Requirement for Stallholders to Personally Operate Their Hawker Stalls

1 Mr Edward Chia Bing Hui asked the Minister for Sustainability and the Environment (a) why does NEA require stallholders to personally operate their hawker stalls; (b) how is this aligned with the objectives of hawker centres; and (c) whether there are any circumstances where NEA exercises flexibility when hawker stallholders are temporarily unable to operate their stalls due to personal reasons.

The Senior Minister of State for Sustainability and the Environment (Dr Koh Poh Koon) (for the Minister for Sustainability and the Environment): Sir, stalls in our hawker centres provide an opportunity for Singaporeans to personally operate their own small food businesses at lower costs and provide affordable hawker food options. By personal operations, the National Environment Agency (NEA) requires hawkers to physically operate their stalls.

The requirement for a hawker to personally operate the stall is important as it prevents subletting. If this requirement is not imposed, the tenant who has successfully bid for the stall could potentially sublet the stall and collect the difference in rent. It may encourage persons to bid for a stall without an intention to run a stall but only to sublet it. If the tenant is unable to operate the stall, he is expected to return the stall to NEA which will then release the stall for other interested hawkers to bid for the stall. This will give new hawkers a fair chance to enter the trade.

The Member asks whether there are any circumstances where NEA exercises flexibility when hawker stallholders are temporarily unable to operate their stalls. Indeed, in situations where a hawker is temporarily unable to operate the stall for good reasons, for example, for medical reasons, he or she can appoint a joint operator or a nominee to operate the stall during that period. In the event that the stall has to close temporarily, NEA may also extend support through rental waivers.

NEA supports hawkers who wish to expand their businesses by allowing individuals to hold up to two cooked food stalls in our hawker centres, provided they are able to divide their time and operate the stalls personally. Hawkers have also made use of other arrangements to grow their businesses. Some take on more stalls at hawker centres with their family members as stallholders or sell their recipes to other hawkers who in turn successfully bid for those stalls. Others continue to operate their stalls personally even as they expand their businesses to other establishments, such as coffee shops and food courts.

For those who are unable to personally operate their hawker stalls, they may relinquish their stalls or hand them over to a family member. There are also hawkers who enter into franchise arrangements, where they can leverage established brands to start or grow their businesses. This is a good way for them to learn the ropes and enter the food and beverage (F&B) space. It is in this context that we sometimes see stalls carrying the same brand across different hawker centres. NEA does not restrict such arrangements, as long as registered stallholders in hawker centres are still able to fulfil the tenancy requirements by personally operating their stalls.

NEA generally does not allow corporates to bid directly for and operate hawker stalls as this could crowd out aspiring hawkers, and run counter to our intent of providing opportunities for Singaporeans to run small food businesses. We have made some exceptions based on social considerations. For example, operators of Socially-conscious Enterprise Hawker Centres are allowed to run a small number of stalls as part of their operations. But these operators are required to plough back at least 50% of any surpluses to benefit the centre and stallholders, such as by providing shuttle services from transport nodes.

Our hawker centres have played an integral role in nation building and hawker culture has been an important part of the Singapore identity. We want our hawker centres to continue providing opportunities for Singaporeans to directly operate their own small food businesses. We will continue to support them as best as we can.

Mr Speaker: Mr Chia.

Mr Edward Chia Bing Hui (Holland-Bukit Timah): Thank you, Mr Speaker. Sir, I would like to ask two follow-up clarifications to the Senior Minister of State. First of all, does the current rule of requiring hawkers to personally operate the stall have actually been effective in preventing unintended subletting and has it also unintentionally discouraged genuine hawkers? In the case of hawkers who are intending to expand, can they re-assign their stall leases to business partner without the need to re-bid or to re-apply for their stalls?

