Putrajaya should focus on developing the business environment rather than on individual business decisions, a think tank said over reports about government stepping in to solve a dispute between food delivery company Foodpanda and its riders over a new payment scheme.

While the government can formulate a framework to regulate a gig economy, it is unwise to instruct companies about their business decisions, The Institute for Democracy and Economic Affairs, or IDEAS, said.

 “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 said.

It was reported on Tuesday when Youth and Sports Minister Syed Saddiq Syed Abdul Rahman threw his support behind Foodpanda riders protesting against a new payment scheme that would affect their daily income.

The welfare of workers should not be sacrificed, urged the company to revert to its previous payment scheme, Syed Saddiq said yesterday.

Although riders get more commission for every order delivered, from RM4.50 to RM7, then the new payment scheme does away with paying riders by the hour.

Before, riders got RM4 per hour with an additional payment of between RM3 and RM5 per order, based on their performance. 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, Todd said.

He pointed out that the government should be clear about its focus on the business environment, not individual businesses. He cited an example of the 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.”

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, he said.

However, the local motorcycle ride-hailing service Diego Ride founder, Nabil Feisal Bamadhaj welcomed the government’s intervention in the Foodpanda dispute

According to Nabil, it showed the authorities are listening to the voices of the deliverymen and cared for their livelihood.

“It’s just a suggestion and it’s up to the private sector to decide on what to do.” In a gig economy, performance equaled earnings, and that the more work a person did, the more they could earn, he said.

Read more related articles about Malaysia Business News: https://www.malaysiajournal.com/news_type/all-the-news-of-business/
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