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How Will the Pandemic Change Things?

The Bulwark has an interesting article on why they can’t “Reopen America” [1]. I wonder how many changes will be long term. According to the Wikipedia List of Epidemics [2] Covid-19 so far hasn’t had a high death toll when compared to other pandemics of the last 100 years. People’s reactions to this vary from doing nothing to significant isolation, the question is what changes in attitudes will be significant enough to change society.

Transport

One thing that has been happening recently is a transition in transport. It’s obvious that we need to reduce CO2 and while electric cars will address the transport part of the problem in the long term changing to electric public transport is the cheaper and faster way to do it in the short term. Before Covid-19 the peak hour public transport in my city was ridiculously overcrowded, having people unable to board trams due to overcrowding was really common. If the economy returns to it’s previous state then I predict less people on public transport, more traffic jams, and many more cars idling and polluting the atmosphere.

Can we have mass public transport that doesn’t give a significant disease risk? Maybe if we had significantly more trains and trams and better ventilation with more airflow designed to suck contaminated air out. But that would require significant engineering work to design new trams, trains, and buses as well as expense in refitting or replacing old ones.

Uber and similar companies have been taking over from taxi companies, one major feature of those companies is that the vehicles are not dedicated as taxis. Dedicated taxis could easily be designed to reduce the spread of disease, the famed Black Cab AKA Hackney Carriage [3] design in the UK has a separate compartment for passengers with little air flow to/from the driver compartment. It would be easy to design such taxis to have entirely separate airflow and if setup to only take EFTPOS and credit card payment could avoid all contact between the driver and passengers. I would prefer to have a Hackney Carriage design of vehicle instead of a regular taxi or Uber.

Autonomous cars have been shown to basically work. There are some concerns about safety issues as there are currently corner cases that car computers don’t handle as well as people, but of course there are also things computers do better than people. Having an autonomous taxi would be a benefit for anyone who wants to avoid other people. Maybe approval could be rushed through for autonomous cars that are limited to 40Km/h (the maximum collision speed at which a pedestrian is unlikely to die), in central city areas and inner suburbs you aren’t likely to drive much faster than that anyway.

Car share services have been becoming popular, for many people they are significantly cheaper than owning a car due to the costs of regular maintenance, insurance, and depreciation. As the full costs of car ownership aren’t obvious people may focus on the disease risk and keep buying cars.

Passenger jets are ridiculously cheap. But this relies on the airline companies being able to consistently fill the planes. If they were to add measures to reduce cross contamination between passengers which slightly reduces the capacity of planes then they need to increase ticket prices accordingly which then reduces demand. If passengers are just scared of flying in close proximity and they can’t fill planes then they will have to increase prices which again reduces demand and could lead to a death spiral. If in the long term there aren’t enough passengers to sustain the current number of planes in service then airline companies will have significant financial problems, planes are expensive assets that are expected to last for a long time, if they can’t use them all and can’t sell them then airline companies will go bankrupt.

It’s not reasonable to expect that the same number of people will be travelling internationally for years (if ever). Due to relying on economies of scale to provide low prices I don’t think it’s possible to keep prices the same no matter what they do. A new economic balance of flights costing 2-3 times more than we are used to while having significantly less passengers seems likely. Governments need to spend significant amounts of money to improve trains to take over from flights that are cancelled or too expensive.

Entertainment

The article on The Bulwark mentions Las Vegas as a city that will be hurt a lot by reductions in travel and crowds, the same thing will happen to tourist regions all around the world. Australia has a significant tourist industry that will be hurt a lot. But the mention of Las Vegas makes me wonder what will happen to the gambling in general. Will people avoid casinos and play poker with friends and relatives at home? It seems that small stakes poker games among friends will be much less socially damaging than casinos, will this be good for society?

The article also mentions cinemas which have been on the way out since the video rental stores all closed down. There’s lots of prime real estate used for cinemas and little potential for them to make enough money to cover the rent. Should we just assume that most uses of cinemas will be replaced by Netflix and other streaming services? What about teenage dates, will kissing in the back rows of cinemas be replaced by “Netflix and chill”? What will happen to all the prime real estate used by cinemas?

Professional sporting matches have been played for a TV-only audience during the pandemic. There’s no reason that they couldn’t make a return to live stadium audiences when there is a vaccine for the disease or the disease has been extinguished by social distancing. But I wonder if some fans will start to appreciate the merits of small groups watching large TVs and not want to go back to stadiums, can this change the typical behaviour of groups?

Restaurants and cafes are going to do really badly. I previously wrote about my experience running an Internet Cafe and why reopening businesses soon is a bad idea [4]. The question is how long this will go for and whether social norms about personal space will change things. If in the long term people expect 25% more space in a cafe or restaurant that’s enough to make a significant impact on profitability for many small businesses.

