Administering the Gig Economy: Unlocking Opportunities, Tackling Challenges

Administering the Gig Economy: Unlocking Opportunities, Tackling Challenges

Nurazeera Farisya Mohammad Faris^1,4, Siti Zubaidah Abdul Kadir^2,4, Khairul Rahmat Ahmad^3,4, *Nazni Noordin⁴

¹Sunway Medical Centre Penang, Malaysia

²Pertubuhan Peladang Kawasan Merbok, Kedah, Malaysia

³Pejabat Kesihatan Daerah Yan, Kedah, Malaysia

⁴Faculty of Administrative Science and Policy Studies, Universiti Teknology MARA, Malaysia

*Correspondence Author

DOI: https://dx.doi.org/10.47772/IJRISS.2025.9010106

Received: 15 January 2025; Accepted: 20 January 2025; Published: 04 February 2025

ABSTRACT

The rise of the gig economy has changed the landscape of economic sector since Malaysia implemented the Movement Control Order (MCO) on 18 March 2020 during Covid-19, bringing new opportunities and challenges for individuals, businesses and policymakers. The dual nature of the gig economy is examined by confirming its ability to provide flexible work arrangements to foster entrepreneurial spirit and to enable businesses to access labour from the global talent market. At the same time, it also looks at some of the challenges in the opportunity, such as intermittent income and lack of social protection. The systematic article review technique was applied in this article to synthesize literature on gig economy opportunities and challenges. This paper outlines strategic approach to capitalise on the gig economy opportunities, to ensure that workers and taxpayers receive the estimated benefits of the gig economy. It also helps policymakers and organisations to strategies to ensure sustainable and equitable growth in the rapidly growing sector.

Keywords: Gig Economy, Gig worker, Flexible Work, Freelancing, Policy reforms.

INTRODUCTION

The word “gig” is a term borrowed from the music industry which used to refer to a single performance or engagement in which a musician or band would perform. The expression has grown to be more generally used to describe any brief or transitional work placement, particularly within the freelance or contract work domain. In gig economy, gig refers to any tasks, projects and services that the workers do for their customers or clients flexibly and on demand. Gig examples include food delivery, ride-hailing drivers, freelance writers, graphic designers or handypeople. The term encompasses the notion of digital platforms enabling task-based, commodified, independent work as opposed to the traditional, long-term employer-employee posting. The gig economy is a free market system (Paul Hype Page, 2020) in which temporary positions are common and organizations hire workers for short-term engagements (Lutkevich & Gillis, 2022). Now this economy, the increased opportunities have enabled workers to work from home or other locations. This also opens up flexible work hours for those with family duties or other obligations. You can also find job opportunities in the gig economy for people with various skills. Consequently, more individuals have access to healthy working environments such as good pay and flexible working hours (Paul Hype Page, 2020).  The trend has transformed the nature of work and workplace expectations for both employees and employers (Shakil, 2024).

In recent years there have been a significant increase in gig economy in Malaysia through e-hailing services such as Grab car, Foodpanda, Lazada and etc when services started to offering in Malaysia and gained popularity during the MCO implementation through the Covid-19 pandemic where many stayed to have lost their jobs (Statista Research Department, 2024). Additionally, the flexibility in time management and choice of working style offered by gig economic jobs is appealing to Gen Z. That level of freedom isn’t usually afforded in 9-to-5 jobs, where time-worn practices typically take over. According to a World Bank press release, gig economy accounted for 12% of the global labour market as of 2023 and the estimation is much higher than what it was before (World Bank Group, 2023). Furthermore, it states that gig economy is widespread and have a total of 545 online gig work platforms, spanning 186 countries, connecting workers and clients. According to Ahmad, (2021), around 26% of 15.3 million Malaysian workforce are engaged in the gig economy of the country. In addition, data from Department of Statistics Malaysia (DOSM) shows that the share of the gig economy in Malaysia GDP started to rocket from 18.5% (2018) to 30% (2020). There is a lot of independence and flexibility that comes with doing part-time jobs through the gig economy, but the employment benefits for gig workers can be improved. For example, thus, as stated by the Malaysian government in Key Statistics of Labour Force in Malaysia, August 2020, must increase the social security of gig workers through Global Online Workforce Programme (GLOW), global career opportunities through digital freelancer. The Government of Malaysia is exploring the establishment of a Gig Economy Commission to be included in the 2024 budget. The commission shall be responsible for tackling the issues and rolling out the initiatives to ensure the welfare of gig economy stakeholders. Additionally, to achieve such people to fully explore this potential, the Malaysian government has committed to creating an ecosystem that stimulates the development of the gig economy according to the recently published 12th Malaysia Plan (2021-2025).

