Policy responses so far have been cautious and slow, relying heavily on voluntary participation
THE gig economy has become an unavoidable part of Malaysia’s labour market. Ride-hailing drivers, delivery riders and online freelancers are now part of daily life. Digital platforms often present this shift as innovation, promising flexibility, independence and new opportunities. Yet, for many Malaysians, especially young people and B40 households, the reality of gig work is far less encouraging.
Official figures show that more than three million Malaysians are classified as own-account workers, a group that includes most gig workers. This number has risen steadily since the pandemic, reflecting not only technological change but also deeper problems in job creation and wage growth. For many, gig work is not a preferred choice, but a response to limited employment opportunities and the rising cost of living.
Income data highlights the scale of the challenge. Surveys show that nearly three-quarters of gig workers earn less than RM3,000 a month after expenses, with more than half taking home below RM2,000 often after long working hours. Costs such as fuel, vehicle maintenance, mobile data and platform fees are fully borne by workers. At the same time, earnings fluctuate with demand and algorithm-driven pricing, making income unpredictable. Young Malaysians are particularly affected. Many riders and drivers are under 30, including diploma and degree holders who struggle to find stable jobs that match their qualifications. What is often described as a temporary stepping stone has, for many, become a long-term reality: one that provides income but little security or career progression.
The most serious gap lies in social protection. Gig workers are not automatically covered by Employees Provident Fund (EPF) contributions or Social Security Organisation (Socso) protection. While voluntary schemes such as EPF’s i-Saraan and Socso’s Self-Employment Social Security Scheme exist, participation remains low. Estimates suggest that fewer than 20% of gig workers are registered with Socso, leaving most exposed to injury, illness or sudden income loss. This raises difficult questions about responsibility.
Platform companies benefit from a workforce that operates outside traditional employment obligations, while workers bear risks that would normally be shared in formal jobs. Although gig workers are labelled “independent,” platforms exert significant control through pricing systems, performance ratings and account suspensions. This imbalance is hard to justify in the absence of basic labour protections.
Policy responses so far have been cautious and slow, relying heavily on voluntary participation. For workers with low and irregular incomes, voluntary contributions are often unrealistic, leaving protection weak and unreliable. This insecurity also affects the wider economy. When large numbers of workers earn unstable and low incomes, household spending falls, small businesses suffer and long-term growth is constrained. Employment figures may look healthy, but they mask underemployment and income insecurity among those juggling multiple gigs.
Malaysia does not need to reject the gig economy, but it does need to regulate it. Flexibility cannot replace fairness. Without clear legal recognition of gig workers, shared responsibility for EPF and Socso contributions and enforceable income standards, gig work will continue to mean insecurity. An economy should be judged not by how many people are working, but by whether work allows people to live with dignity. Until that changes, the growth of the gig economy should be seen not as a success, but as a warning.
Dr Asraf Mohamed Moubark and Dr Seri Mastura Mustaza are from the Department of Electrical, Electronic and System Engineering, Faculty of Engineering and Built Environment at University Kebangsaan Malaysia. Comments: [email protected]