When I was young the standard thing was for people to have dinner at friends homes. Meeting friends for dinner at a restaurant was uncommon. Recently it seemed to be the most common practice for people to meet friends at a restaurant. There are real benefits to meeting at a restaurant in terms of effort and location. Maybe meeting friends at their home for a delivered dinner will become a common compromise, avoiding the effort of cooking while avoiding the extra expense and disease risk of eating out. Food delivery services will do well in the long term, it’s one of the few industry segments which might do better after the pandemic than before.

Work

Many companies are discovering the benefits of teleworking, getting it going effectively has required investing in faster Internet connections and hardware for employees. When we have a vaccine the equipment needed for teleworking will still be there and we will have a discussion about whether it should be used on a more routine basis. When employees spend more than 2 hours per day travelling to and from work (which is very common for people who work in major cities) that will obviously limit the amount of time per day that they can spend working. For the more enthusiastic permanent employees there seems to be a benefit to the employer to allow working from home. It’s obvious that some portion of the companies that were forced to try teleworking will find it effective enough to continue in some degree.

One company that I work for has quit their coworking space in part because they were concerned that the coworking company might go bankrupt due to the pandemic. They seem to have become a 100% work from home company for the office part of the work (only on site installation and stock management is done at corporate locations). Companies running coworking spaces and other shared offices will suffer first as their clients have short term leases. But all companies renting out office space in major cities will suffer due to teleworking. I wonder how this will affect the companies providing services to the office workers, the cafes and restaurants etc. Will there end up being so much unused space in central city areas that it’s not worth converting the city cinemas into useful space?

There’s been a lot of news about Zoom and similar technologies. Lots of other companies are trying to get into that business. One thing that isn’t getting much notice is remote access technologies for desktop support. If the IT people can’t visit your desk because you are working from home then they need to be able to remotely access it to fix things. When people make working from home a large part of their work time the issue of who owns peripherals and how they are tracked will get interesting. In a previous blog post I suggested that keyboards and mice not be treated as assets [5]. But what about monitors, 4G/Wifi access points, etc?

Some people have suggested that there will be business sectors benefiting from the pandemic, such as telecoms and e-commerce. If you have a bunch of people forced to stay home who aren’t broke (IE a large portion of the middle class in Australia) they will probably order delivery of stuff for entertainment. But in the long term e-commerce seems unlikely to change much, people will spend less due to economic uncertainty so while they may shift some purchasing to e-commerce apart from home delivery of groceries e-commerce probably won’t go up overall. Generally telecoms won’t gain anything from teleworking, the Internet access you need for good Netflix viewing is generally greater than that needed for good video-conferencing.

Money

I previously wrote about a Basic Income for Australia [6]. One of the most cited reasons for a Basic Income is to deal with robots replacing people. Now we are at the start of what could be a long term economic contraction caused by the pandemic which could reduce the scale of the economy by a similar degree while also improving the economic case for a robotic workforce. We should implement a Universal Basic Income now.

I previously wrote about the make-work jobs and how we could optimise society to achieve the worthwhile things with less work [7]. My ideas about optimising public transport and using more car share services may not work so well after the pandemic, but the rest should work well.

Business

There are a number of big companies that are not aiming for profitability in the short term. WeWork and Uber are well documented examples. Some of those companies will hopefully go bankrupt and make room for more responsible companies.

The co-working thing was always a precarious business. The companies renting out office space usually did so on a monthly basis as flexibility was one of their selling points, but they presumably rented buildings on an annual basis. As the profit margins weren’t particularly high having to pay rent on mostly empty buildings for a few months will hurt them badly. The long term trend in co-working spaces might be some sort of collaborative arrangement between the people who run them and the landlords similar to the way some of the hotel chains have profit sharing agreements with land owners to avoid both the capital outlay for buying land and the risk involved in renting. Also city hotels are very well equipped to run office space, they have the staff and the procedures for running such a business, most hotels also make significant profits from conventions and conferences.

The way the economy has been working in first world countries has been about being as competitive as possible. Just in time delivery to avoid using storage space and machines to package things in exactly the way that customers need and no more machines than needed for regular capacity. This means that there’s no spare capacity when things go wrong. A few years ago a company making bolts for the car industry went bankrupt because the car companies forced the prices down, then car manufacture stopped due to lack of bolts – this could have been a wake up call but was ignored. Now we have had problems with toilet paper shortages due to it being packaged in wholesale quantities for offices and schools not retail quantities for home use. Food was destroyed because it was created for restaurant packaging and couldn’t be packaged for home use in a reasonable amount of time.

Farmer’s markets alleviate some of the problems with packaging food etc. But they aren’t a good option when there’s a pandemic as disease risk makes them less appealing to customers and therefore less profitable for vendors.

Religion

Many religious groups have supported social distancing. Could this be the start of more decentralised religion? Maybe have people read the holy book of their religion and pray at home instead of being programmed at church? We can always hope.

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