RI 2023 H2 Y6 Timed Practice (Final)

9570/01/TP/Y6/23 © RI 2023 [Turn over RAFFLES INSTITUTION 2023 YEAR 6 TERM 2 TIMED PRACTICE Higher 2 ECONOMICS 9570/01 Paper 1 Case Study Questions 20 March 2023 2 hours Additional Materials: Answer Paper READ THESE INSTRUCTIONS FIRST Write your name, index number and civics class on all the work you hand in. Write in dark blue or black pen on both sides of the paper. You may use a soft pencil for diagrams, graphs or rough working. Do not use paper clips, highlighters, glue or correction fluid. Answer all questions. The number of marks is given in brackets [ ] at the end of each question or part question. Start each Case Study on a fresh sheet of paper. At the end of the examination, fasten your answers to Case Study 1 and Case Study 2 separately. Detach this cover page and secure it in front of answers to Case Study 1. Question Marks Name: __________________________ Civics Class: _____________________ _____________________ 1 /25 Economics Tutor: ________________ 2 /25 This document consists of 10 printed pages and 1 blank pages.

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3 9570/01/TP/Y6/23 © RI 2023 [Turn over Extract 1: Gig economy – a surprise boost from the pandemic In Asia Pacific, 81 million jobs were reportedly lost in 2020 due to the pandemic . The unemployment rate in many countries rose to double digits . The gig economy, meanwhile, provided lifelines keeping many afloat as workers from travel and tourism industries turned to gig jobs to boost their incomes. Offering greater flexibility, gig work has been popular in Singapore for some years now, even before the pandemic. Many have turned to gig work while waiting for permanent employment or use it to supplement their income while dabbling in ventures, in education or entrepreneurship. Part of this revolution is powered by technology – the rise of platform apps that allow you to order anything you desire with your phone. Throughout the circuit breaker and thereafter, there has been an increased reliance on these platform services. Although ride-sharing services on platforms such as Grab saw a fall in 2020 as people commuted less, a surge in food-delivery fuelled large revenue growth for these companies. For workers traditionally at the lower end of the skills ladder, in a non -gig world, they may be confined to fixed jobs as cashiers , security staff or cleaners with long hours and low pay. By becoming platform workers such as delivery workers and private-hire car drivers who use online platforms to match their services with demand, they could make thousands a month. Source: Channel News Asia, 2021 Figure 1: Number of platform workers in Singapore’s gig economy, 2018 - 2021 Source: Ministry of Manpower, 2021 Extract 2: More support for the gig workers The low-cost, asset-light model of platform companies like Grab, Uber and Lyft makes them more resilient to economic fluctuations. They did well in protecting people from unemployment during the pandemic. The question now is what more can be done to further support platform workers in the gig economy who have lower wage and job security. A national survey done in the US in 2020 revealed that about 1 in 7 gig wor kers earned less than the federal minimum wage on the hourly basis. Recently, the Biden Administration has proposed requiring companies that rely on gig workers to treat them as permanent employees, giving them additional benefits, a minimum wage, overtime pay and other legal protections. However, analysts say that this could lead to 20% to 30% spike in costs for companies like Uber, forcing them to hike charges. Total Private-Hire Car Drivers Taxi Drivers Delivery Riders 2018 2019 2020 2021

4 9570/01/TP/Y6/23 © RI 2023 [Turn over In Singapore, measures supporting training programmes and bolstering CPF savings of gig workers were rolled out in 2020. Workers could undergo training in skills tailored to their fields of gig work that creates potential for progress within the sector. The Government can also help ensure that gig workers have adequate social safety nets. Source: Various Extract 3: Big questions over gig worker welfare in Singapore As Singapore looks to provide more sustained support for lower wage workers, there has been renewed attention on whether gig workers need a lift too. Grab, Gojek and Deliveroo have each come up with various initiatives to cover their drivers and riders, but these are tied to certain conditions and even performance tiers. Fair earnings is also a key issue when it comes to ride-hailing drivers and delivery riders. Asked if it would support a minimum wage for gig workers, if someday possible in Singapore, a FoodPanda spokesperson said that this would not be the "best way forward as institu ting a minimum wage takes away flexibility and does not take into account the other costs it imposes on the rest of the ecosystem, such as customers who may have to pay more for delivery fees," she said. Meanwhile, gig workers are afraid that the higher prices for food deliveries or private -hire car rides may drive down demand and affect their earnings. Part-time delivery rider Sang Shi Jie, 20, said: “If the delivery fee rises, customers will think twice before ordering food on the platform and this may mean less jobs for riders.” Source: The Business Times and Today Online, 2021 Extract 4: Grab-Gojek Merger? In December 2020, Grab reportedly informed its staff that it was in a position to acquire Gojek. This fuelled discussion about the possible impact of the merger on key stakeholders such as consumers. Memories of Grab’s acquisition of Uber in Southeast Asia two years ago are still fresh. Both Grab and Uber incurred fines from the Competition and Consumer Commission of Singapore (CCCS) and Philippine authorities for the merger. Some observers noted that post- merger, customers paid more while drivers faced less favourable terms. Grab and Gojek may be considering the merger because of several key facto rs. First, they have complementary strengths with Grab having strong positions in ride -hailing and food delivery markets, especially in Singapore, and Gojek enjoying a strong position in Indonesia. The companies have fought intensely with each other, and other rivals, to gain strong market share in their respective markets. But as they mature, they may want to move away from aggressive marketing and price wars towards a consolidation of market position in pursuing the ultimate goal of profitability. One view holds that because both compete in markets with already very few big players, competition watchdogs may oppose the merger because of concerns that the welfare for drivers and consumers may get much worse, post -merger. Another view suggests that concerns over predatory, monopolistic behaviour may be overstated . With large sums of capital raised, Grab is investing into the creation of detailed digital maps to help make transport and delivery services more efficient. Furthermore, while Grab has a large market share in ride- hailing and food delivery industries in Singapore, Gojek has a much smaller share. Even if the

5 9570/01/TP/Y6/23 © RI 2023 [Turn over merger happens, consumers still have other options in ride -hailing and food delivery: FoodPanda, Deliveroo and Ryde to name a few. Source: Channel News Asia, 2021 Figure 2: Market share of ride-hailing services in Singapore by gross sales revenue Source: Statista, 2022 Extract 5: Rising fares and longer waiting time for ride-hailing services The ride-hailing sector has been in the spotlight recently amid complaints of higher fares and booking difficulties after COVID -19 community safe management measures were eased in January 2022. These issues have been attributed to a higher demand f