NST Leader: Regulated economy

THE roaring Malaysian gig economy is bracing for a seismic transformation: The cabinet is set to deliberate on the pressure to set up a statutory body to regulate the industry.

Two non-government industrial outfits representing e-hailing drivers and delivery riders have pressed for the formation of the tentatively named Malaysian Gig Economy Commission (SEGiM).

Their mission: Seeking labour and legal protection of their interests and demands for higher commission and accident coverage. which seem exclusive for drivers and riders.

Now, SEGiM's realisation is picking up pace: Communications Minister Fahmi Fadzil has pledged a cabinet agenda, which is understandable. The proposed statutory body can potentially structure a gig economy taxation system, considering the massive revenue it generates annually, resulting in significant cash outflow to foreign soil.

The Malaysia Digital Economy Corporation has registered the gig economy as 1.2-million strong (some reports indicate 4.1 million) fully or semi-skilled workers freelancing in 137 trades registered as partners with MDEC.

The gig workers' expanse is diverse, comprising application and website developers, travel consultants, translators, tutors, performers, insurance and call centre agents, just to name a handful. But in this pending scenario, the ubiquitous e-hailing drivers and delivery riders, who started as part-timers but prompted by Covid-19 pandemic job losses to evolve into full-timers, have positioned themselves as the prime-movers.

SEGiM's proponents' complaints centre on legal definitions: service providers don't recognise drivers and riders as "employees" because they themselves "aren't considered employers". To show discontent, drivers and riders occasionally stage "industrial action" by being "off–road" for several hours, dragging down services and sparking off inflated fares and delivery charges.

Conversely, service providers aren't taking this quietly: they understand that the "noise" is clanging from transport outfits, whose formations were inspired by political expediency.

If SEGiM is approved, the government will have to formulate labour and legal policies to cover the millions of gig workers. How can this be accomplished? It's been recommended for SEGiM to look into the Singapore–style benefits and protection model, which recognises freelancers as "not employees", but a discrete category of workers with corresponding benefits.

SEGiM can begin by engaging various stakeholders. But this is the biggest fear stemming from this major transfiguration: Enhanced labour and legal protections could spike prices that will be passed on to consumers.

This counter-productive repercussion risks subverting the gig ecosystem. Nevertheless, the booming gig economy is eager for injections of stimulants to complement its high and vital Internet penetration.

As it jockeys towards a RM650 million growth target by 2025, the gig economy may soon join other big players in augmenting the national gross domestic product.

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