COVID-19 is an infectious disease that has made people ill on every continent except Antarctica, killing more than ten thousand people. This virus may not be as deadly as the Black Death or the Spanish Flu, but it still has the potential to bring about unprecedented inflation, poverty, and global economic crisis.

As COVID-19 continues to spread, markets have reacted in kind. The S&P 500 entered a bear market for the first time since the financial crisis of 2008, and the Dow witnessed its biggest one-day percentage drop since the 1987 Black Monday crash. Markets worldwide are also facing disastrous drops. European markets recorded their worst session since 2016, and major benchmarks in Asia also closed down.

Every asset class – stocks, bonds, and oil – has come under siege as investors flee toward the safety of cash, pushing the U.S dollar’s value upward. Oil prices are mimicking the 1970s, dropping to nearly $20 per barrel. All 11 sectors of the S&P are in the red zone, with travel and tourism being hit hardest. Marriott is down 34%, United Airlines 33%, MGM Resorts 30% and Alaska Air 32%.

The Federal Reserve has announced that it will slash interest rates to zero and buy $700 billion in government and mortgage related bonds. The Reserve also announced further measures, like potentially injecting $1.5 trillion into the market by buying repurchase agreements.

As the New York Federal Reserve has stated, “these changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak.”

In addition, the Fed announced that it is going to start a crisis-era program of ‘quantitative easing,’ in which the central bank will buy bonds worth billions of dollars to further push down interest rates and keep markets flowing freely. The Fed is also providing generous loans to banks around the country so they can turn around and offer loans to families and various small and medium businesses in need of a lifeline.

However, there is still suspicion among investors that these measures, though robust, will only create a short-term positive response in markets, given that factories have indefinitely stopped producing goods and supply chains are continuously getting disrupted by quarantines and lockdowns.

U.S Markets Plunge as Novel COVID-19 Spread

The gig economy is facing some ups and downs as COVID-19 takes hold in the U.S.

Workers for Uber and Lyft, particularly those who rely on the platforms as their sole source of income, have been greatly affected by COVID-19. Initially, Uber and Lyft halted their carpooling services to stop the spread of the virus, and shelter in place orders have further restricted ridesharing to essential travel only. With more people sticking to their home offices, demand has gone down for ridesharing companies, which has put many workers in serious financial situations. In fact, Uber reportedly recorded a drop in ride volume of up to 70 percent in the hardest hit cities in the U.S.

But while ridesharing is facing demand challenges, delivery is feeling the demand boom. Instacart, a San Francisco-based company, which allows users to get groceries from their favorite stores delivered to their doorstep, announced Monday that the company will be onboarding 300,000 new “full-service” shoppers in light of the increased demand due to social distancing orders. More than one sixth of those shoppers will be located in California. Uber may be preparing to double down on its delivery sector as well, according to TechCrunch, with CEO Khosrowshahi stating that the company may expand delivery into the health sector. Lyft has also reportedly expanded into medical supply and food delivery. Even so, issues surrounding exposure and protection of these workers, who are essential to the social distancing efforts of communities like San Francisco, are top of mind as well.

The threat of the virus and economic instability for drivers and delivery workers come at a time where, arguably, gig economy workers have more protection than ever. Uber and Lyft recently lost a battle in a California district court to halt the implementation of AB-5—a controversial California gig worker protection bill that became law in early 2020. In recent weeks, the companies have experienced pressure from activists and lawmakers, including California senators, to implement policies that secure the incomes of gig workers, de-incentivize working while ill, and reduce risk of exposure. Uber, Instacart, and others recently implemented paid sick-leave policy for workers who test positive for COVID-19. Delivery companies like DoorDash and Postmates and others have also introduced “contactless delivery” to limit person to person contact. Additionally, despite its resistance to offering social protections for workers, Uber’s CEO requested that the federal government stimulus include protections for its workers affected by the virus. But coronavirus doesn’t just affect those drivers and delivery workers who are sick, thus it’s likely that pressures will continue as gig workers risk their health to maintain an income.

