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10
Dec

Flexibility Meets Regulation: Malaysia's Approach To The Gig Economy

Current statistics and insights 

In 2023, the local gig economy was valued at RM 1.33 billion, with over 100,000 new workers joining by the third quarter, as Malaysia Digital Economy Corporation (MDEC) reported. A recent study by the Malaysia Centre for the Fourth Industrial Revolution (4IR Centre) revealed that 4 million Malaysians were engaged in the gig economy. 

E-hailing and p-hailing services are the common types of gig work, but they also include freelancers like writers, designers and programmers, as well as elderly care services, cleaning services, caregivers offering childcare services like Kiddocare and many more.

This rapid growth reflects the preference for self-employment, especially among younger Malaysians. The appeal lies in the flexibility to set their own hours and choose assignments as well as work environments. It also offers gig industry employers the advantage of engaging workers without traditional employment contract constraints. 

 

Necessity to Regulate the Gig Economy

However, over time, many issues and complaints cropped up.  While the gig economy offers flexibility, it also raises concerns about the lack of social security, healthcare, fair wages, and mechanisms for dispute resolution. The President of the Malaysian EHailing Drivers Association (MeHDA)  highlighted that some gig workers are subjected to unreasonable practices, including abrupt termination within 24 hours.

The government is well aware of the rapidly growing gig economy and the increasing issues faced by gig workers. Therefore, it has taken significant initiatives to regulate the gig economy and protect the future of gig workers. Around March 2024, the government announced the establishment of the Gig Workers Commission to prioritise social protection, resolve contract disputes and promote the career advancement of gig workers in Malaysia. In October 2024,  Deputy Prime Minister said the Gig Worker Economy Bill would be tabled after the Budget 2025 is passed.

 

Gig Worker Economy Bill Challenges: 

However, industry players such as Foodpanda, GoGet, Grab, Halo Delivery, Kiddocare, and Lalamove have raised concerns via a joint statement to the government on limited consultations. They stressed the need for inclusive discussions to ensure the Bill benefits all stakeholders. Key concerns raised by gig industry employers include:

  1. Increased Operational Costs: They fear the new regulations may disrupt their business models, especially smaller companies.

  2. Unintended Consequences: They highlighted insufficient discussion could lead to higher entry barriers for gig workers, business disruptions, and increased consumer costs.

  3. Sector-Specific Needs: All gig sectors have unique needs and thus, the gig industry employers advocate broadening what defines gig workers, to enable the regulation to be tailored to the gig sector

  • Delivery riders may need tailored insurance and fuel subsidies;

  • Caregivers require verified qualifications and emotional health resources;

  • Freelancers face challenges like delayed payments and flexible project terms; and

  • E-hailing drivers require transparent fare-sharing systems and support for rising fuel costs.

  1. They proposed that gig workers be given the option to voluntarily participate in social protection schemes, to maintain their autonomy and flexibility 

Acknowledging these complexities, the government has postponed the tabling of the Gig Workers Economy Bill to allow for further stakeholder engagement.

 

Final Note 

While it is still a work in progress, the Gig Worker’s Economy Bill is a pivotal step to protect Malaysia’s gig workers and, indeed, a commendable effort by the government. However, the Gig Worker’s Economy Bill’s success depends on balancing gig workers’ protection with the operational flexibility that sustains the gig economy.

 

- Decode Workforce

By : Leenalochana Malaipan 

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