Business

The Coronavirus Economic system: The startup founder in India striving to make stronger mass transit

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On any normal day, the teeming masses of India would be packed into buses heading to work and back. It is, after all, the cheapest and chosen method for 48% of all commutes in a country with more than 1.2 billion people.

But those buses aren’t on the roads anymore. The country announced a lockdown on March 24, and it changed everything for the founders and teams of India’s largest public transport management firm, Chalo.

Pre-pandemic, the tech pioneers were in a sweet spot in India’s estimated $83 billion daily commute market. Backed by investors like Xiaomi, Waterbridge, Raine, Venture Highway, and Smart Start, cofounder and chief marketing officer Dhruv Chopra, and his three cofounders, had first-mover advantage.

Chopra, on a normal day, would be flying cross-country or glued to his phone, coordinating with teams across 23 cities where the company operates live tracking of more than 10,000 buses, racking up more than 300 million live-tracked bus trips each month. Chalo would be buzzing with tech and operational teams working to grow their ticketing offerings on the Chalo card and app, while liaising with state and private bus owners to operate 2,000 buses in 14 cities to ferry 1.5 million passengers a day.

Dhruv Chopra, cofounder of Chalo, live-tracks more than 10,000 buses in 23 cities.
Courtesy of Chalo

But the sudden lockdown announcement by the Indian government upended the business—and the lives of Chalo’s young team members and its founders—forcing a pivot to automation that should have been a few years away.

Fortune spoke with Chopra for a new series, The Coronavirus Economy, to ask about how he expects COVID-19 will impact his company and staff and India’s transport market, as well as how the lockdown has affected him personally. The following Q&A has been condensed and lightly edited for clarity.

Fortune: What was Chalo’s focus, before the pandemic hit?

Chopra: We use technology to make mass public transport easier for people in India. Buses are the single largest mode of transport in India, and our bus systems across cities are unreliable and sometimes even completely broken.

As a company specifically focused on buses, through our app we offer people services, where [users] can track their bus live and see how many minutes away it is from the bus stop. We also offer payment and ticketing services on the app or a Chalo card, which essentially works like a travel card. Before the pandemic and lockdown, having expanded quite rapidly over the past two years we were in the middle of raising our Series C funding. That round was at a very advanced stage, but when the lockdown came into place, everything stopped in its tracks.

How prepared were you for the control measures and lockdown, and how is the company managing so far, considering you were in the middle of a round of funding?

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The entire country was put into lockdown on four hours’ notice. That kind of timeline could not have been anticipated by anyone, even if, in hindsight, there were small signs leading up to it. To be suddenly told at 8 p.m. in the evening that at midnight on the 25th of March everything would come to a halt, no one could have prepared for it. The company’s operations have ceased completely. We run buses, and there are no buses running anywhere. While that is best for the country and for the health of its people, it does mean that the teams operating those buses currently don’t have jobs or tasks to do.

So we’ve had to go through a combination of furloughing, and in some cases, letting go of people. This has also unfortunately necessitated a fast-tracking of the automation, which we had been working on.

How is this automation likely to impact young workers, after this crisis?

A lot of the work we do when we operate buses on the ground is human-driven today. Automation was always in the cards. But in our case, given the service we offer and the country we are in, it was further down on the road map for us. Now that we have had a massive service interruption in the last few weeks, which doesn’t feel like it’s coming back to normal anytime soon, we are using the opportunity to accelerate our automation in certain areas. That will, of course, have a reverberating effect on young people, who make up a bulk of our population in the job market.

Automation will result in a natural redundancy of roles for people who are working in specific areas, for example, bus dispatches, everyday cash collections, simple tasks like reconciliation of payments. These are all areas that can be automated. These roles will not come back once the lockdown lifts or as soon as the automation is completed.

So for the young people of this country, there is an element of reskilling that is now necessary to move them into roles of other types. I don’t personally believe in a world where automation completely kills jobs. Anything that we have killed in the last few years has also led to sufficient job creation in other areas, and it is now a question of reskilling a lot of people in a country with a large youth population and getting them to contribute in other ways.

