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Cover Story: SMEs and gig economy to bear the brunt of MCO



IT is a difficult situation currently for businesses and employees everywhere, but it is particularly challenging for small and medium enterprises (SMEs) and those in the gig economy.

While most of these smaller businesses and self-employed individuals would agree that the Movement Control Order (MCO) is necessary to stem the spread of Covid-19 in the country, they cannot help but be concerned should it be extended beyond two weeks.

“For two weeks, we should be okay. Currently, our team is working from home on ongoing projects. We are only a 20-man company, so meeting our staff salaries at the end of the month is not an issue. But, if the MCO is extended for a longer period of time, then I would start to be a little bit more worried,” says an owner of an engineering outfit that works on a project basis.

SMEs represent 98.5% of companies in Malaysia. In its 2018 annual report, Bank Negara Malaysia said there were about one million such establishments in the country.

In terms of contribution to the economy, SMEs accounted for 38.3% of Malaysia’s gross domestic product (GDP) in 2018, or in value terms, over RM500 billion.

A large portion of the SMEs, or 62%, are in the services sector. Any worsening of the Covid-19 situation and extension of the MCO would have a severe impact on them, and the economy.

Dr Yeah Kim Leng of Sunway University Business School says the majority of businesses in the retail, restaurant and food and beverage (F&B) sectors, as well as travel and tourism-related players, are SMEs.

“While SMEs are touted to be agile and adaptable to the changing economic and business environment, they will be affected by a downturn whether it is short or prolonged,” says Yeah, a professor of economics.

SME Association of Malaysia president Datuk Micheal Kang believes that if the MCO is prolonged beyond a certain period and little or no help is given to the sector, there could be over one million job losses in the SME industry alone.

Last Thursday, the government announced measures to help SMEs. It will provide financial assistance — in the form of loan facilities and rescheduling and restructuring of payments — to help these businesses maintain their operations, continue to employ workers and encourage domestic investments.

Banks have also announced relief measures to support affected customers.

A former bank CEO highlights that the many of the local banks hardly service the micro SMEs, except for development banks. In recent times, micro SMEs have turned to peer-to-peer lending platforms to raise funds. 

“Looking at the statistics from crowdfunding platforms offering loans to micro SMEs,  9% are already three months delinquent to date, before the Covid-19 effect. And those that are delinquent less than three months are 12%, and they will turn into non-performing loans (NPL) with this MCO. With an extended MCO, more performing portfolio non-delinquent accounts will start to go into delinquency. This will show up as NPLs in the third or fourth quarter of the year,” he says. 

Italy is an example of how the spread of Covid-19 has gone from bad to worse. The Italian prime minister recently announced that the lockdown of the country would have to be extended beyond April 3 as the death toll spiked. Italy has been on lockdown since March 9.

Economists are expecting the Italian economy to contract by 0.4% this year.

While the fear of an extended MCO is real, small businesses are hoping that the government can lend more support. One of their main grouses — which is being hotly debated — is that they are not allowed to put their employees on unpaid leave during this period.

Kang says there is still a lot of confusion among businesses as to what the MCO means for businesses.

“The guidelines aren’t clear and the message hasn’t been passed down well. So, businesses use their own interpretation and this has caused a lot of confusion. The MCO is not a holiday, businesses are still ongoing, they can work from home. They are also working out how to operate their business during this time,” he says.

While many small businesses are struggling to figure things out, some seem to be well prepared. Larry Leong (not his real name) and his family operate optometrist outlets in the Klang Valley. They have been in business for over three decades. He emphasised the importance of having good cash flow at all times.

“We have gone through at least four cycles of tough times. I’ve learnt that the best way to prepare for any slowdown in business activities is to have good cash flow. That means prudence in buying products and ensuring that repayments are manageable,” he says.

Another segment of the economy that are vulnerable to the MCO are those in the gig economy. According to World Bank Data, 25.3% of the Malaysian workforce, or about four million people, were freelancers in 2018, and this number is expected to grow.

The nature of their work and irregular income puts them at greater risk in tough economic times.

Irene Lim (not her real name), a freelance ballet teacher and Pilates instructor, says she will depend on her savings, as she will have no income, with dance studios and gyms closed during the MCO.

If the order is extended, however, she would have to resort to drastic measures such as selling her car.

She says a reduction in tax rates this year would be really helpful to freelancers like her who are in the same predicament.

Lim has resorted to offering free online ballet classes to her students to maintain her relationship with them.

SME Association’s Kang is concerned that the MCO may be extended, similar to what Italy is facing.