Prior to the gig economy, work arrangements tended to be permanent and full-time, where employees were given a job description along with a predictable salary and benefits, including health care, pensions and retirement plans. Job security had been relative, workers were protected by labour laws that prevented them from getting fired on a whim. Nevertheless, flexibility was minimal and employees maintained rigid hours assigned by managers, while access to opportunities was frequently restricted by where someone lived. Unlike, the gig economy, where work is more flexible and dynamic. Flexibility was especially beneficial to high-performing workers who worked independently. Access to global opportunities exists through online platforms where individuals can apply their skills in different industries and markets (Collins et al., 2019). Strategic management is the act of establishing, executing, and reviewing decisions and actions that allow a company to meet its goals and sustain a competitive advantage in dynamic environments. Strategic planning consists of assessing internal and external variables, identifying long-term objectives and creating strategies to respond to shifting market conditions. Strategic management empowers organizations to thrive in uncertain and competitive environments by aligning resources, capabilities and strategies.

With the growing gig economy, we will see even more demand for concentrate management as the gig economy is here to stay, and organizations must either adapt or perish as a result of this shifting area of employment and business. Indirectly, the future of work enables strategic advantages like access to a flexible, global workforce, low overheads, and scalability based on demand. These platforms allow businesses to connect with a global talent pool, work on a project basis and foster innovation while increasing efficiency. But the gig economy comes with challenges, including strategic afflictions. It also raises challenges for some organizations related to worker retention and income instability, as well as ethics around fair labour practices. Moreover, regulatory ambiguities and the risk of over-dependence on gig workers indicate that organizations must devise adaptive approaches that align agility with responsibility. Strategic management helps organizations navigate the opportunities of the gig economy while minimizing potential threats. This integration of the gig economy in long-term plans is not only an approach of businesses for sustaining competitive advantages in the changing global environment.

LITERATURE REVIEW

The gig economy is defined as short-term, flexible employment that is frequently made possible by online resources (Sankararaman et al., 2024). Gig workers frequently do a variety of tasks, from multimedia development to virtual help (Roy & Shrivastava, 2020). The gig economy is a worldwide phenomenon that has expanded dramatically because of globalization and technology improvements (Warner, 2020).

Worker Experiences in the Gig Economy

People who engage in the gig economy appreciate the fact that they have the freedom to choose the time to work and the tasks to perform. However, even though the flexibility of work is one of the main benefits, it is countered by issues such as irregular earnings, the lack of stable employment, and absence of perks that are characteristic of formal jobs. For example, an analysis of gig workers in the online tutoring market indicated that workers, despite their independence, faced negative job satisfaction due to low rates, lack of payment for the time preparing for lessons and unfair rating systems, all of which lowered their employment stability and mobility (Jinyoung Hwang, 2024). Other research on the Uber driver has shown that their ability to set their own working hours is to an extent overshadowed by the fact that they always have rating systems to consider and are tipped poorly, if at all, in the non-peak hour which makes them skeptical about using gig work as their primary source of income (Chen et al., 2017).

Gig economy workers are in fact increasingly struggling mentally. The combination of working remotely, needing to complete task-oriented projects, competing with others for enough gigs and the desire to earn considerably more may greatly contribute to stress. This becomes apparent, especially on platforms with more stringent performance measures, where workers are required to work for extended periods of time with few breaks and do not interact much with their co-workers.

