently performs pick-up and delivery tasks for different platform operators, the platform operator he is delivering for at the point of injury will be liable.
Given concerns about take-home pay for platform workers who are required to join or who opt into the CPF scheme, the Platform Workers CPF Transition Support will be enhanced to provide larger offset and benefit more workers. Lower-wage platform workers who join the CPF scheme will also be eligible for higher Workfare Income Supplement (WIS) payouts and a higher proportion of this payout in cash, similar to employees who receive WIS, from 2029.
Platform workers born before 1995 should opt into the CPF scheme to benefit from overall higher pay inclusive of the CPF contributions made by platform operators. Platform workers aged above 65, in particular, will not see an increase in their own share of CPF contribution should they opt in, based on the tiering of CPF contribution rates according to age.
In recent years, significant policies have been introduced for a more inclusive workforce and society.
These include the expansion of progressive wages, the introduction of SkillsFuture Jobseeker Support for the involuntarily unemployed, and the upcoming workplace fairness legislation. The Platform Workers Bill is another key step to ensure better and fairer work conditions.  
The support of broader society is needed as the additional worker protections and savings will incur higher business costs, some of which may be passed on to consumers.
This is a price worth paying for a more sustainable platform workforce, which many of us depend on for essential services in our digital economy.
Terence Ho is Associate Professor in Practice at the Lee Kuan Yew School of Public Policy. He is the author of Governing Well: Reflections on Singapore and Beyond (2023).