“In fact, I foresee we could be in a worse situation than that because people don’t seem to understand how serious this is.

“This year has so far been worse than last year in terms of business. Now, we will need to see how well Malaysia controls this pandemic and, if we manage to do it, the second quarter should be better,” he says.

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New Report Shows U.S. Gig Workers Hit Hard by COVID-19 with Nearly 3 out of 5 Now Earning Less than $1,000 per Month | 2020-10-22 | Press Releases




REDWOOD CITY, Calif. , Oct. 22, 2020 /PRNewswire/ — Flourish , a global venture capital firm focused on early-stage fintech investments that enhance financial health, today unveiled The Digital Hustle: Gig Worker Financial Lives Under Pressure , United States Spotlight . The report is based on surveys of 700 gig workers across five cities: Atlanta , Chicago , New York , Philadelphia , and San Francisco.

On October 22, 2020, Flourish Ventures unveiled "The Digital Hustle: Gig Worker Financial Lives Under Pressure, United States Spotlight." The report is based on surveys of 700 gig workers across five cities: Atlanta, Chicago, New York, Philadelphia, and San Francisco.

The United States Spotlight is fifth in a series of Flourish’s year-long global study of more than 3,000 gig workers from Brazil , India , Indonesia , South Africa and the U.S., all countries with some of the largest and fastest-growing gig economies. In August 2020 , Flourish partnered with digital worker platform company Steady to better understand how U.S. gig workers’ financial lives were impacted and their hopes and concerns for the future.

Gig workers in the U.S., employed in service roles, such as e-hailing and delivery, were hit hard by the COVID-19 pandemic, with 68% reporting a decline in total income. Nearly 3 out of 5 workers earned less than $1,000 per month, compared to 1 in 5 before the lockdown. A majority of U.S. respondents – 89% – were concerned about COVID-19, and at the time of the survey, respondents were most worried about the impact to their livelihoods, although health risks were also a meaningful concern.

“With the onset of COVID-19 and the accompanying economic fallout, our research found that the majority of workers in the digital gig economy are living on the edge, piecing together temporary and inconsistent work and struggling to make ends meet,” explained Emmalyn Shaw , managing partner at Flourish. “The pandemic and ensuing economic dislocation significantly impacted this population and highlighted their limited financial resilience.”

Steady CEO Adam Roseman said, “As COVID-19 continues to redefine nearly every aspect of daily life, earning a stable income is much harder to achieve for tens of millions of hourly and gig workers. Consistent and coordinated government and private-sector support will be needed.”

Black and Latinx Communities Disproportionately Impacted

Fifty-nine percent of respondents reported that if they lost their main source of income, they could not cover household expenses for a month without borrowing money. Black and Latinx communities were disproportionately impacted by the crisis, evidenced by respondents’ high levels of concern and the heavier burden of supporting additional financial dependents. Black workers were hit the hardest financially, with 61% now earning less than $1,000 per month.

Worker Sentiment and Financial Impact Vary by City

The United States Spotlight reveals that worker sentiment and financial impact varied meaningfully by city, depending on the regional course of the pandemic . In Atlanta , Chicago , and Philadelphia , more than half of the workers reported a large fall in income, while San Francisco workers, who also reported a large income decline, indicated a somewhat more positive outlook. In New York , workers reported less economic hardship and lower levels of concern.

Yet, U.S. gig workers showed signs of grit and resilience as they coped with the economic impact of the crisis:

  • 63% used savings and 55% borrowed money, combining loans from multiple sources, with a heavy reliance on friends and family.
  • 39% found new or additional work, with over a third of new work coming from online or app-based platforms.
  • Of the 62% who reduced consumption, half cut back on food.

Some Relief with Financial Aid

In the U.S., government relief payments through the CARES Act were a lifeline for many.

  • 77% of respondents received financial aid through the CARES Act, and while still struggling, these recipients had stronger financial resilience, less decline in quality of life, and a greater sense of hope.
  • More than half of respondents applied for unemployment benefits since the crisis began, although most struggled to navigate the application process. For most, finding work with better pay is their top financial goal.

To read the full United States Spotlight report, visit:

“The important role that gig workers play in our society cannot be overemphasized,” said Shaw. “As the world continues to grapple with the challenges of the current crisis, financial institutions, fintechs, and policymakers have an opportunity to learn from our most vulnerable workers and identify financial services that will help them survive this crisis and thrive in the future.”