The second clarification is that, today, for new hawkers to grow their business, they actually have to invest in branding, work on social media marketing and some might also set up their central kitchen or choose shared services. And many of these business activities require them to be physically present elsewhere than physically present at their stalls. My understanding is that today, for a stallholder, they must actually operate minimally eight hours physically. Or in the case where they have two stalls, they have to be physically present at the stall for four hours. Can the Ministry exercise some flexibilities for hawkers who may need to be outside of the stall because there are many other business activities that they have to operate?

Dr Koh Poh Koon: Sir, I thank the Member for his questions. On his first question about personally operating the stall, we believe that physical presence is actually the most practical and fair way of ensuring that the stall is not sublet and the person is operating it personally. Because through these inspections, NEA is able to directly monitor whether stallholders physically operate their stalls during the stall's operating hours.

The truth is, to catch subletting is not so easy, because it is a private arrangement that can take place between the person who has bid for the place but has no intention to run it and under the table, could be collecting subletting income from someone else and profiting from rent.

As I have said, we have let out our stalls for sometimes even below market rates in terms of rent. And there are stalls that successfully bid as low as $1. What we do not want is for a subletter to then profit from the huge margin by extracting rent from the person who is interested to run the stall and pass the cost subsequently to consumers.

And if there is a way for us to catch it better, we would want that. So, if there are suspicions of subletting, NEA would follow up on feedback where possible. Nonetheless, NEA also understands that there are some stallholders who may need to be away from their stalls for a short period of time, to run quick errands for example. In such cases, we will exercise flexibility and give these stallholders the ability to do so without taking any penalty actions on them.

On Mr Chia's question about stallholders who have expanded their businesses to say, central kitchens and have many other food establishments elsewhere, I think if the persons have already expanded their business beyond hawker centres and are very successful, and they have no time to run the stalls themselves, I think it is only right that they actually relinquish the stalls to someone else who needs the space better and focus on their business instead.

One option they could do this is to nominate their own family member to take over the stall. This is something allowed under our policies. But to nominate the stall to an unrelated person opens up the risk of someone then profiteering and buying whatever has been given to this person through a business transaction. That is something that we will not allow.

Mr Speaker: Assoc Prof Jamus Lim.

Assoc Prof Jamus Jerome Lim (Sengkang): Thank you. Could I just quickly clarify? The Senior Minister of State said that you will exercise flexibility – I had a resident, for instance, who had sought that flexibility by asking for a window by which he had to physically be present at the stall for the inspections. I understand again, of course, that you want there to be some kind of spot checks to prevent instances of subletting. But nevertheless, it seems like giving a window is a reasonable accommodation. Is that not something that is considered part of that flexibility?

Dr Koh Poh Koon: Sir, I do not know the case that the Member is talking about. There could be constraints on the ground. There could be individual circumstances. But there are place managers at each and every one of our hawker centres. So, I do hope that there is communication between the place manager and the hawker who may need some flexibility on the ground to do so.

I believe our principle is to make sure that we allow flexibility where it is needed. But if it is time and again when the things are flouted and it is too much of a repeat ask, then I think it calls into question whether that is a genuine need or whether there are some actions to try and circumvent our rules. So, we have to take things on a case-by-case basis.

But I would say that, in the end, it really is about what we want to see our hawker culture thrive. There are many successful hawkers who have done well and expanded their business outside of hawker centres, but yet they try their very best to run those one or two stalls that they started their business with personally. But there are also those who have successfully branched out to other F&B establishments where there are no restrictions like what we have, and they have chosen to give up their hawker stalls as well.

So, I think to be fair to all players, we have to respect the rules. Our aim is to encourage more small businesses to enter the hawker trade because of our low barrier to entry, but not allow chain players to start to dominate our hawker scene and change the texture and authenticity of our hawker culture.

Mr Speaker: Last supplementary question. Mr Chia.

Mr Edward Chia Bing Hui: Thank you, Speaker for your indulgence. I think the Senior Minister of State answered my first clarification. On my second clarification, where I shared that today, many of the new hawkers are also investing in time on social media marketing, they could be at the central kitchen preparing some of the ingredients, they could be doing deliveries to their customers – and they cannot be physically at the stall. But today, some of the place managers are actively enforcing, based on strict hours, for example, eight hours if they have one stall; four hours, they have two stalls. Will there be flexibility accorded in terms of the actual hours they are physically present? And how will this flexibility be consistent and fair throughout all NEA hawker centres?

