By Mohd Zaki Abdul Razak & Dr Eizan Azira Mat Sharif
The term ‘gig economy’ is used to describe freelance jobs that offer flexible and temporary work for individuals, utilising online platforms to provide services for clients in search of such services. Historically, the gig economy started with the US recession of 2008, when many people were laid off and consequently in need of temporary jobs in order to survive the economic downturn. In Malaysia, the dawn of the gig economy began with the inception of Grab, foodpanda, and Lazada in 2012, and Uber in 2013, to name a few.
At first, the gig economy was booming, and people were very excited about the new services that the different platforms were offering. It also caught the attention of people who wanted to try being a ‘gig worker’, which gave them, among other things, more control over their daily income and more freedom with their work schedules. Since the gig economy was not yet regulated, business was good, and competition among the online platforms delivered competitive pricing on goods and efficient services to an ever-increasing client base.
But as time went on, the gig workers started to feel like they were part of the company, even though they weren’t. This made them want more money and insurance coverage. Their argument was that they carried the brand name of the platform provider and, therefore, should be well compensated for their effort. These demands were more similar to those made by more traditional employees on corporate payrolls and were, therefore, according to platform owners, the antithesis of what the gig economy was intended to be. The situation was a time bomb waiting to explode. It led to the July 2021 strike by Uber and Lyft workers in the United States, seeking better pay, improved work conditions, and legal protection, and, more recently, the strike of p-hailing workers in Malaysia, who demanded, among other things, better pay and insurance coverage.
In order to maintain a mature gig economy, platform owners, regulators, and gig workers should find an equilibrium point that they can work from. Despite the fact that the market always wins, owners of gig economy platforms should find ways to ensure that their business model benefits all stakeholders. They should come up with a revised business model that will not undermine any of the stakeholders. From an Islamic perspective, if any of the parties to a business arrangement feel justifiably oppressed, it will be considered an injustice and is forbidden.
To further develop the gig economy in Malaysia, the platform owners should treat their gig workers with more respect and endeavour to provide better monetary compensation as they carry the brand name of the platform owners. If not, why the necessary star rating being imposed and the temporary stoppage of services if any of their gig workers received negative remarks from the platform clients? It seems that the platform owners wanted their gig workers to provide excellent service without receiving fair compensation in return.
In a departure from established practices, the initiative by AirAsia on its new gig economy platform to provide a minimum salary of RM3,000 for its gig workers is very welcome although, given that that a worker has to commit a certain amount of working time to earn it, it’s debatable whether workers signing up to the platform can still be considered gig workers, or are they now employees in the more traditional sense.
On the part of the regulators, seeing the expansion of the gig economy (23 per cent increase after the COVID-19 pandemic), the Malaysian government decided to impose compulsory Public Service Vehicle (PSV) licences for the e-hailing drivers and there have also been recent talk about imposing the Goods Driving Licence (GDL) for the p-hailing workers. These initiatives have degraded the whole idea of the gig economy, which is essentially premised on the fact that the gig workers can go in and out of the gig economy as and when they like it. Whether inadvertently or on purpose, the regulators have created some sort of mini barrier to entry for the gig workers who seek fast cash.
Even though gig workers play an important role in the economy today, they shouldn't think of their work in the gig economy as a permanent job. Instead, they should see it as a temporary way to make money. While it’s true that you can pay bills from the income, and you get to put food on the table, gigs, by definition, are temporary, demand-based, and particularly vulnerable to the unpredictable fate of tech companies that provide gig platforms. Gig workers should not treat their jobs as their exclusive source of income. It should be treated as a stop-gap income stream, a means to an end, i.e. a job that they take up temporarily.
After all, the sustainability of being a gig worker depends not just on the economy and the platform provider but also on the worker himself or herself, on whether they still have the ability and the strength to carry out their work as e-hailing drivers or p-hailing riders in Malaysia. Although it is known that the income they receive from being e-hailing or p-hailing workers can go up to a whopping RM7,000 per month, they still find it difficult to secure a housing loan that requires them to pay a consistent amount of money for the next 20 years or so. Furthermore, your experience as an e-hailing driver or p-hailing rider does not add value to your resume if you decide to join the corporate industry later in life.
In conclusion, the gig economy is here to stay, so platform owners should find the best way to combine the traditional relationships between workers, businesses and clients with the gig economy. The authorities should also keep tabs on maintaining healthy competition and not let one platform owner monopolise a particular service or become a ‘super app’ that will vanquish the smaller platforms, which would diminish healthy competition and giving of better offerings to consumers, and have other negative repercussions.
Mohd Zaki Abdul Razak is a part-time lecturer at University Kuala Lumpur Business School. His research and teaching interests include Entrepreneurship Education, Design Thinking, Business Innovation, Digital Marketing and Economics.
Dr Eizan Azira Mat Sharif is a lecturer in the New Media Communications Programme in the Faculty of Leadership and Management at Universiti Sains Islam Malaysia (USIM).