About Flourish

Flourish is a global venture capital firm investing in entrepreneurs whose innovations advance financial health and prosperity for individuals and small businesses. Our global fintech portfolio includes more than 60 high-growth companies offering a range of leading-edge financial services including, in the U.S., challenger bank Chime, gig worker platform Steady, next-gen home insurance company Kin, and FreshEBT, an app for SNAP recipients, among many others. We partner with industry thought leaders in research, policy, and regulation to better understand the underserved and help foster a fair and more inclusive economy. Visit us at or join our community through Twitter , LinkedIn or Facebook .

Cision View original content to download multimedia:

SOURCE Flourish Ventures

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Gig Economy And Sharing Economy Market 2020 | COVID -19 Impact Research Report With Top Key Players




The Global Gig Economy And Sharing Economy Market report mainly studies the size, recent trends and development status of the Gig Economy And Sharing Economy market, as well as investment opportunities, government policy, market dynamics (drivers, restraints, opportunities), supply chain and competitive landscape. Technological innovation and advancement will further optimize the performance of the product, making it more widely used in downstream applications. Moreover, Porter’s Five Forces Analysis (potential entrants, suppliers, substitutes, buyers, industry competitors) provides crucial information for knowing the Gig Economy And Sharing Economy market. The Gig Economy And Sharing Economy research report study the market size, Gig Economy And Sharing Economy industry share, key drivers for growth, major segments, and CAGR. Then it analyzed the world’s main region market conditions, including the product price, profit, capacity, production, supply, demand and market growth rate and forecast etc.

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Key players in the global Gig Economy and Sharing Economy market are:
Door Dash
Task Rabbit

On the basis of types, the Gig Economy and Sharing Economy market from 2015 to 2026 is primarily split into:
Gig Economy
Sharing Economy

On the basis of applications, the Gig Economy and Sharing Economy market from 2015 to 2026 covers:
Shared private car
Shared private residence
Independent contractor

The report further covers the significant performance of robust Gig Economy And Sharing Economy companies including their research activities, Product innovations, developments, technology adoptions, and brand promotions. The activities are performed in order to captivate the maximum numbers of potential buyers and offer better fit products in the market. Their strategic acquisitions, mergers, ventures, and partnerships are also examined in the report to help clients build their own strategies for their Gig Economy And Sharing Economy businesses.

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Gig Economy And Sharing Economy Market: Regional analysis includes:

  • Asia-Pacific (Vietnam, China, Malaysia, Japan, Philippines, Korea, Thailand, India, Indonesia, and Australia)
  • Europe (Turkey, Germany, Russia UK, Italy, France, etc.)
  • North America (the United States, Mexico, and Canada.)
  • South America (Brazil etc.)
  • The Middle East and Africa (GCC Countries and Egypt.)

Major Points Covered in TOC:

  • Overview: Along with a broad overview of the global Gig Economy And Sharing Economy Market, this section gives an overview of the report to give an idea about the nature and contents of the research study.
  • Analysis on Strategies of Leading Players: Market players can use this analysis to gain competitive advantage over their competitors in the Gig Economy And Sharing Economy Market.
  • Study on Key Market Trends: This section of the report offers deeper analysis of latest and future trends of the market.
  • Market Forecasts: Buyers of the report will have access to accurate and validated estimates of the total market size in terms of value and volume. The report also provides consumption, production, sales, and other forecasts for the Gig Economy And Sharing Economy Market.
  • Regional Growth Analysis: All major regions and countries have been covered Gig Economy And Sharing Economy Market report. The regional analysis will help market players to tap into unexplored regional markets, prepare specific strategies for target regions, and compare the growth of all regional markets.
  • Segment Analysis: The report provides accurate and reliable forecasts of the market share of important segments of the Gig Economy And Sharing Economy Market. Market participants can use this analysis to make strategic investments in key growth pockets of the Gig Economy And Sharing Economy Market.

Key Questions Answered in the Report Include:

  • What will the market size and the growth rate be in 2025?
  • What are the key factors driving the global Gig Economy And Sharing Economy Market?
  • What are the key market trends impacting the growth of the global Gig Economy And Sharing Economy Market?
  • What are the challenges to market growth?
  • Who are the key vendors in the global Gig Economy And Sharing Economy Market?
  • What are the market opportunities and threats faced by the vendors in the global Gig Economy And Sharing Economy Market?
  • Trending factors influencing the market shares of the Americas, APAC, Europe, and MEA.
  • What are the key outcomes of the five forces analysis of the global Gig Economy And Sharing Economy Market?

