KUALA LUMPUR: Economists caution that delivery fees and rates may rise significantly if the government implements its Malaysian Gig Economy Commission (SEGiM) plan.
On the positive side, they say such a commission would likely bring regulations to safeguard workers' rights.
However, the downside includes reduced business flexibility and increased costs for both businesses and consumers.
Sunway University economics professor Dr Yeah Kim Leng said the impact would depend on the regulatory scope of the commission.
Gig workers, he said, would be expected to receive some, if not all, of the benefits entitled to regular employees under labour laws.
"The terms and conditions for 'contract of service' and 'contract for service' will be more clearly outlined by the commission as it establishes a new regulatory framework for the gig economy, similar to developments in Europe and the United States.
"Gig workers operating under 'contract for service' are anticipated to receive benefits like Employment Provident Fund (EPF) contributions, overtime pay, insurance, and medical coverage.
"Regulating this sector is likely to increase the costs of home delivery and e-hailing services, as the remunerations for gig workers will go up," he told the New Straits Times.
Yeah added that while the gig commission needs to be established promptly to safeguard gig workers' rights and well-being, it should involve close collaboration and negotiation with industry players.
He said this was crucial to ensure the new regulations are not overly drastic, leading to market disruptions and the overall economy.
"There will be margin compressions for industry players, especially those unable to innovate and enhance efficiency and productivity.
"There could also be a shakeout, with weaker players forced out if the cost increases result in a decline in market demand."
Universiti Teknologi Mara faculty of business and management senior lecturer Dr Mohamad Idham Md Razak said the extent of the cost increase was still uncertain.
Still, platform companies might try to optimise operations or absorb some costs to remain competitive, he said.
"If SEGiM mandates social security benefits and improved working conditions for gig workers, platform companies might face increased operating costs, which could be passed on to consumers through higher service fees or prices.
"Consumers might be willing to pay slightly more for gig services knowing that workers receive fair wages and benefits. This willingness could depend on the service's perceived value and the pricing changes' transparency.
"However, some consumers might be sensitive to price increases and shift towards alternative options or traditional service providers, impacting demand and potentially forcing platform companies to adjust their pricing strategies," he said.
Idham said the government could play a role in establishing regulations and offering subsidies to influence the final cost of gig services.
"Government subsidies for social security contributions could help reduce the burden on platform companies and potentially minimise price increases for consumers.
"Clear and transparent regulations can ensure fair competition and prevent excessive cost overruns, ultimately benefiting consumers and businesses."
Previously, it was reported that Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi said he was committed to setting up SEGiM, which is awaiting approval from the cabinet.
Zahid, who is also rural and regional development minister, had said this when he was asked to comment on the protest held by e-hailing drivers and p-hailing riders against hailing services company Grab Malaysia's move to revamp the earnings framework.
He had said he wanted to ensure the establishment of SEGiM was realised, to safeguard the welfare of more than 1.2 million gig workers.