Either way, recent weeks have shed light on gaps in policy protecting the individuals who are proving to be vital to the health and well-being of our communities during this pandemic. We should all make sure that those gig workers putting themselves at risk for the rest of us in grocery stores, at restaurants, and even at our front doors are tipped well.

With COVID-19, The Gig Economy Faces Old Challenges In New Terrain

In addition to the hundreds of thousands suffering from COVID-19, students have also been harmed by the coronavirus pandemic. Schools have closed in 119 countries, affecting over 860 million students around the world. California Governor Gavin Newsom recently suspended standardized testing and announced the state’s public schools will likely remained closed for the rest of the academic year. Many schools have deployed remote technology to continue instruction, but the sudden switch to distance learning exacerbates academic inequities.

Shutting down schools has become a key part of the social distancing strategy that public health officials have embraced to slow the spread of the coronavirus. Some argue that schools are well suited to spread disease: small classrooms, cafeterias, and busy busses put students, their families, and school employees at risk. Government officials hope that closing schools will help flatten the curve so that the number of patients sick with COVID-19 does not overwhelm the capacity of the healthcare system.

But school shutdowns are costly, and the closures may have long-lasting impacts on students who already face systemic disadvantages. Some school systems lack resources to make the full switch to distance learning. Even large school districts with the resources to shift online still have many students who lack computers or tablets, access to the internet, consistent supervision, or adequate food at home. The more than 1.5 million students who experienced homelessness in 2017-2018 may not have homes at all. As a result, the sudden shift to distance learning in the wake of coronavirus means that the wealthier students in the wealthier schools will likely zoom ahead of those who lack the resources to continue effective learning.

Coronavirus Closures Exacerbate Education Gap

The legal profession is known to be conservative in many aspects, including with the use of technology. Yet the industry has a proven need for innovation. Entrepreneurs have acted to challenge this conservative approach by providing business-to-business (B2B) services to legal professionals. Providing Software as a Service (SaaS) to law firms has turned out to be a successful business model; however, it is not the same when innovation aims to disrupt the legal industry.

Atrium was a legal-tech startup co-founded by Justin Kan, who is also the co-founder of Justin.tv. That company later rebranded as Twitch and sold to Amazon for $970 million. Atrium aimed to provide software for startups that navigates operational and legal matters, including providing an in-house legal team to companies in need of advice. Atrium raised the interest of startup companies as Kan, the CEO, was a proven entrepreneur. The goal of Atrium was to reduce costs by helping its attorneys spend more of their time doing substantive work, and to translate this into savings for clients.

However, this technology proved not to be cost-efficient. The company was first hit by the decision of some of its lawyers to leave, forming their own law firm and taking Atrium’s clients. Then, the CEO announced Atrium had terminated its software business and would continue operations as a small law firm. According to the CEO, Atrium failed to figure out how to deliver better service than a traditional law firm. Furthermore, customer feedback pointed out that Atrium’s services felt chaotic, rendering customers unsure of their legal representation.

The Atrium case demonstrates that disrupting the legal industry will take time, even if it seems inevitable. There is a mismatch between the increasing cost of hiring a lawyer and the emergence of a large number of startups, seemingly every day. Innovation is most likely to enter the legal industry slowly, as needs are proven and borne out.

Disrupting Law Firms Proven to be Difficult After $75M Legal-Tech Startup Shuts Down

The Office of the National Coordinator for Health Information Technology (ONC) adopted a final rule on March 9, and the Centers for Medicare & Medicaid Services (CMS) issued another rule on the same day, both of which are aimed at improving patients’ access to their own medical records.

According to the final rules, hospitals are prohibited from blocking patients’ information and are required to send electronic notification to another healthcare facility where a patient is transferred. The final rules also empower patients to access their medical data through any third-party application, such as Apple Health. CMS mandates medical and insurance plans to enable patients to transfer their clinical data to establish a cumulative health record for information sharing purposes.