A free report data (as a form of Excel Datasheet) will also be provided upon request along with a new purchase.

Contact Us:
E-mail:[email protected]
Ph: US – +13393375221, IN – +919881074592

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Note: In order to provide more accurate market forecast, all our reports will be updated before delivery by considering the impact of COVID-19.

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On the job but unprotected — why European welfare is failing gig workers – POLITICO




This article is part of a special report, The Essential Tech Worker.

When gig economy platforms arrived in Europe a decade ago, observers predicted that they would either blow up the welfare state — or get smothered by it.

In many ways, both prophecies have come to pass.

For thousands of Uber drivers, delivery riders, babysitters and other denizens of the “gig economy,” what was originally meant to be a side hustle has turned into a de facto job representing their sole source of income — ushering in a new generation of workers whose jobs are far more precarious than those of their peers in traditional employment. Meanwhile, European countries that uphold their welfare systems with pride are still struggling to figure out how to bring this new type of worker into the fold.

One reason they’re having a hard time is that current labor laws are premised on a binary either-or definition: A worker is either an employee, or they are not.

Regulators are stuck in a bind. Attempts to protect workers who appear to be self-employed but in reality depend on a single company for their livelihood have fallen flat or run into legal obstacles. In London, for example, Uber has been stuck in a tortuous legal process since 2015 trying to overturn a court decision that ruled drivers should be classified as workers instead of self-employed people.

The companies themselves have proposed a compromise, a “third way,” that would grant workers some social protections but maintain their independent status.

So far, their attempts have ended in failure. France flirted with a voluntary charter for gig workers that would maintain their independent status but provide some social rights. That initiative was quickly struck down by the country’s Constitutional Council as “unconstitutional,” because it gave platforms the power to fix rules that legislators should have.

Last September in Italy, food-delivery companies unveiled a collective agreement with a far-right union that would establish workers as independent contractors. The agreement caused outcry among workers, unions and the country’s labor ministry, who deemed it invalid and against Italian labor law.

Collective agreements are also tricky — the first one between a union and Danish domestic work platform Hilfr was struck down by Danish competition authorities.

California — the birthplace of the gig economy — has tried to atone for its creation with a new bill, dubbed AB5, that forced companies such as Uber and Lyft to reclassify their drivers as employees. The ride-hailing companies are embroiled in an expensive lobbying battle against the law.

One European court after another has looked at the evidence and reached the same conclusion: Any pretense that workers are independent is “fictitious,” in the words of France’s highest court in a ruling regarding Uber drivers.

A U.K. Supreme Court decision on the same issue is imminent. Courts in Spain and Italy have reached similar rulings with respect to other gig work platforms. One of the main arguments courts have highlighted is the level of algorithmic control platforms have over workers. The algorithm decides when and how workers work, and how much their work is worth.

Platforms say workers want their autonomy and flexibility, which is incompatible with employee status. That status could also be the end of their business. Uber, for example, has never made a profit, and likely never will if it has to pay its drivers and couriers social benefits. The outcome of California’s AB5 fight will show how resilient the platforms’ business models truly are.

The European Commission has pledged to improve the working conditions of gig workers. So far the Commission’s only suggestion has been to tweak competition rules to allow for bargaining rights for gig workers.

The seeming incompatibility between traditional employee protections and platform-based business models has opened room for proposals that could blow up the way we think about the relationship between workers and the companies that sign their paychecks.

Two leading legal scholars on labor law, Nicola Countouris, of University College London, and Valerio De Stefano, of KU Leuven, have suggested redefining the definition of workers and offering employment protections to anyone who works for a client or another person, and doesn’t hire other people or employ significant materials or capital.

This would catch Uber drivers and Deliveroo couriers, and also protect workers in other fields that are starting to normalize the use of algorithmic control, such as the care and retail sectors.

There are some early signs of movement in this direction. All eyes will be on Italy, which in 2019 passed a law giving couriers basic protections including sick leave and social security while still categorizing them as autonomous workers.

Even as the coronavirus rages on, the European welfare system still hasn’t figured out how to embrace gig workers. At stake is not just home delivery and on-demand rides, but the livelihoods of hundreds of thousands of ever-more essential workers.

This article is part of POLITICO’s premium Tech policy coverage: Pro Technology. Our expert journalism and suite of policy intelligence tools allow you to seamlessly search, track and understand the developments and stakeholders shaping EU Tech policy and driving decisions impacting your industry. Email [email protected] with the code ‘TECH’ for a complimentary trial.

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