From Ramlan Abdullah

Indonesia is setting a new benchmark for the gig economy, not by imposing heavy-handed restrictions, but by fostering a “light-touch” regulatory environment that prioritises partnership between the state and digital platforms.

While the government, through Commission IX of the DPR RI – Indonesia’s parliament – is updating the manpower law to acknowledge platform workers, the real success story lies in how they have invited the private sector to co-create solutions. Rather than stifling the industry with traditional employment rigidities, Indonesia is opting for a flexible framework where platforms are encouraged to innovate on social safety nets.

This collaborative model suggests that a thriving digital economy requires the government to act as an enabler rather than just an enforcer, allowing the market to solve complex welfare issues efficiently.

The Indonesian model: partnership in action

Indonesia’s approach recognises a critical economic reality – the gig economy, contributing Rp91.7 trillion to the gross domestic product in 2023, thrives on flexibility. With 24 million workers involved, applying outdated industrial-era laws would risk choking the sector.

Instead, the government has focused on setting broad baselines for protection while leaning on platforms to drive implementation.

A prime example of this public-private synergy occurred this month, when Grab Indonesia launched its Rp100 billion “Grab for Indonesia” programme. This initiative was not a result of punitive compliance, but a proactive measure to support the national agenda.

The programme creates a sustainable safety net through three pillars:

• Social security integration: providing free “BPJS Ketenagakerjaan” coverage (work accident and death benefits) for high-performing drivers.
• Financial incentives: introducing a holiday bonus (Bonus Hari Raya) for outstanding partners.
• Career mobility: utilising GrabAcademy to upskill drivers, helping them transition into merchant-partners or upgrade their vehicle classes.

The launch event, attended by senior ministers and officials from BPJS – Indonesia’s social security agency – alongside Grab’s leadership, symbolised a functional partnership. It demonstrated that when regulations are “light” but clear, private companies are willing to co-invest in national welfare goals, aligning corporate responsibility with president Prabowo Subianto’s vision for an inclusive economy.

Malaysia’s bureaucratic gridlock

In contrast, Malaysia’s approach warns of the dangers of trying to force-fit gig work into rigid regulatory boxes without adequate industry collaboration.

While the passing of the Gig Workers Bill in September 2025 was a step forward in defining gig workers, the implementation has been marred by bureaucratic friction. The suspension of the Perkeso pilot scheme highlights the failure of a “compliance-first” mindset that ignored operational realities.

The core issue was technical rigidity – without a unified clearinghouse, multi-platform workers faced the risk of duplicate contributions, and platforms faced administrative nightmares.

By attempting to mandate strict contributions before establishing a flexible partnership mechanism with the platforms, Malaysia created confusion rather than protection, leaving 1.2 million gig workers in limbo.

The way forward – smart regulation

The divergence between the two nations offers a clear roadmap. Indonesia’s progress proves that the best way to protect gig workers is not through over-regulation, but through smart, light-touch frameworks that facilitate private sector contributions.

For Malaysia to catch up, it must pivot away from unilateral mandates and move toward a partnership model. This involves:

• Establishing a centralised clearinghouse: working with platforms to create a unified data system that prevents contribution duplication.
• Incentivising over mandating: encouraging platforms to offer benefits (like upskilling and insurance) through tax incentives rather than rigid legal compulsion.
• Co-regulation: allowing the industry to self-regulate on operational matters (like rest times) while the government sets the minimum standards.

Indonesia has shown that political will combined with private sector innovation is the fastest route to a sustainable ecosystem.

Malaysia’s regulators must now decide whether to continue down a path of rigid enforcement or embrace the collaborative approach that is already delivering results for millions of workers across the Strait.

Ramlan Abdullah is an FMT reader.

The views expressed are those of the writer and do not necessarily reflect those of FMT.