Regulation on gig economy still in early stages


THE government is committed to regulate the rapidly growing gig economy in Malaysia although efforts are still at the infancy stage, said Prime Minister Tun Dr Mahathir Mohamad (picture).

He said the government, via a special task force comprised of three ministries, is currently working on the welfare aspect of the gig economy which has come under scrutiny in the wake of recent strikes by Foodpanda Malaysia Sdn Bhd’s riders.

“This is a new way for people to work, and we found that many have benefitted from this gig economy, and that is why we need to maintain the system, but with regulations to protect the rights of workers,” he told the Dewan Rakyat yesterday.

Dr Mahathir was responding to a supplementary question by Fahmi Fadzil (Pakatan Harapan-Lembah Pantai), who enquired if new laws on the segment will include financial safety nets for workers such as insurance and savings under the Employees Provident Fund.

There are currently about 200,000 e-hailing drivers and riders employed under the gig economy, including 13,000 under Foodpanda, Fahmi said.

The government will ensure the interests of both workers and employers are safeguarded, Dr Mahathir said.

Putrajaya has identified the gig economy sector as a new source of economic growth for the country and will be one of the focus areas in the 12th Malaysia Plan (MP), he added.

Separately, Dr Mahathir said the government is studying several new mechanisms to replace the current pension scheme for civil servants.

“The government’s expenditure on pension keeps growing. In 2018, it was RM23.87 billion against RM5.86 billion in 2006. This amount is expected to grow annually. This is in addition to several salary increments given by the previous government, which also raised our pension liability,” he said.

Dr Mahathir was responding to Datuk Seri Dr Ismail Mohamed Said (Barisan Nasional-Kuala Krau), who questioned the current status of a proposal to implement an improved contract appointment scheme in the public service.

He said the government will find ways to alleviate some of its financial burden, but without leaving pensioners on the losing end.

Federal expenditure on salaries alone more than tripled from RM22 billion to RM74 billion between 2003 and 2016.

Similarly, spending on public service pension also increased from RM5.9 billion to RM19 billion over the same period.

Public Service Department DG Datuk Seri Borhan Dollah last month revealed plans to revamp the current pension scheme structure and replace it with an improved contractual scheme.

Borhan said the move would bring savings to the public coffers by RM5 billion annually and is expected to be implemented as early as next year.