How has the company been managing the impact on its staff?

Pre-crisis, we were at around 1,350 people across our two groups of staff, split into central and city teams. Within the central team, almost everyone’s roles are intact. Their primary functions are technology, and in addition, we have smaller support teams for marketing and HR that comprise just one or two people.  The tech teams are the ones that are doubling down on the automation now for us. Where the impact has been felt is in the the city teams, where we have had to furlough some people and unfortunately lay off others.

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I estimate once the lockdown is over, we will revert to 50% to 70% of pre-lockdown employee levels. But it really will depend on the Indian government’s plan for exiting the lockdown. If they choose a phased restoration of normalcy then there might be a need to only run 10%, 20%, or 30% of bus services initially. We would scale up and bring back people from furlough or any other status they would be on, dependent on that.

As founders, we have been very honest and transparent with our teams about the situation the company finds itself in. We have been frank about the fact that normalcy will probably not return for a few months or maybe even a few quarters. We discussed solutions with our teams, and after these discussions all agreed to pay cuts of up to 30% in a graded fashion depending on what staff are earning and how much they can actually contribute to these pay cuts. There has been a 100% pay cut for all senior management, and for us, the four cofounders, it’s a 100% pay cut for as long as it takes.

Given how key mass transit is for India, what do you think is going to change for the sector and for the country when this is over?

I’m not sure it is going to be the same ever again. There are two big challenges that we have determined in India. One is the massive transmission risk based on how crowded our buses are, and that 95% of our ticketing is done in cash exchanging hands with conductors. Our bus conductors are physically exposed on a daily basis to 500 to 800 people, depending on the area they are operating in. The second challenge, common to public transport across the world is that ticketing is anonymous.

As a passenger on a plane, you feel safer since you can trace pretty much anyone who could’ve been exposed to a suspected infection. You can then contain and quarantine them. On a bus or train, you simply can’t. We are trying to work with the government to figure out how to address both these challenges. This is going to be important not just to help provide a safer transport option for people, but it’s also going to be important to help rebuild faith in people to enable them to use these transport services again.

Chalo’s app enables users to track their bus live and see how many minutes away it is from their stop.
Courtesy of Chalo

The pandemic is changing behaviors, not just of companies, but of people. How has it impacted you personally, and how are you coping?

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I seem to be coping with this strange new normal by working my ass off. Double time. There was a time initially in early March when I thought I had COVID-19, which used to be called the coronavirus in those days. I’d returned from a series of international and domestic trips and fell ill with flu-like symptoms. Without knowing too much about the virus, I went to the doctor and also took the precaution to self-isolate. We weren’t being offered tests back then, and I don’t know whether I had it or not. But getting sick made me more aware.

As a company, we took a call to get as many of our team as we could to work from home, more than a week before the official lockdown of the country. This virus has also changed how we as a team relate to each other. It’s really got us to think about each other on a personal level. We have a daily team huddle across the company. Our new reality is the 11 a.m. huddle every morning now kicks off with every single person on that call telling us whether everyone they know, in their teams and their families, are healthy and all right. These are really important words for us to hear every day.

Do you think Chalo will be able to survive the lockdown?

Absolutely, I have no doubt about it. Once the lockdown is over, and services start getting restored, we are going to be one of the first sectors and company that can speed its way back to as normal as the situation is going to be.

We offer a fundamental service. There is no city which can function without public transportation, and there is no economic engine without it. As people come back and return to jobs at whatever time scale that is, they are going to need public transport for the rest of their lives.

More coronavirus coverage from Fortune:

—This famed economist doesn’t think we’re headed for another Great Recession
—South Korea has the most comprehensive coronavirus data. What it’s taught us so far
—10 questions about the 2020 election during the coronavirus pandemic, answered
6 steps to sustainably flatten the coronavirus curve
—How hackers are exploiting the coronavirus—and how to protect yourself
—Hong Kong launches a surveillance operation to track suspected coronavirus patients
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: The race is on to create a coronavirus antiviral drug and vaccine

Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus and its impact on global business.

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