Policy and Regulation for the Gig Economy

The fast expansion of the gig economy has prompted calls for regulatory reform. A major concern is that gig workers are classified as independent contractors, which means they are not eligible for typical employee benefits and protections such as minimum wage regulations, health insurance, and unemployment insurance (Uchiyama et al., 2022). This has sparked legal debate about whether gig workers should be classed as employees to ensure fair treatment and access to these benefits. Some policy options propose a hybrid paradigm in which gig workers maintain their independence while receiving certain benefits, such as healthcare and retirement savings, that are portable across many gig platforms (Chen et al., 2017).

In addition, taxation remains a major issue for gig workers. Gig workers, as independent contractors, must manage their own taxes, but the lack of standardized reporting from platforms complicates the process. Some platforms only provide tax paperwork to workers who meet particular wage thresholds, leaving others without clear documentation, causing uncertainty and making it harder for workers to file their taxes correctly (Uchiyama et al., 2022). To address these concerns, some politicians demand clearer tax legislation that forces platforms to offer better documentation and make tax filing easier for gig workers (Chen et al., 2017).

Workers Satisfaction towards Gig Economy

The link between the online gig economy and worker satisfaction is complex. Research indicates a considerable favorable relationship between the gig economy’s career and economic rewards and overall worker happiness (Yumang, 2024). Opportunities for job advancement and financial independence are significant drivers of this fulfilment. However, health-related difficulties and operational challenges have a lower influence on overall happiness, implying that the benefits of flexibility and income potential frequently exceed these disadvantages.

Benefits of the Online Gig Economy

One of the most significant advantages of the online gig economy is its ability to promote career growth and economic advancement. Many individuals see freelancing as a method to achieve professional fulfilment since it allows them to pursue new career prospects outside of the limits of traditional employment. According to research, workers in the gig economy frequently enjoy a sense of accomplishment and professional advancement, especially as they obtain more clients and broaden their skill sets (Bernard, 2021). Furthermore, the economic advantages of gig employment are significant. Competitive incomes frequently exceed those in traditional employment, with freelancers enjoying the flexibility of setting their rates and managing their workload (Statista, 2022). Flexibility is another significant benefit of gig labor. Working remotely and on one’s own schedule gives employees more control over their personal and professional lives. This flexibility not only saves time and dollars on commuting, but also allows employees to maintain a better work-life balance. According to research, such autonomy is a key motivator for people who choose gig labour over traditional employment (Graham et al., 2017).

Challenges and Risks of the Gig Economy

However, it is critical to understand that the internet gig economy has significant disadvantages. For example, gig workers must deal with a variety of general health difficulties caused by a lack of sleep, sedentary behavior, and social withdrawal. According to International Labour Organization (2019), teleworking exacerbates such work-related risk factors by requiring employees to spend most of their time watching screens at odd working hours. These diseases pose significant long-term risks to workers’ mental and physical health. Operative issues affect gig workers too with those in developing nations being more affected. The availability of the internet and electricity is integral, but a good number of workers have disruptions in such critical services. Such issues can result in unstable incomes and low productivity (Graham et al., 2017). Moreover, the ever-present difficulties which include competition, getting clients, and upskilling on a regular basis are common. The expansion of the gig economy has brought about a growing demand for skilled workers on digital markets and social media platforms, leaving most employees behind the back (Uchiyama et al., 2022). It should be one of the achievements when they have skills in digital market more than on hand job. These skills are limited for those who want to sacrifice doing two jobs in one meantime.

Preposition (Assumption)

The internet gig economy has transformed traditional job structures, provided flexibility and economic benefits while also posed distinct obstacles. This study looks at the assumptions used in the article Impact of Online Gig Economy on Worker Satisfaction (Yumang, 2024) to better understand the dynamics of gig work and its implications for worker satisfaction, productivity, and well-being.

Career Development as a Positive Outcome

A key assumption is the online gig economy promotes career development by offering workers a variety of positions and skill-building opportunities. The ability to work on different projects allows freelancers to broaden their skills and pursue new opportunities. Yumang (2024) observed that many gig workers see freelancing as a kind of professional development, which is consistent with Bernard’s (2021) results, which emphasize the growing trend of people quitting traditional employment for the gig economy to pursue more satisfying careers.

