Workers’ social security major concern in gig economy, says expert

E-hailing riders are among those in the gig economy who do not have social security.

PETALING JAYA: An expert has raised concerns about social security for workers in the gig economy – an industry set to grow by 55% each coming year.

Adviser at the Institute of Labour Market Information and Analysis (ILMIA) with the ministry of human resources Chandra Mohan said social protection for these workers was almost non-existent.

“You look at Food Panda and Grab. Should anything happen to them (the e-hailing drivers and riders), other than their normal vehicle or personal insurance, there is no social security,” he told FMT.

“They need to be protected. I’m not talking about pension, but at least protection against accidents.”

He added that even with the self-employed scheme available at the national Social Security Organisation (Socso), workers in the gig economy were not making contributions for social protection, even though the amount was very little.

“One reason why I think the take-up rate (for Socso) is low is a lot of them are doing it on a part-time basis. They may be getting Socso cover in their company (at their day-jobs).

“But if any accidents happen while they are working a gig job, they won’t get covered by Socso.”

He added that the government should continue to encourage gig workers to take up the self-employed social protection scheme.

At the same time, he also questioned if it was convenient to register for the self-employed scheme.

“Could the low take-up rate be because it is difficult to register? How can we make it easier for people to register?” he asked.

Meanwhile, Chandra cautioned that making contributions to Socso compulsory for gig workers might introduce a new set of problems.

He pointed to a new law which came into effect in California, in the US, last week called the Assembly Bill 5, or AB5.

AB5, which was passed in the state last October, was intended to reclassify gig workers as regular employees and give them workplace benefits, such as unemployment and disability insurance.

Workers would also get to enjoy full rights stated under California’s Labour and Employment laws.

“If you look at the California Bill, the minute the bill was passed in October last year, most of these e-hailing companies moved their operations out of California. All of these people lost their jobs,” Chandra said.

“There is a need to regulate, but at the same time we cannot over-regulate,” he said, adding that it was a balancing game.

Chandra warned that in the absence of social security, society would need to bear the costs for the workers’ treatment in the case of any accidents.

The gig economy in Malaysia is expected to grow by 55% every year. Chandra predicted that the industry might soon generate nearly 50% of the country’s economy.

A gig economy is a free market system where temporary positions are common and organisations hire independent workers for short-term engagements.

There are presently 2.2 million gig workers registered with the Malaysian Digital Economy Corporation (MDEC), but the number could be higher, he added.

“Nobody knows what is the actual number of gig workers,” Chandra said.

Just recently, motorcycle e-hailing platform Dego Ride was officially launched after it was banned for safety concerns in 2016. It was reported that it would create 5,000 jobs for B40 youth in the Klang Valley.

Not long after, e-hailing giant Grab launched its GrabBike e-hailing service. Country head of Grab Malaysia Sean Goh said GrabBike was expanding into Malaysia after its success in Thailand, Vietnam and Indonesia.

“Now we have to wait for the next six months to see what kind of regulations the government would be coming out with for Dego Ride and GrabBike, and I’m sure Gojek (from Indonesia) would also come into the local market,” Chandra said.