Despite the empowerment of access to their health data, critics are concerned about patients’ privacy. The final rules “fail to protect consumers’ most sensitive information about their personal health,” Rick Pollack, the American Hospital Association president, commented. “The rule lacks the necessary guardrails to protect consumers from actors such as third-party apps that are not required to meet the same stringent privacy and security requirements as hospitals.”

The American Medical Association has warned that the new rules could allow patients who transfer their confidential medical information to third-party apps to get involved in rampant privacy abuse, given the lack of federal privacy protections regarding customer data on the apps. Electronic Health Records (Epic) believes that the rules could result in the misuse of customers’ data by, for example, apps exploring more data than patients intended without their consent.

A pamphlet  designed by federal health regulators warns patients: “Be careful when sending your health information to a mobile application or other third party” because health providers are “no longer responsible for the security of your health information after it is sent to a third party.”

It’s possible that these platforms would have no problem using patients’ private information for insurance underwriting if the personal information was revealed on these health apps, such as sharing with app developers, affiliate firms, or third-party companies to target the suitable customers in terms of sales and marketing.

Moreover, information of family members will also face sharing risks, as Epic estimates that roughly 79% of healthcare apps are engaging in the data distribution business. For the sake of privacy, patients need well-rounded notification regarding how their data will be utilized and whether app developers will be responsible if they do not comply with what they have promised.

Federal Requirements for Sharing Medical Records Jeopardize Privacy

Businesses closed. Customers gone. Employees home. While COVID-19’s economic impact is still in its earliest stages, many have already felt its repercussions. Over the past month, effects from the outbreak have hit small businesses hard, and many companies do not have the resources to afford temporary – not to mention prolonged – closure. In a letter to its portfolio companies, Sequoia Capital labeled COVID-19 as the “Black Swan of 2020” and warned of drops in business activity, supply chain disruptions, and curtailment of travel.

Among the businesses affected are high-flying technology startups. California, home to tech hubs like San Francisco and Silicon Valley, was the first state to enact measures restricting travel, business hours, and in-person socialization. These restrictions create extreme difficulty for founders raising capital or running operations. While some venture capitalists publicly express their continued interest in funding companies, many predict that the deal pace will slow due to practical difficulties associated with a remote work environment. Investing in young, unestablished entrepreneurs without a face-to-face meeting or a hands-on product demonstration might be a deal-breaker.

Startups in the travel and leisure industries are being hit especially hard. Airbnb, a tech darling commanding one of the largest private valuations, may pause their plans to go public later this year. According to sources, Airbnb shares were privately valued at more than $140 prior to the outbreak, but are now valued at close to $105 – a $15 billion devaluation. The company is reportedly considering raising more cash to fund operations but may have difficulty attracting a high price given the economic uncertainty in the global markets. In the meantime, week-over-week booking demand for their online rental marketplace cratered 95% in Asia, 75% in Asia, and 50% in the U.S.

Amid the uncertainty, some companies are trying to look to the future. Many founders and funders took advantage of the rosy financial outlook prior to the outbreak, and many startup companies are sitting on large piles of cash. The decade-long bull market fueled aggressive investments from private investors, pushing startup valuations to all-time highs. However, many startups that have not sought private equity, relying instead on cash flow from sales or donations, might be at real risk of insolvency. Perhaps Sequoia, quoting Darwin, has it right: “Those who survive are not the strongest or the most intelligent, but the most adaptable to change.”

Cash Crunch- Global Pandemic Squeezes Startups

As businesses are forced to shut their doors due to the evolving pandemic, the stock market took a significant hit on Monday, March 16^th. While the S&P 500 saw the most significant drop since the beginning of the outbreak (roughly 12%), it seems the market is already making strides to recover.

On Thursday, the S&P 500 and Dow Jones were able to trade relatively high after a week of abysmal decline. Contrary to past expectations derived from similar economic events, many tech stocks are gaining strength in spite of the crisis. The mandated social distancing and shelter-in-place in certain counties has led to a resurgence of usage for companies like Facebook, Netflix, and Amazon, and their stocks in particular appear to be recovering as of today (up 7%, 8%, and 5% respectively). It seems that investors may have found more confidence in tech companies that were able to react quickly and efficiently to the crisis and continue to provide services to people during this isolating time.