Economic Advantages Drive Worker Satisfaction

Another assumption is that competitive remuneration in the gig economy leads to increased worker satisfaction. Freelancers frequently report higher wages than typical workers, particularly in high-demand fields like digital marketing and software development (Statista, 2022). Yumang (2024) discovered that many gig workers cherish the financial independence and stability afforded by freelancing, which allows them to support their families and develop financial security. This shows that economic advancement is a primary motive for working in the gig economy.

Operational Stability is Critical for Productivity

The reliance on digital infrastructure leads to the notion that regular access to energy and the internet is required for productivity. In developing nations, where many gig workers are based, disruptions in these services have a direct impact on revenue and efficiency. For example, Yumang (2024) emphasized that operational difficulties, such as inconsistent internet connections, were important impediments to success for freelancers in the Philippines, which supported Graham et al., (2017) findings on the challenges faced by gig workers in developing economies.

Flexibility is both a benefit and a Constrain

Flexibility is frequently cited as one of the most tempting characteristics of the online gig economy, allowing workers to escape the tight schedules of regular 9-to-5 occupations. Gig workers can choose when, where and how much they work, adjusting their schedules to meet their personal and professional demands. This level of autonomy is a crucial driver of freelance satisfaction since it allows them to balance family responsibilities, pursue personal hobbies and escape the stress of regular commutes (Kuek et al., 2015; Yumang, 2024). However, the same flexibility can also operate as a constraint, posing obstacles that reduce its benefits. For many gig workers, flexibility means better work-life balance and more control over their employment. Freelancers can choose the types of jobs they work on, their working hours, and even their work settings.

This autonomy is especially important for those who want to pursue artistic or entrepreneurial endeavors in addition to their gig work. Flexibility also allows gig workers to schedule their most productive hours. For example, people who are more alert and creative in the evening might plan their workloads accordingly. Furthermore, unlike typical professions with tight timetables, freelancers frequently have the flexibility to take breaks when required, which can improve mental health and minimize burnout.

METHODOLOGY

This paper used the systematic article review technique to synthesize literature on gig economy opportunities and challenges. This systematic approach was selected for its capacity to guarantee a transparent, replicable and comprehensive review of the topic. This article used various academic databases (Scopus, Emerald Insight and Google Scholar) to search the literature. Data were sorted based on keywords, including “Gig-Economy”, “Flexible Work”, “Strategic Management” and “freelancing”. The search was restricted to peer-reviewed journal articles, conference papers and reports published from 2017 to 2024 to include recent and relevant developments within the field. The inclusion criteria for this review were articles published in the form of English studies highlighting the opportunities and challenges in the gig economy. All articles reviewed were cited and acknowledged properly to maintain ethical research standards.

FINDINGS

The gig economy has grown to become a forcing factor in the global labor market where short-term and flexible work opportunities are provided, similar to a freelance job, and are usually mediated by an online platform (Sankararaman et al., 2024). The model enabled workers to participate in various tasks including creating multimedia and being a virtual assistant (Roy & Shrivastava, 2020). Globalization and technological developments also have driven the explosive growth of the gig economy, enabling more individuals to work remotely or task-based in diverse industries and areas (Kässi et al., 2022).

The most important benefit of gig economy work is that it provides autonomy to workers. While freedom over one’s schedule, task selection, and even location have all been described as key advantages of remote work (Graham et al., 2017). This adaptability allows workers to balance work-life commitments, eliminate long commutes and use their time more effectively for both personal and professional interests. On top of that, gig work is a legitimate step toward career development. Freelancing has been associated with improved skills, larger client rosters and increased job satisfaction as freelancers tackle a wide range of projects (Bernard, 2021). Financially, Gig workers can earn competitive wages, given high-demand fields like digital marketing and software development allow freelancers to set their rates and workloads (Statista, 2022).

However, these advantages notwithstanding, because the gig economy poses major challenges. This gap is driven by the widespread nature of income instability, with workers facing challenges in earning steady wages owing to the on-demand nature of the work (Chen et al., 2017). This financial uncertainty is heightened by the lack of traditional job benefits like health insurance, pensions and paid leave. Moreover, gig workers encounter operational challenges, especially in developing countries where internet access and electricity outages obstruct productivity and income generation (Graham et al., 2017). The competitive pressure of gig work also has its mental health and physical health concerns. Long hours, sleep deprivation and social isolation are common, aggravated by the strict performance indicators imposed by many platforms (International Labour Organization, 2019).

