Malaysia’s Gig Economy Ambitions: Government to take more Initiatives

With Malaysia poised as a significant player in the gig economy, the Malaysian government is proactively pursuing strategies to capitalize on its benefits and address its challenges. Minister of Communications Fahmi Fadzil has given his endorsement to the Umno Supreme Council’s proposal, advocating for the swift establishment of the Malaysia Gig Economy Commission. He plans to present this proposal during the upcoming Cabinet meeting scheduled for next week.

During the Jiwa Madani Programme in Kampung Sungai Putat, Ayer Keroh, Fahmi Fadzil, in a statement to reporters, emphasized the importance of prioritizing the welfare of gig workers. He expressed that, from his perspective, ensuring the well-being of gig workers is of paramount importance. Fahmi Fadzil has consistently made efforts to support ride-hailing riders to the best of his ability, highlighting his unwavering commitment to this cause.

Umno Secretary-General Datuk Asyraf Wajdi Dusuki confirmed that the Umno Supreme Council unanimously agreed to urge the government to promptly establish the Malaysia Gig Economy Commission. This initiative is designed to ensure the welfare and rights of gig economy workers in Malaysia are effectively safeguarded.

Malaysia’s gig economy expanded significantly in 2023, bucking predictions that post-pandemic household and corporate activity would decline. In their September 2023 report, “Working Without Borders – The Promise and Peril of Online Gig Work,” the World Bank recognized Malaysia as one of the countries that has effectively used gig labor to increase job accessibility. This expansion is ascribed to heightened cognizance about the potential of digitalization and diverse inducements that facilitate the shift. The market size was RM1.33 billion in the third quarter of 2023. According to Mahadhir Aziz, Chief Executive Officer of Malaysia Digital Economy Corporation (MDEC), the market size in 3Q 2023 had already reached 80% of the overall market size recorded for the entire year 2022, which was RM1.63 billion. 

Aziz emphasized that the market’s continued demand, especially from the household and business segments, is indicated by this growth, with a particular focus on micro, small, and medium-sized enterprises (MSMEs). He emphasized how different gig economy platform services and solutions are becoming more well known and how they help organizations along their digital transformation journey. The MDEC’s internal examination of the quarterly sharing economy platform report, which focuses exclusively on online labor platforms and excludes other types like money-sharing and goods-sharing platforms, is the basis for determining the market size. The gig economy, freelancing economy, and similar forms are collectively referred to as the “sharing economy”. 

The lack of social safeguards, equitable pay, and opportunities for upskilling and reskilling gig workers are major concerns, but the true issue facing Malaysia is coming up with a precise definition of the gig economy. Although this would be a fairly promising area for policy for Malaysia, it would require lawmakers and policymakers to have a much better understanding of the nature of the gig economy as well as the realities of the commercial policies, algorithms, and business models of various platforms. 

Mahadhir, however, stated that other difficulties faced by gig workers in Malaysia this year include a lack of social security and benefits; uncertainty and unpredictability surrounding income and means of subsistence; feelings of loneliness and stress; and an unclear career path. According to Mahadhir, independent contractors frequently do not have the same protections under labor laws and regulations as full-time employees, including minimum wage, employees provident fund (EPF), overtime, medical leave, extended health insurance, and other benefits. Thus, the government has a lot of issues to deal with. 

For informal workers, the gig economy’s growth is a good thing since it gives them chances to move into more secure and reliable employment. Having access to employment prospects and other perks is a big step forward from the uncertainty these individuals faced before. The government will fulfill the strong demand for safety, rules, and control in this field when it moves to create codes specifically for the gig economy.