Avoid having onerous regulations for gig economy, Putrajaya told

The prime minister recently announced that the government plans to regulate the gig economy. (AFP pic)

PETALING JAYA: A think tank has hailed the government’s decision to regulate the gig economy but cautioned it against applying regulations that may make compliance difficult.

Laurence Todd, research director for the Institute for Democracy and Economic Affairs, said the golden rule should be to focus on the objectives of the regulations.

He told FMT he noted that the government’s tendency was to try to apply existing regulations as closely as possible rather than accept the disruption to the conventional economy and go from there.

He gave the example of the regulation of e-hailing services, saying the demands on drivers were too high.

Laurence Todd.

“This is because the requirements were transplanted from those applied to taxi drivers, when the government needed to guarantee certain standards. But technology has reduced the need for these in many cases.

“For example, do drivers need road knowledge when we have GPS? Do drivers need to demonstrate a certain quality of driving beyond what is required for a license when user feedback is so central to the business model?”

The e-hailing service Grab has complained of long waiting times their drivers have to endure to get their the public service vehicle (PSV) licences. It has been reported that this had resulted in 39,000 drivers dropping out of the licensing process.

According to Grab, only 41% of its drivers have acquired the PSV.

Another challenge in regulating the gig economy, Todd said, would be in the area of workplace rights. He said this required finding a compromise between maintaining the flexibility of a company’s model and ensuring the safety of the public from abuse.

He also said the government should not be afraid to change existing approaches to regulation now or in the future

“We should accept that we might not get it right the first time.”

Nabil Feisal Bamadhaj.

Nabil Feisal Bamadhaj, who owns Dego Ride, Malaysia’s first motorcycle hailing service, also voiced support for regulations.

“When the people who work for the gig economy are protected, consumers will naturally benefit from a higher quality of service,” he said. “Definitely, the company will benefit too.”

But he said regulations and guidelines should take a pro-business and pro-productivity approach.

“Otherwise it would defeat the purpose of empowerment of people through technology and providing income access to anyone willing to work, which will be bad for companies like ours.”

Malaysian Trades Union Congress secretary general J Solomon spoke to FMT of the need to register workers in the gig economy with the Employees Provident Fund (EPF) and Social Security Organisation (Socso).

J Solomon.

He said this should be a priority in making the regulations.

“There is also a need to amend the Industrial Relations Act to better ensure the protection of gig economy workers at the workplace,” he added.

He also said gig economy workers should be encouraged to unionise to ensure “win-win interactions” between them and their employers.

“The human resources ministry’s involvement in the exercise should be eliminated so that unionisation can be facilitated without any restriction,” he added.

In his recent announcement of the government’s plan to regulate the gig economy, the prime minister said the idea was to the protect the welfare of workers. - FMT