Webinar :Join us on Jan 21, 22 and 23, 2021 at the ANYBODY CAN TRADE 360° LIVE virtual event. Register Now!
you are here: HomeNewsBusiness

With IT firms taking the WFH route, interstate bus operators find themselves in a jam

Buses haven’t moved since the lockdown and business has come to a standstill. The industry is staring at a loss of Rs 2,000 crore.

August 26, 2020 / 04:36 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Friday evenings in Koyembedu bus terminus, Chennai, would be a cacophony of sounds, of people shouting and horns blaring. People would throng the terminus in the hundreds, scrambling to find the right bus among the dozens lined up.

Anbalagan Alagappan, General Secretary, Omni Bus Owners Association, Koyembedu, estimates that close to 20,000 people leave Chennai each day from Friday to Sunday and double that number each day during the holiday and festival seasons.

There were 550 buses running every day on weekends, 375 every weekday and 700 on every festival day, all just from Chennai.

It was good business, earning operators Rs 1.2 lakh per bus in a month. “This was before Covid-19,” he stressed. He is not sure of seeing such a sight in the near future.

Business at a standstill

Close

Since April, in the wake of the pandemic, the buses have hardly moved and business has come to a standstill. The industry, Alagappan said, is staring at a loss of Rs 2,000 crore.

With IT sector employees working from home, interstate bus owners like Alagappan are unsure if business will ever be the same again.

Because, as Tharai K Thirugnanam, Treasurer, Tamil Nadu Omni Bus owners association, explained, techies account for about 50-60 percent of their consumer base, with the hottest route being Chennai-Bengaluru, followed by Chennai to Coimbatore, Trichy and Madurai.

This number could be as high as 70-75 percent for Karnataka’s bus operators. Dilraj Alva, President, Dakshina Kannada Bus Operators’ Association, said that 70-75 percent the interstate bus operators in the region were dependent on techies and students travelling to and from India’s Silicon Valley for work and study.

Changes for the worse

Chennai and Bengaluru account for a significant portion of IT employees in the country and were a key growth driver for interstate bus operators in the region.

For instance, of the 50 lakh people the IT/ITeS sector employs, Bengaluru alone accounts for about 15 lakh, as per 2017 estimates. Vinod AJ, General Secretary, All India Forum for IT Employees, an IT union, said Tamil Nadu has about 15 lakh IT/ITeS workers.

With companies looking at making WFH permanent, bus operators and the people they employ will be adversely affected.

TCS, for instance, has said that it would only have 25 percent of its workforce working from an office by 2025. Some startups in Bengaluru are giving up their co-working spaces, indicating that even after the pandemic the current model of WFH would continue.

In a recent conversation with Moneycontrol, executives planning to recruit staff pointed out that companies might even look at establishing offices in tier II and tier III towns, where many IT sector staff are based. A case in point is Sridhar Vembu’s Zoho; Vembu, in a recent media interaction, said that the company would have satellite offices in rural areas in Tamil Nadu, so locals can work in their hometowns rather than in Chennai, where the company is headquartered.

Question marks over the future

If such moves become the norm, it would be a big blow for interstate bus operators.

“If the numbers come down by half, what will we do with the buses?” asks Alagappan.

There are close to 4,000 interstate and inter-district buses plying in Tamil Nadu, employing about two lakh directly and another eight lakh indirectly via allied industries. A significant portion of these employees would be affected.

Alva concurs. Interstate buses haven’t been running and the number of buses that IT companies avail of to ferry employees to the office and home has fallen sharply. “So, if an IT company was using 10-12 buses to pick up and drop employees per campus, they are using only one now,” he explained. Most of the major IT companies have a couple of campuses across cities in India.

Bus operators are in a fix and unclear about how to move forward. Their associations are seeking interest and tax waivers to help them tide over the crisis in the short-term. Indeed, Tamil Nadu’s bus operators are at loggerheads with the State government over this issue, with no relief in sight.

But a larger question looms over the shape of their business in the post-Covid world. Alagappan said operators are all looking at different opportunities such as logistics, but this will take time.
Swathi Moorthy
first published: Aug 26, 2020 04:36 pm

stay updated

Get Daily News on your Browser
Sections