Covid Gains: New Opportunities For Home Schooling, Asset-Light Business Models, Formalised Gigs
The key to opportunities lies with government. If it can create enabling legislation without stifling innovation in business models, Covid-19 would be as much a boon as bane.
As our fight against Covid-19 is set to hit new peaks, one should not also forget what a learning opportunity it has been for the country. Things that we never learned for decades are now being telescoped into a few months as we battle the pandemic.
The first, and most obvious, learning is our gross under-investment in public healthcare and public transport. To benefit from this realisation, clearly the spike in healthcare costs this year should not be treated as a one-off incident after which we can go back to normal levels of under-investment. That would be a tragedy. 2020-21 should be seen as the year from which we consistently raise public investment in healthcare as a share of gross domestic product (GDP).
The next, and less obvious gain, is political. For almost the first time since Independence we are actually letting states do all the fighting against Covid-19. After initially centralising the effort, from May onwards states have been leading the fight against the disease, with the Centre only providing protocols and dos and don’ts.
States have, for the first time, stepped up to the fight both on the healthcare front, and the economic front. They have learnt that economic reform is not something that only Delhi has to do; if they don’t do reform, they will lose out on revenues.
Many states have used the pandemic to not only experiment with healthcare solutions (private partnerships for Covid-care, for example) but also started reforming agriculture, labour and land laws.
The lesson for Delhi – code for Union government – is simple: get off the backs of states, and devolve more economic power to them. The states have to learn the same thing. Covid-19 is currently an urban pandemic, and the reason why municipal corporations have been found wanting is that the states too have not empowered their mayors and councillors to take on real responsibilities.
So, the Centre needs to free states to do their own thing, and the states must enable their cities, zilla parishads and village panchayats to do theirs.
A third gain is in digitisation and formalisation. Covid-19 is enabling a faster shift to digitisation of finance, a process begun with demonetisation and the introduction of the goods and services tax (GST). Another theme of the Narendra Modi government, formalisation, initially encouraged with sops and amnesties for non-compliance with provident fund laws, is likely to now spread to new places.
Over the last two decades, home and workplace security services shifted from individuals and firms to giant (in terms of number employed, but not necessarily turnover) security services companies. During Covid-19, this is one service sector that has not lost traction. But lots of domestic workers and personal drivers lost their jobs their incomes, and work-from-home and safe distancing gathered steam.
The future for both domestic work and driver services will have to be substantially formalised. This will drive wages and productivity up.
A small example: at my home in Thane, car cleaning services cost in the range of Rs 300-400 per month, for seven days of cleaning. But in the more formal sector of car cleaning services in Bengaluru’s gated communities, the rates are Rs 400 (sometime more, depending on the size of the car) for cleaning three days a week. Put simply, wage rates have doubled with formalisation.
When it comes to domestic services, currently households are either managing it themselves or buying white and brown goods (washing machines, dryers, dish-washers). When formalised, domestic services should again boom, with higher wages and more guaranteed levels of service and safety nets. Sensible legislation could help here.
Home schooling is another opportunity post-Covid. Already, with schools closed, parents are in supervisory mode with their children learning on from online classes. But while schools will, no doubt, reopen some time once the infection threat is past its peak, one should be able to rethink home-schooling, not just in gated communities, but even in slums.
The watchword should be “group home schooling”, where the advantage is that children get both the opportunity to socialise even while giving parents with an interest in children to have better control of what their kids are learning. Already, we have a large stock of educated home-makers earning nothing. All it would need for group home-schooling to take off is to encourage – by providing a proper legal framework for it – large and reputed public schools (Kendriya Vidyalayas, Delhi Public School, Arya Vidya Mandirs, etc) to franchise home schooling by sharing, either offline or online, their entire classroom and project materials for a small franchise fee.
This can be done as much in residential colonies as in slums. Classrooms and labs, playgrounds and exam evaluation and student record-keeping services, can be shared with those who cannot set up these facilities at homes.
Asset light models for businesses are another opportunity. We are currently too stuck on the ownership model of growth, as a result of which assets are grossly underutilised. Whether it is spectrum, or hotels, or private cars, they are all underutilised assets.
In telecom, for example, there is no reason why spectrum cannot be freely leased or traded in order to encourage private virtual mobile operators in geographical or business niches. Vodafone may yet survive if it is not a broad spectrum provider of services, but restricted to some high-value homes and offices.
There is also no reason why hotel companies need to own their properties, when they can lease them or even rent them out to users by the hour. Currently, you book an entire room when you may be using the hotel only to sleep at night. Airbnb has made a business out of this utilising private spare capacities, but more focused models beyond using private homeowners’ underutilised properties need to emerge. Hotels cannot survive, except at the top end, by making the whole day as the basis of room charges.
Ditto for taxi-hailing services. The ultimate logic of ride-hailing is that even private cars and two-wheelers should be available for public use for a fee. Currently, the relationship between the ride-hailing app owners and taxi drivers is skewed in favour of the former. But once private cars can be Uber- or Ola-ised, not only will more such services be available, but jobs of drivers will also proliferate, as private car owners employ drivers for, say, half the normal pay, while allowing them to earn more by using the car as a public vehicle for hire at other times, including holidays.
If this had been allowed before Covid-19, most drivers would not only be earning at least a basic wage from their car owners, they would also be free of EMI worries since the owners would be paying them.
The key to all these opportunities lies with government. If they can create enabling legislation without stifling innovation in business models, Covid-19 would be as much a boon as bane.
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