The Financial Health of Gig Workers in Malaysia

The COVID-19 pandemic has brought home the extent to which technology is reshaping our economies and industries. One such industry is the gig economy, a labour economy of sorts where speed and convenience are the norms, characterized by temporary or short-term work opportunities that are sometimes completed within minutes.

Like traditional employment, gig work can be performed on a part-time or full-time basis. However, unlike traditional employment, each gig – or job – is usually performed at the discretion of the gig worker. In the ride-hailing/delivery industry, in particular, these gigs are completed in minutes. The decisions of which gig to undertake and how many are the prerogative of the gig worker, allowing for flexible hours and control over one’s schedule and clients to a degree inconceivable in traditional employment.

Asia cemented its status as a gig economy hub in the last year, with the region emerging as a hotspot for freelance work in both the formal and informal economy. Yet since gig work is not affiliated with an employer, gig workers lack access to benefits and social security mechanisms that often accompany traditional jobs. Gig workers, like other categories of informal workers, face challenges in accessing services such as financial products, skills development or social support. In Malaysia specifically, declining savings rates, particularly during the Movement Control Order (MCO) – a lockdown imposed by the Malaysian government to curb the spread of COVID-19 – meant gig workers and those with a lower income struggle the most with having a stable income.

UNCDF and its partners in Malaysia- -GoGet, an on-demand job platform, and Pod, a fintech start-up, – are addressing the issue of low savings among low- and moderate-income (LMI) Malaysians, particularly youth, through a micro-savings app eponymously called Pod. Pod was piloted both as a standalone app and on GoGet’s platform in May of 2019. The Pod app enables LMI individuals to put aside short-term or emergency savings in a variety of ways. Pod targets youth in the age range of 15-35 years but has been popular among older LMI people as well.