A Hope for Better Opportunities

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As the digital economy landscape expands, gig work platforms have influenced the reshaping of opportunities in Malaysia. However, with current policies still insufficient to protect gig workers, the benefits remain uncertain in the long run, leaving many unsure about their retirement plans, among other concerns. A white paper was recently published by MyCentre4IR that addresses these issues and provides resolutions for the future of the gig economy.

The future of gig workers in Malaysia: Flexibility vs long-term feasibility

This is part one of a two-part series on understanding the gig economy in Malaysia.

As the world enters the Fourth Industrial Revolution (4IR), driven by advancements in AI, the Internet of Things (IoT), and big data, industries across the globe, including in Malaysia, are undergoing a digital transformation.

This evolution is not only changing how businesses operate but also reshaping the nature of work itself, particularly within the gig economy. While gig workers benefit from flexibility, supplemental income, and accessibility to opportunities, they are still bound by the question of whether the gig economy is feasible in the long run when compared to traditional jobs.

Recently, a white paper, “What gig workers really want: Understanding gig workers’ work and welfare preferences in Malaysia”, was released by MyCentre4IR, a subsidiary of MyDigital, an agency under the Ministry of Digital. The white paper highlights the rise of digital platforms within the gig economy, which have reshaped the landscape of work, offering unprecedented flexibility but also introducing new sets of challenges.

The survey, conducted with 1,500 gig workers, delves into the world of gig workers in Malaysia, dissecting their demographics, motivations, earnings, experiences, and views on regulation. The paper also offers recommendations for policymakers and gig platform providers to navigate and optimise the opportunities presented by the gig economy while addressing its challenges.

According to the Oxford Dictionary, gig workers are individuals who perform temporary or freelance work, especially as independent contractors, on an informal or on-demand basis.

In Malaysia, the gig economy is considered a subset of the non-standard/informal sector, which is characterised by its largely flexible employment, with workers holding the power and freedom to choose when, where, and how many hours they would like to work.

The gig economy is made up of three main components: independent workers paid by the gig (task/project), consumers who need a specific service, and companies that connect the worker to the consumer directly.

With the expansion of the Malaysian digital economy, gig work encompasses a wide range of industries and sectors, such as e-hailing and p-hailing (healthcare, automotive, domestic services, creative, and professional services).

In the white paper, data from the Malaysia Digital Economy Corporation (MDEC) was shared, which shows that the number of digital labour platforms registered with the agency increased from 11 in 2016 to 123 in 2021.

“Digital labour platforms are characterised by two broad categories: online web-based, where work is outsourced through an open call to a geographically dispersed crowd, and location-based platforms, which allocate work to individuals in a specific geographical area, typically to perform local, service-oriented tasks,” it said.

Elaborating further, the white paper revealed two types of platforms in the current gig economy: location-based platforms, where workers perform tasks at specific physical locations (such as ride-hailing, delivery, home services, and task-based errands), and non-location-based gig workers, who perform tasks or work assignments online, remotely, or in person, with or without utilising digital labour platforms (including graphic design, writing, programming, and tutoring).

Understanding gig workers in Malaysia

A survey conducted by MyCentre4IR for the white paper shows an estimated 1.12 million individuals involved in the gig economy, seeking to generate either supplementary or primary income in 2022.

Meanwhile, in 2021, 68 per cent of all gig workers were engaged in location-based work, highlighting the growing importance of this sector within Malaysia’s gig economy landscape. Among the leading gig work providers are Grab (44 per cent), Foodpanda (19 per cent), Go Get (14 per cent), and ShopeeFood (12 per cent) for location-based work. The leading non-location-based companies include Freelancer.com (29 per cent), Upwork (19 per cent), and Fiverr (18 per cent).

The highest percentage of gig workers are those aged between 25 and 34 (39 per cent), while the second highest group is those aged 35 to 44, comprising 28 per cent.

Gig workers predominantly work part-time (70 per cent) and often have full-time jobs, while only a fraction of them (30 per cent) are full-time gig workers. Data shows that location-based platform gig workers are predominantly male. Jobs such as ride-hailing, delivery services, and home services may be construed as physically demanding.

In contrast, women are better represented in the non-location-based category, accounting for 53 per cent of gig workers. Sixty-five per cent of gig workers have diverse education levels, with the majority possessing at least a diploma qualification. Location-based gig workers are more likely to have a lower education level (41 per cent) compared to non-location-based gig workers (17 per cent).

Despite these differences, 70 per cent of gig workers are satisfied with their jobs, with only six per cent expressing dissatisfaction. The appeal of gig work lies in its flexibility, which contributes to a positive work-life balance and greater autonomy.

However, full-time gig workers are more dissatisfied with the absence of benefits from their gig work (25 per cent), with the highest dissatisfaction among non-location-based full-time gig workers. This disparity may stem from the vast variety of non-location-based gig work that operates in relatively unregulated environments and is less likely to offer any employment benefits.

Given the number of gig workers in Malaysia, the survey also asked whether they view working in the gig economy as a long-term journey.

“Although gig workers are attracted to the autonomy, flexibility, and opportunity to supplement their income, the consensus regarding the sustainability and desirability of gig work as a long-term employment solution varies.”

For part-time gig workers, gig work serves as a means of financial stability and future planning rather than a career pursuit, while full-time gig workers regard it as a temporary arrangement while seeking better opportunities.

Meanwhile, 33 per cent of gig workers indicated a lack of specific future plans, suggesting an openness to remaining in gig work for an extended period. Moreover, 39 per cent of full-time gig workers have not considered retirement planning at all, compared to 18 per cent of part-time gig workers.

“Part-time gig workers, who often hold other employment, are more likely to have existing retirement plans in place. In contrast, full-time gig workers are generally responsible for their own retirement arrangements, which may contribute to a lack of urgency in addressing their future financial security. This highlights the necessity for improved support systems and policies to address the long-term challenges faced by full-time gig workers.”

With ongoing discussions surrounding the gig economy, alongside initiatives under the Malaysia Digital Economy Blueprint and the National 4IR Policy, there is hope for better opportunities, a stronger support system, and a consistent framework that ensures the welfare and long-term growth of gig workers.