The covid pandemic has changed the world as we know it in many aspects. When the virus hit, companies encouraged their employees to leave their traditional office setting and work from home to curb the spread of the virus. Before the covid outbreak, the number of Americans working from home for more than three days a week stood at 5%. However, owing to the pandemic, it was estimated that by April 2020, 37% of American workers were working remotely.
Internet-based businesses like e-commerce platforms and casino online sites experienced rapid growth because of their convenience in the pandemic-stricken world. However, on the other side of the coin, many non-essential businesses were closed for months, and lots of companies ended up suffering through hefty losses.
Thankfully, now that vaccinations are being rolled out across different parts of the globe, things are going back to normal. Even so, that doesn’t mean that the world is going back to its exact pre-pandemic state. Read on to understand how the pandemic has shaken up the office and adjacent economies.
The Remote Office is the Future of Work
In the case of remote working, companies and employees realized that it was possible to be professionally productive without the hassle of commuting. Though some employees have started going back to work, economists from Goldman Sachs have reported that office attendance is about one-third of the pre-Covid levels.
Some companies are now allowing their employees to either work from home full time or partially if they so choose. For example, Facebook announced that it would allow about half of its employees to work from home permanently. At the same time, Nationwide, the Ohio-based insurance giant adopted the hybrid in-office model by maintaining offices in its four corporate campuses and remote working in their other locations.
Office-adjacent Economies Are Taking a Beating
Almost two years into the pandemic, there is a delay in the full recovery of the office-adjacent businesses as people continue to work from home. Some of the hardest-hit businesses that depended on daily commuters are such as:
Public Transport Systems
The public transport system relies on having enough ridership on their trains and buses to cover operational costs. Due to the pandemic, the transport system has significantly been affected after the increased introduction of remote working. Data provided by the Metropolitan Transportation Authority (MTA) in New York indicates that the use of the subway is less than half of what it was before the pandemic. Consequently, New York’s transit budget was depleted, and the MTA was thrown into financial turmoil.
The MTA has received $8 billion in government funding through the CARES Act and a further $3 billion in short-term loans to keep the transport system running. Regrettably, this amount is insufficient, and MTA will require an extra $8 billion by 2024 to avoid service cuts, maintain steady fares or even payoffs. Nevertheless, a report released by the office of the New York State Comptroller early this year indicates that the fares and toll revenues are expected to recover to their pre-pandemic levels by 2023.
Restaurants and Cafes
The morning routine for most workers is grabbing a cup of coffee on their way to work. However, with the introduction of remote work, the number of people stopping for some coffee or grabbing a bite has drastically reduced, meaning sales have gone down.
For example, in Starbucks’ Q2 2021 sales report, the average in-store transactions were at about 90% of the pre-covid levels. Likewise, McDonald’s breakfast sales have slumped, whereas Dunkin’ Donuts saw a 15% dip in sales during the week ending May 23, 2021.
While some of these large establishments have managed to stay afloat during the low season, smaller coffee shops and food joints ran out of luck and ended up closing indefinitely.
Dry Cleaning Services
With remote work, dry cleaners are hardly cleaning nowadays because many people have changed how they dress. Before Covid-19, the number of dry cleaners in the US was over 32,000, racking in revenue of about $9.2 billion annually. But now, 30 to 40% of the dry cleaners have closed shop or are operating fewer machines. Now that more people are working at home, there are fewer suits, shirts, office work attire, and dresses to clean.
For a lot of dry-cleaning businesses, there is little to no hope for recovery to pre-pandemic levels because some people will continue working at home. As a result, many of the said businesses have cut office hours to reduce expenses and stay afloat.
Time for Office-adjacent Economies to Adapt
Given that remote work and hybrid in-office models are here to stay, office-adjacent economies must get creative and find new ways of keeping their business alive. Most food businesses, for instance, have ventured into deliveries or takeout, which has become popular because many people are working at home.
Without adapting to the inevitable change, the future is not optimistic for many office-adjacent businesses. Companies like Google and Apple have further pushed back the dates of returning to work, and from the look of things, more will follow suit.