Self imposed quarantine has given me lot of free time that otherwise I would have spent outdoors walking or with friends or exploring! But for many of these activities I am heavily dependent on things which are part of something we call “Sharing economy”. With the advent of cheap data plans and smartphones for masses specially in Asia we have seen these apps which can get you everything from ride-sharing, car pooling to a B&B room even in remote places.
Most of these companies were doing very well in terms of investor funding and many of them were planning to go public to generate even more funds. But it ultimately comes down to the fact what problems you solve and how solid are the foundations of your business. With covid-19 we are already seeing rides dropping to 50 % in most major cities and companies like Uber and Lyft will definitely feel lot of pain. Also if people can not trust and feel safe using a service, companies whose model revolve around sharing can not get customers to use their products even when the pandemic has subsided! Other businesses like airlines will also see temporary pain but they will get bailouts from governments which probably none of these sharing companies will get. People will have to fly no matter what but people can stop using Bird scooters.( Which might not be a bad thing)
I think this is the time for all the shared economy business to pivot and restructure themselves fundamentally. For example the Indian unicorn of Oyo rooms had to fire lot of their staff in China just to stay in business but can they have handled this in a better way?! I think it might have been possible if they haven’t stretched themselves too thin and opened Oyo rooms in far of places like Inner Mongolia province of China. During this time if they could have pivoted and said we can give country wide rooms for quarantine , they would probably enjoy huge respect and trust with the populace. Also that would give them a stream of income from quarantined patients.
Other thing that I have seen is that these companies have failed to make any innovations during these tough times. I think an indicator for a great company is that, in tough times they actually show their true character and innovate to solve the issues. For example none of the scooter sharing or bike sharing company have came out with materials of handles which can sanitize themselves , for god sake put a UV light ! I think when things will normalize many of these companies might find it an uphill battle to survive and gain customer’s trust. Only fittest will survive this storm.