The Gig Economy & E-Hailing Services: Prospects & Potentials Amidst COVID-19 Outbreak in Malaysia

John McAfee defines the gig economy as an empowerment and the gig economy is currently blooming at unprecedented speed along current technology streamlines.

According to the Institute for Democracy and Economic Affairs (IDEAS), e-hailing’ is defined as a term used for ordering a car, bike, taxi, or any other type of transportation pick-up by using electronic devices such as smartphones or personal computers. As the consumers, we can now settle the bill electronically all through an app. This also provides an opportunity for individuals to gain more income especially in the gig economy environment, with flexibility in choosing working times on top of that.

The gig economy or known as “sharing economy” or “collaborative economy” – usually refer to platforms such as Grab and Uber. This sector can improve one’s work-life balance as the individuals can choose any temporary gigs which they are interested in rather than being forced into a position. 

The e-hailing industry has changed the economic landscape in recent years, with limitless potentials to challenge the existing key market leaders and some have already made a major impact on cities and suburban areas. With the sole intention in filling the gaps between consumer needs and existing government or corporate infrastructures. Needless to say, in the current hardship of a pandemic outbreak, this write-up discusses specifically on how the prospects and potentials of the gig economy and e-hailing services amidst the COVID-19 outbreak in Malaysia.

Low job opportunities nationwide since a few years ago have been the pushing factor for fresh graduates and youths nowadays to sign up for e-hailing services as a part-time or full-time job as currently there are about 1.7 million Malaysians enrolled in the gig economy sector, majorly in Foodpanda and GrabFood. Consequently, it is not surprising as these very workers are one the vulnerable groups affected during this crisis and losing their gig jobs within a split second is the number one main worry.

Compared to the period of Asia Financial Crisis 1998 and Global Financial Crisis 2009, researchers have projected that the rate of unemployment in Malaysia as for 2020 will be the highest in the nation’s history. The issue now is that gig economy workers have no job security and in regards to this COVID-19 global pandemic it is believed that demands by the consumers may be volatile, resulting in uncertain monthly salaries.

However, with all the uncertainties, the government and the e-hailing company have projected a plan to ensure the welfare of the gig workers. Such as Grab Malaysia which has launched the Partner Protection Fund to provide financial aid for gig workers undergoing quarantine or intensive treatment of COVID-19. They also collaborated with state governments and few organizations to promote and support small local food businesses during the Ramadan period.

Furthermore, to provide a safety net for the gig workers, Foodpanda Malaysia has taken the initiative to protect a total of 2,544 Foodpanda riders nationwide under the Self-Employed Social Security Scheme (SKSPS) of Social Security Organization (SOCSO).

Besides, the Malaysian Government announced that a one-off financial assistance of RM500 will be given to 120,000 e-hailing employees and RM600 for taxi drivers with a total allocation officer RM60 million amounting to a RM250 billion stimulus package. Still, will this be enough for them to cater their needs to an unknown timespan of the Movement Control Order (MCO) in the future?

Thus, APEC Malaysia, Bank Negara Malaysia, MDEC, and the United Nations Capital Development Fund had initiated the Financial Innovation Gig Economy Challenge which calls for the submission of bright solutions in developing the financial health of gig economy employees.

In terms of its potentials, with the public transportation shutting down or limited in their service per day, e-hailing platforms could take advantage of this within the transportation market which lies abundant opportunities for the government to benefit them and to alleviate these challenges that came from the pandemic.

Moreover, with the onset of blooming e-commerce (online businesses) growth in recent weeks, these gig workers are now seeing a higher demand for their services in terms of goods delivery since everyone is staying at home and to go shopping is not possible anymore.

For example, the emergence of e-bazaar as a new platform for Ramadan businesses to embrace and stay afloat amid the MCO which have severely impacted their incomes with estimated losses of about RM 50 million for some 100,000 hawkers. Hence, many have drifted their marketing strategies to social media such as Facebook, Instagram and WhatsApp to offer cash-on-delivery or online services to customers. The government under the SME Corporation has recently launched ‘Ramadan eBazaar’ online platform to allow food entrepreneurs, traders and harkers to operate their business in the month of Ramadan during the MCO. 

In conclusion, to ensure the effectiveness of the government in handling this crisis, it is suggested that the Ministry of Youth and Sports with the Ministry of Human Resources, have to work hand in hand to translate these challenges into opportunities for development – for both the economy and the labour market as a whole. This is crucial as there are many young Malaysians, who are currently experiencing dilemmas and difficulties beyond their capabilities in maintaining financial welfare, mental well-being, education, and health as well. 

At PUTRA, we always believe in inclusivity and no one should be left behind. As of now, every nation worldwide is structuring its strategies and proper policy implementations on providing better solutions for the workers as well as employers peculiarly for this blooming gig economy industry. 

For now, #StayAtHome and #StaySafe. #KitaMestiMenang.

This piece is written by Khairul Shamir Iqwan, Partner (Administrative) at PUTRA.

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