IDEAS said that while the government can formulate a framework to regulate a gig economy, it is unwise to instruct companies about their business decisions.
The Cabinet has urged online food delivery company Foodpanda to reinstate its original payment scheme to ensure the welfare of their riders, said Youth and Sports Minister Syed Saddiq Syed Abdul Rahman.
He said the government believed in free-market competition, but it cannot be at the expense of the workers.
“After hearing the story of both parties (Foodpanda management and riders) I brought the issue to the cabinet today. The Cabinet has suggested that Foodpanda reinstate the original payment scheme to ensure the welfare of the riders,” he said in a statement yesterday.
Syed Saddiq said the government would look for ways to ensure a more competitive market for the players of the sector, especially when there are those who claim they control the market.
“For the long-term plan, the cabinet has also decided for the Youth and Sports Ministry, the Human Resources Ministry and the Domestic Trade and Consumer Affairs Ministry to form a special committee to delve deeper into the issue of gig economy.
“There are many young people who are full-time or part-time riders. They need full protection to supplement their income. We have to take responsibility to ensure their future is taken care of,” he said.
On Tuesday, he had met with the management of Foodpanda in his office before holding a meeting at his residence to hear the complaints of Foodpanda riders.
Meanwhile, he said Foodpanda also claimed that they had great market control and most of their riders except in Johor had already agreed to the new scheme.
“This is inaccurate because riders from Penang and Negri Sembilan are also opposed to Foodpanda’s decision,” he said.
It was reported that about 200 Foodpanda riders staged a protest against the new payment scheme on Monday outside the company’s headquarters.
On Tuesday, the Human Resources Ministry in a statement said it would ensure a win-win situation between Foodpanda riders and their management over the company’s decision to revise its service fee, resulting in reduced payments for riders.
Meanwhile, a think tank says Putrajaya should focus on developing the business environment rather than on individual business decisions, after the government stepped in to solve a dispute between Foodpanda and its riders over a new payment scheme.
The Institute for Democracy and Economic Affairs, or IDEAS, said while the government can formulate a framework to regulate a gig economy, it is unwise to instruct companies about their business decisions.
“It might create concerns within the business community that the government is prepared to intervene in decisions of individual companies when things get political,” IDEAS research director Laurence Todd told FMT.
Todd said there are questions on the government’s impartiality as well as the stability of the business environment from remarks by government leaders on the Foodpanda controversy.
He said the government should be clear about its focus on the business environment, not individual businesses.
Todd also said the government must avoid knee-jerk reactions.
He cited as example e-hailing regulations, which he said was well-intended but flawed.
“The problem was that the regulations which applied to taxis were effectively transferred across, without reflecting on how the underlying business models were different.”
He said the requirement that all vehicles go through Puspakom has resulted in delays, and that a better move would have been to open up the vehicle inspection system.