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Gig economy to emerge as essential employment sector

Gig economy to emerge as essential employment sector

18 May 2020

The gig economy could emerge as a key job employment sector as the demand for related services is expected to remain high even after authorities are able to tame the spread of the coronavirus.

As Malaysia’s unemployment rate jumped to 3.9% in March, the freelance industry that is particularly involved in digital-based services saw an uptake, said an economic analyst Dr Aimi Zulhazmi Abdul Rashid.

“The adaptation and adoption rate to the digital economy or gig economy now has been tremendous by all levels of businesses, as well as individuals,” he said.

The minimal contact and social distancing behaviours to avoid Covid-19 cross-transmission has forced people to adjust their preferences to search for services that could provide digital solutions and options.

“The future is tremendous for online business, as well as its support services including logistics, transport and warehousing in transfer of goods.

“We are also already seeing leaps in growth in grocery and food delivery during the Movement Control Order (MCO) period as more people prefer to stay home,” he told The Malaysian Reserve (TMR).

He said companies looking for ways to meet internal targets and deadlines could employ gig workers to work remotely and complete projects.

Such significant shifts in temporary employment are already seen in consumer-centric businesses such as food and beverage and education (online tutoring industry).

Gig economy could be defined as a short-term, temporary or independent freelancer for one or a variety of clients, as opposed to traditional full-time jobs.

Aimi Zulhazmi said countries around the world have already witnessed the gig economy altering commerce and trade, thus Malaysia must be ready to roll out framework and policies to support this sector.

“We do not necessarily become the producer of goods, but be the intermediary instead to provide the services and products, especially becoming a strategic logistics and transportation hub.”

However, he said like any digital-based business, the gig economy would also disrupt and eliminate the need for some existing jobs as businesses switch to faster turnaround options and cost-cutting measures.

“It will also need big capital expenditure infrastructure to link everyone, thus must use economies of scale to cover larger areas and better return on investment.

“Therefore, those who cannot adapt will then be left behind and will not be able to reap the benefits.”

Aimi Zulhazmi said the fast growth of the gig economy will pre sent various
challenges, largely regulating payment for gig workers. Secondly, sufficient IT infrastructure in both urban and rural areas where the services could be
delivered and thirdly, education and training.

“Fourth, coordination of business chambers and industry regulations. Finally, financial technology especially the banking industry to counter the growth of e-wallet as a medium of transaction.”

The idea of making extra money also makes the gig economy more appealing to people looking to earn additional income.

One such service that saw an uptick is the mobile application which provides car battery delivery, replacement and installation services that quickly changes the traditional way of getting such services done in a workshop.

It is currently looking for more mobile battery replacement technicians as demand for such services increases tremendously during the MCO as batteries suffer from prolonged vehicle inactivity.

Foodpanda Malaysia also witnessed the number of its recruited riders positively increased over the MCO period.

MD Sayantan Das said the week the MCO was implemented in Malaysia, there was a 7.5% increase in new riders. Foodpanda has also seen a 37% increase in rider applications.

He believes the demand for online delivery service will continue to rise as the platforms are expanding choices and convenience.

“Post-MCO, we will enter what has been coined the ‘new norm’ whereby we will see consumers continue to take precautionary measures in their daily lives.

“Because of this, we believe that the online delivery space will continue to grow and be the first choice for many consumers who are looking to purchase their daily needs,” he told TMR.

To accommodate the developing situation, Foodpanda welcomes anyone who may need temporary work opportunities to contact the company via its rider recruitment site, he said.

Foodpanda has provided its riders with the necessary equipment and tools to ensure the health and safety of not only themselves, but customers as well.

The online tutoring industry is also experiencing growth as people obey quarantine rules, said Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid.

He said this will benefit young graduates, especially those who excel in Mathematics, English and Science, to teach online classes.

“Not to mention, business coaching and even investment mentoring programmes can be done online on a major scale.

“These are very knowledge-based and with technology, the boundaries are limitless. So, the adoption is very crucial here,” he told TMR.

However, Mohd Afzanizam said the childcare sector could suffer from social distancing measures as parents tend to avoid group settings.

He explained the advantage of the gig economy is its flexibility and there is no fixed contract. Basically, they are their own bosses.

“However, the social safety net such as funds for retirement and healthcare plans, they have to do it themselves. But again with technology, such services can be procured online.”

Source: The Malaysian Reserve

Posted on : 18 May 2020