Dr Koh Poh Koon: Sir, I think this is something that I think we have to look at with some sensitivity. Because as I said in my earlier reply to the Member Jamus Lim, if a hawker's business has grown to a size where they are unable to split the time properly and they have to focus their time more on the businesses outside the hawker centres, then I think it is time for them to really take a hard look and see where their main revenue source is coming from. I think if they have grown to such a scale, they ought to focus on that and they may have to give up that stall in which we are giving them, to some extent, a lower rent and a lower barrier to entry, to someone else who may need the space more.

I know there are members of the public who have seen this particular case that has surfaced on the Internet recently, on social media. I think the Member Mr Chia has engaged this particular hawker before, Mr Noorman Mubarak.

He put up a social media post about his wife who's pregnant and is unable to run the stall personally. But that is a very one-sided story. Actually, NEA has offered his wife to nominate another person to take over the stall while she is undergoing pregnancy. But instead of accepting that as a legitimate option to do so, they decided to put it on social media to try and say that we have been unhelpful.

I would say that for individuals like Mr Mubarak, who's running, I think about 20 stalls outside of the NEA system – he has two to three stalls in NEA hawker centres, but up to I think 21 registered stalls in other F&B establishments.

We are quite happy that hawkers like him have succeeded, but it is understandable that as a business owner he wants to focus on his other business and try not to focus as much attention on the hawker stalls. But that is not something that we would want, because we cannot allow our NEA hawker system to be catering to the interest of such private chain owners. We need to make sure that there are opportunities for others to enter the trade as well.

Let us remember that hawker centres are not just commercial spaces, but they are also community dining spaces with a social role. We have invested in our hawker centres to provide affordable cooked food for Singaporeans, while wanting to enable small food businesses to earn a reasonable living. So, we have deliberately kept the barrier to entry low to allow many hawkers, including like Mr Mubarak himself, to build a successful business and expand to other F&B establishment.

So, we have to maintain fairness, because this is the important role that our hawker centres play. We are happy to see our hawkers succeed, but we must also prevent individuals from gaming the system by profiteering from subletting.

So, if we did not enforce these rules, what would the alternative be? Should we allow stalls to be fully run by hired workers as businesses expand and they cannot run the stalls themselves? If so, hawker centres would become rather indistinguishable from coffee shops and food courts, eroding the authenticity. And over time, our hawker culture will be diluted, shifting from passionate hawkers serving their own dishes to our customers, to businesses just prioritising efficiency and scale over heritage and quality.

We support technology adoption, be it central kitchen, be it marketing technology through social media to improve. But what we want is to make sure that as they do so, they do not compromise and erode the culture that we are trying to protect and grow.

So, while we support technology to improve stall level efficiency, we should not do so at the expense of our hawkers stepping away from running the stalls themselves and letting the workers just take over the day-to-day running and cooking of the food. Because if hawkers wish to extend to a chain model and become bigger, they have the option to move out of the hawker centres and do it at other F&B establishments, where we do not impose the restrictions.

The reality, therefore, is that we need to balance between protecting our heritage, keeping the food affordable and ensuring fair opportunities for new hawkers. So, these are quite difficult to maintain if we do not have rules to manage. It would have been far easier for NEA to let the hawker centres just operate like any other commercial outfits, such as food courts or coffee shops, without any restrictions on subletting or any business model that the operators wish to do. But that would mean losing what makes them really special today.

So, if Singaporeans are prepared to accept hawker food at price points, quality and the business model just like any other coffee shops or food courts, then we could remove these restrictions and let the free market take its course. But for now, we believe these regulations will help ensure that hawker centres remain a place for authentic, accessible and culturally significant food experiences for Singaporeans.