Regulatory ambiguities, unfortunately, complicate the matter in the gig economy. As independent contractors, gig workers are ineligible for legal protections such as minimum wage, unemployment insurance, and standardized tax reporting (Uchiyama et al., 2022). Moreover, the tax implications of gig work are often ambiguous, with platforms offering inconsistent documentation that leaves gig workers confused about how best to report their earnings for tax purposes (Chen et al., 2017).

Table 1 the opportunities and challenges of Gig Economy

DISCUSSION

The gig economy provides interesting flexibility but also poses significant challenges, showcasing its impact on workers, businesses, and policymakers alike. Gig workers now have more control over their own schedules and what they do, which transforms conventional working. This freedom, for many, affords an attractive alternative to the more pedantic frameworks of traditional 9-to-5 employment. It allows the workforce to balance work with life commitments, side projects or artistic pursuits. But this freedom often comes with a price. Gig work is less secure for long-term stability, as many gig workers experience financial insecurity situations based on irregular income streams and lack of employment benefits, including health care (Chen et al., 2017).

From a business perspective, the gig economy provides strategic benefits such as accessing a worldwide talent pool, minimizing overhead, and dynamically scaling operations. Digital platforms including Uber, Upwork, and Fiverr, have shown how businesses can use gig work to efficiently address project-based needs. But reliance of gig workers to these presents’ challenges. Ethical issues surface regarding fair pay, job security, and the fair treatment of workers as well. Moreover, it’s challenging for businesses to build loyalty among gig workers when they’re constantly switching to another platform to gain a higher pay rate. One solution to these problems is implementing ethical work practices by those companies’ offering services, such as fair compensation, training and career advancement, and communication with gig workers.

To tackle the systemic issues of the gig economy, policy reforms are essential. The gig economy’s classification of workers as independent contractors has resulted in major gaps in worker protections, exposing gig workers to the risk of exploitation and financial instability. Combining the independence of gig work with core protections, including health insurance, retirement plans, and paid leave as hybrid employment models, must be considered by policymakers (Chen et al., 2017; Uchiyama et al., 2022). In addition, clearer tax legislation is needed to standardize the reporting requirement for gig platforms, helping workers comply with their tax obligations (Uchiyama et al., 2022).

The mental and physical health issues that gig workers encounter also need to be addressed. The individualistic and competitive nature of gig work can contribute to stress, burnout and health problems. To mitigate these challenges, proactive steps need to be taken to promote worker well-being, including transparent rating systems, mental health resources, and flexible payment options to alleviate financial stress (International Labour Organization, 2019). Likewise, investments in digital infrastructure are crucial, especially in developing countries, where intermittent internet and electricity supply reduce gig workers’ productivity (Graham et al., 2017).

CONCLUSION

The gig economy is a transformative force reshaping the global labor composition, promising a new era of flexibility and opportunities for workers and businesses. But this advantage brings serious problems for their resolution to guarantee fair and sustainable outcomes. Gig work often brings income instability, lack of benefits and health risks, which the workers felt that the autonomy and career development that come with it are overshadowed. For businesses, the gig-economy provides an opportunity to innovate and adapt to changing market environments, but brings ethical and operational dilemmas.

A sustainable gig economy can be achieved through collaboration among stakeholders. Policymakers must balance regulatory reforms that championed worker rights with the flexibility that are crucial to gig work. Hybrid employment models alongside standardized tax reporting frameworks can help bridge critical gaps in worker protections while improving compliance in the future. In addition, in areas where access to these essential services is thin, investments will need to be focused on digital infrastructure to provide operational stability.

To restore trust and loyalty from gig workers, businesses must practice social responsibility. They include fair compensation, upskilling, and mental health supports, which help the well-being of gig workers. Platform can play a crucial role if they ensure transparency and education, to help workers thrive.

As we move forward, the gig economy will only become a larger player in the field of labor market. When addressing challenges collectively, gig economy acts as a catalyst for innovation, career advancement, and growth in the economy, at the same time maintaining justice and equity to all its participants.

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