AFTER delivery service Foodpanda’s pay dispute with its riders, officials are looking into more regulation of the gig economy, which is increasingly taking over traditional jobs and businesses.

Besides Foodpanda and its competitor Grab Food, ride-hailing service MyCar and hospitality app Airbnb are among the better-known examples of such platforms in Malaysia’s gig economy.

Although there is no wide-scale, streamlined regulation for the sector, the recent ruling requiring e-hailing drivers to get public service vehicle (PSV) licences is a step in that direction.

As more and more Malaysians take up gig economy jobs, there are concerns that they are not being adequately protected by social security and denied fair working conditions.

Although gig economy companies and platforms are resisting regulations, there are examples all over the globe which Malaysia can follow.

What’s a gig?

The term “gig economy” was coined during the 2008-2009 financial crisis to refer to short-term, task-based jobs where workers are paid per assignment or job.

Another older form of the “gig” is the known “freelance work” where workers are independent contractors who are not tied to a specific firm but who provide similar services to different companies.  

Graphic artists, writers, musicians, actors, carpenters are some forms of traditional gig work.

The number of gig economy workers in the UK has nearly doubled in just three years, to 4.7 million or one in 10 workers.

The United States Bureau of Labour Statistics reported in 2017 that 55 million people or 34% of the American workforce are gig economy workers and this number is expected to grow to 43% in 2020.

According to global human resource service industry leader Randstand, the gig economy has provided jobs to those who have been unemployed and boosted their earning potential.

If they’re so popular why are they a problem?

Randstand also notes that these gig arrangements have destroyed and replaced long-standing industries and the whole concept of long-term, salaried employment and the stability that comes with it.

“The gig economy offers freedom, yes, but it also does away with things like job security, benefits, paid sick days and pensions. This can create a tenuous environment for employees and can make things like retirement more precarious,” the think-tank said.

The US chapter of the International Labour Organisation has also raised concerns over the rights of gig economy workers.

“Getting paid for one’s work in the gig economy also seems to be a big problem. A recent survey by the New York-based Freelancers Union indicates that 50% of freelancers have trouble getting compensated for their work.

“Late payment was usually the problem but a third of those surveyed experienced situations in which they were not paid at all for work already completed,” the ILO said.

“The gig economy can pose risks to societies when, for example, it becomes the only economy and replaces entire groups of employees and their full-time jobs with workers who are not protected by labour laws, or eligible for benefits and social security.

“This new class of workers, who are constantly searching for new contracts, may not be able to keep up with the most important factor in the future of work: developing new skills,” it added,

What countries are doing to regulate the gig economy?

In Malaysia, questions have been raised on whether to make EPF and Socso contributions mandatory for gig economy workers.

In April, the European Union parliament passed new rules to protect gig economy workers, which member states have to enforce within three years.

Among the new rules are for companies to:

* inform workers on the description of their duties.

* state the start date and pay information.

* indicate what is a standard working day.

* state the right to compensation for late cancelling of work.

This will apply to those who work at least three hours a week, averaged over four weeks.

The UK passed similar laws last December.

The US state of California recently passed a law to force companies to reclassify gig economy workers as “employees” instead of “independent contractors”, thus guaranteeing them a minimum wage and overtime.

California is also considering laws to force gig platforms to allow their workers to create unions which will allow them to fight for more rights and bargaining power.  

Gig companies and platforms in the US, however, are not happy and e-hailing giant Uber said it will fight the California law.

Door Dash, a food delivery start up, has also warned that the move will have disastrous impact on the gig economy. – October 28, 2019.