TWO weeks ago, we saw a protest held by Grab riders for a better deal. AirAsia hired them the same week, drawing both praise and doubt.

Every now and then, we hear about e-hailing and p-hailing and technological disruptions in various industries causing job losses, with politicians moving in to placate these fears with unfounded optimism about a better future.

The fact that more and more of our young are turning to the gig sector for jobs is not a permanent solution.  

There are many costs to consider. 

Hidden costs 

Riders, or driver-partners as they are known to rideshare companies, are for most intents and purposes independent contractors.

While they have limited health insurance coverage, usually based on a tier-reward programme, these four million gig workers are more vulnerable, especially if they are working full-time at the job, and a burden to public healthcare. This burden is usually partially absorbed with private companies with some form of medical and personal insurance.

This is particularly so when the majority of the gig workers are young and should be contributing to national productivity and coffers.

Education is another factor to consider – both in terms of sunk and opportunity costs.  

Many riders and drivers are, in fact, graduates who are unable to find employment in their fields.

The education of these graduates is paid for by public funds; directly through public universities or scholarship programmes or indirectly through tax exemptions on education, the human resource development fund (HRDF) and private funding. 

The inability of these graduates to find work and the failure of the government to ensure those jobs exist are a double loss to the country –  a loss in terms of productive output and a loss in potential earnings with the economic multiplier effects to match. 

The graduates’ failure to secure jobs in their field also means that they lose the opportunity to sharpen their skill sets acquired after up to five years of education.

These include soft skills like communication, corporate conduct and business acumen, technical know-how in business, finance, engineering, banking, teaching and other fields.

While larger rideshare and other gig companies offer some training courses for them to better themselves, it is usually hard to step up from a gig job to a career or jumpstart a stalled one.

These workers may also find it hard to benefit from HRDF programmes to upskill or retrain as they do not fit the bill for admission.

Industry trends  

Younger graduates are more in tune with the developments of Industry 4.0, corporate demands, and trends of a fast-paced, on-demand, digitally driven, platform-centric economy.  

Losing the youth to the gig economy and to more attractive remuneration and growing industries in neighbouring countries could prove detrimental to the long-term wellbeing and continuity of our skilled labour force. 

Without a line of succession, a gap is created between senior, retiring skilled employees and junior hires, which may not be felt in the immediate term, but will become apparent in a few years.

To fill this gap, foreign talent may have to be roped in or work may have to be outsourced. – August 17, 2022.

* Emmanuel Joseph firmly believes that Klang is the best place on Earth, and that motivated people can do far more good than any leader with motive.

* 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.