AS the digital age surfaced, the gig economy formed its own market at its peak, with no plans of slowing down.

Indeed, World Bank data underlines that in 2018 itself, 25.3% of the Malaysian labour force were freelancers, and this put the country’s gig economy as growing to as much as 26% of total economic growth.

The growing numbers caught Dr Mahathir Mohamad’s attention, and he said the gig economy would be made part of the 12th Malaysia Plan.

New laws will also be introduced to protect “giggers” (gig workers) financially and physically.

The gig economy is simply where a big group of people work on their own on a freelance or ad hoc basis, and they are paid per job as opposed to receiving a regular salary from an employer. Generally, it is like working in a free market system, where workers are allowed to work independently without being tethered to long-term contracts with any company.

Although the term “gig economy” is peculiar to some, there has always been a market for people to work on a paid-per-job basis. In fact, prior to the industrial revolution and rise of the employee-employer contract, this type of work was the norm at certain workplaces.

In Malaysia, the most common gig jobs are e-hailing and delivery services, like Grab, Foodpanda and Gojek.

Why are more people joining the gig economy?

The reason why more people out there, especially fresh graduates, opt for the gig economy is simply because it is strenuous to secure a permanent job nowadays. As of last November, the number of unemployed Malaysians stood at 513,900.

This has caused them to divert to plan B, letting slip their dream job and shifting to the gig economy, where they are paid enough to cover their daily expenses at least. A recent survey showed that 41% of fresh graduates opt to take on gig jobs as they can be a good starting point before securing something full-time and permanent.

Another reason is that there’s a tonne of job options in the gig economy. Through platforms like eRezeki and eUsahawan, set up by the Malaysia Digital Economy Corporation, Malaysians can easily find temporary jobs they are interested in, and in line with their interests and skills.

A survey by PricewaterhouseCoopers indicated that flexibility is the topmost concern among millennial job seekers nowadays. This has made it easier for them to take their work lives into their own hands, as the gig economy allows them to choose where and when they want to work.

This can also be particularly attractive and remunerative for skilled professionals such as web designers, who can leverage their skills for maximum advantage. As opposed to the traditional work style, giggers are judged based on the upshots they produce, and it is up to them how they deliver their work, which allows them to tap into their own reserves of intuition, creative thinking and self-reliance.

There are, of course, drawbacks to the gig economy.

Giggers lack a steady salary, paid sick leave and other benefits, resulting in higher chances of financial insecurity.

Under Foodpanda’s new scheme, drivers are paid based on the number of orders, and not per hour. If they do three or four deliveries within an hour, they can earn quite well.

However, as the nature of this work is based on consumer demand, riders can spend up to an hour waiting to be assigned a delivery. They are not getting paid for these hours, thus, unable to fully utilise their working hours to collect the maximum daily wage.

This seems unfair, right?

Although Foodpanda claims that the new scheme will allow riders to earn more, they seem to disagree, complaining that orders are slower to come in nowadays. This is due to the competition posed by the many e-hailing options available to consumers.

Throughout their shift, they can end up making less than the minimum wage. And, what happens if they fall sick?

This puts giggers in a precarious position. If they can’t be guaranteed the minimum wage, it is difficult for them to make ends meet on a day-to-day basis. Not only that, but in the long term, it is tough for them to rent a property, let alone save for rainy days or retirement, as they do not have financial safety nets like pensions and Employees Provident Fund savings.

However, Gojek recently made the right move to introduce an earnings protection insurance scheme for its drivers. Under this scheme, drivers are covered for up to 21 days of medical leave and 84 days of hospitalisation leave.

This protects workers’ rights and welfare, and is a good example for other e-hailing services to follow.

Another drawback on the employer’s end, specifically the human resources department, is that it’s hard to hire people for top management roles as the pool of talent is brimming with giggers who have not been allowed to hone their skills.

Companies and businesses must quickly adapt and learn how to handle the massive influx of these impermanent workers, by investing in mentorship and training courses to help them strengthen their skills, so that standards are met.

In the next few decades, we could see the end of the full-time position as the prevalent mode of employment. Millennials and Gen Z – the generations shaped by the internet and mobile technology – are set to dominate the world of work. They are more resilient in the face of change and uncertainty, and crave ownership when working.

As the gig economy continues to grow, companies should adapt to changes and ensure that the welfare of giggers is protected while maintaining fair work standards as the utmost priority. – January 22, 2020.

* Nurafifah Mohammad Suhaimi is a research assistant at Emir Research.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.