Gig economy rides out Covid-19 storm

Gig economy rides out Covid-19 storm

KUALA LUMPUR: The number of gig workers has escalated this year, especially in the e-hailing and delivery services, in light of the implementation of the Movement Control Order (MCO).

The unprecedented economic challenges caused by the Covid-19 pandemic also saw soaring enquiries with regard to e-hailing jobs due to retrenchment as a result of the MCO.

The reopening of activities and continuous support from the government has helped the Covid-19-hit gig sector defy the current economic downturn and ride out the pandemic.

The statistics of those involved in e-hailing and delivery services this year is expected to be higher as the gig services sector welcomes more laid-off workers and those facing income cuts.

Last year, there were 466,600 workers involved in the gig sector compared with 559,900 workers in 2018, according to the Department of Statistics Malaysia (DOSM).

E-hailing rebounds after suffering pandemic hit, food delivery survives

The e-hailing sector recorded contraction of revenue at 16 per cent and 68.8 per cent in the first quarter (Q1) and Q2, respectively, amid the Covid-19-led MCO and Conditional MCO (CMCO), imposed nationwide from March 18 to June 9.

However, the e-hailing sector saw a strongest rebound in revenue with a 237.8 per cent growth in Q3 as economic activities reopened from June 10.

Meanwhile, total e-hailing companies operating in the country declined 25 per cent to 33 licences in November 2020, from 44 licences recorded in the same month last year.

Grab, with its extensive 100,000 driver-partners, led the widest rides network in Malaysia followed by MyCar (10,000 driver-partners).

Meanwhile, revenue of the food delivery services grew 7.3 per cent and 14.5 per cent in Q1 and Q2, respectively, as demand climbed due to limited movement during the MCO and CMCO.

The food delivery services recorded a moderate revenue growth of 1.9 per cent in Q3 following the reopening of restaurants and dine-in services.

Initiatives to boost gig economy

The National Economic Recovery Plan, unveiled by Prime Minister Tan Sri Muhyiddin Yassin on June 5, has allocated RM75 million to promote the gig economy and provide a social safety net for workers in the informal sector.

Of this, RM50 million in matching grants would be allocated to the gig economy platforms that contribute for their gig workers towards the Social Security Organisation’s (Socso) employment injury scheme and the Employees Provident Fund’s i-Saraan scheme.

Meanwhile, the Malaysia Digital Economy Corporation (MDEC) will be provided with the remaining RM25 million for the Global Online Workforce programme to encourage freelancing.

According to MDEC, 28,425 gig economy workers had registered with Socso since Jan 1, representing seven per cent of the 400,000 people involved in the gig economy.

The government also announced an additional RM5.3 billion for the Wage Subsidy Programme extension. This programme covers wage subsidies, reskilling and upskilling programmes, hiring and training assistance, as well as gig economy social protection.

Challenges

DOSM reckons gig workers will continue to face challenges where their salary or profit earnings would depend on the demand and availability of customers, jobs or projects, especially during this pandemic, despite becoming one of the increasingly popular alternatives to generating income.

In addition, most of the gig workers do not have standard employment contracts, which affect their welfare and social protection network.

“Increasing demand in digital activities may be beneficial in terms of increased income during the crisis.

“However, there are also some in this group whose income are affected. Recognising this situation, the government continues to implement various initiatives to help minimise the effects and risks of the economic crisis due to the Covid-19 (pandemic) facing this group,“ said DOSM.

In this regard, DOSM believes that for the development of more comprehensive gig worker indicators, it is necessary to look at a wider range of resources other than the use of survey data, among others through the information of administrative records from various agencies directly or indirectly involved in with the gig economy.

The gig economy in Malaysia covers the services sector (transport, food and beverage, accommodation, wholesale and retail trade, arts and entertainment, professional, and information and communication), manufacturing sector (manufacture of food products and clothing, and printing), construction sector (construction of buildings and special carpentry), and the agriculture sector.-Bernama


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