Additionally, the volatility of the market is at an all-time high as investors evaluate the current onslaught of information regarding COVID-19. Wall Street investors are watching policy makers closely as they consider drastic bailouts accompanied by limits on stock buybacks and executive compensation. However, these limitations may actually hinder shareholder value. With stock buybacks, companies can make massive purchases of their own stock in order to raise their stock price and help the market recover. By limiting companies’ ability to superficially inflate stock prices, the bailouts may not be as effective as they could be.

As with the pandemic itself, this situation is continually evolving. Although the stock market appears to bounce back, the economic implications of this virus will be felt by many in the coming months. Economist Patrick Anderson commented: “This is a body blow to the economy unlike anything we’ve experienced in recent memory. Even the Great Recession did not include shuttering of businesses by government order at the same time that people were being told to stay home.”

This is undoubtedly an unprecedented time, and solutions from policy makers and community members must be equally unique.

Stock Market Update as the Nation Attempts to Recover from COVID-19 Crash

Amidst the general anxiety surrounding the spread of Coronavirus, a wealth of misinformation within social media adds to the panic. Conspiracy theories range from claims that the virus is a concoction by pharmaceutical companies to increase sales of a yet-to-be released vaccine to claims that there are many medications already in distribution that can immunize people from the virus. Despite the aggressive effort of social media companies, misinformation continues to escalate.

Facebook, YouTube, and Twitter all recently stated they are making considerable efforts to promote reliable sources of medical information and maintain direct communication with the World Health Organization (“WHO”) and Centers of Disease Control and Prevention (CDC). Despite their efforts, private groups are still able to share misinformation regarding the virus, including a Facebook group with over 100,000 members. YouTube, while consistently removing videos depicting medically unsubstantiated methods to prevent the spread of Coronavirus, is still host to videos that erroneously claim the virus has a cure. Even though companies are constantly working against the spread of misinformation, false claims continue to surface and remain a constant issue. Even so, there is likely a ceiling to companies’ abilities to limit bad information, especially during a global crisis. WHO not only declared the virus a pandemic, but noted that the virus has sparked an “infodemic,” with an overwhelming amount of information exchanged through social media, both accurate and false.

Fortunately, social media companies are not the only line of defense against the proliferation of “fake news.” WHO launched a program called EPI-WIN, or WHO Information Network for Pandemics, to ensure that appropriate facts about the virus are communicated to the public. The program is rapidly debunking unjustified medical claims on social media and through the use of large-scale employers. Based on a 2020 study, which reflects the idea that employers are the most trusted institution in society, EPI-WIN contacted Fortune 500 companies and others in a variety of industries to advance accurate information through Q&A forums. This endeavor, in conjunction with social media companies, will hopefully slow the spread of harmful and false information.

While misinformation may just be an inconvenience and point of social contention in some situations, it can become hazardous in others. The fact that fake news spreads much more quickly than real news creates a dynamic in which inaccurate medical information could actually worsen the impact of the outbreak. If large portions of the public turn to false treatments, the disease could travel faster and further than it ordinarily would have.

In this time of upheaval, constant change, and misinformation, individuals can employ the “SIFT technique” to investigate questionable content. SIFT stands for stop, investigate the source, find better coverage, and trace claims, quotes, and media to the original content. This method can help readers separate reliable information from faulty sources online and help the public stay accurately informed.

Coronavirus- A Social Media Pandemic

Historically, the venture capital (VC) industry has concentrated its main activities locally, as a regional phenomenon. Unsurprisingly, the US venture industry remained geographically focused in 2019 as its three main hubs – California, New York, and Massachusetts – held up to 84% of total US VC Assets Under Management. Regarding foreign markets, until this past decade, both VC limited and general partners have avoided deploying capital overseas due to additional political, legal, administrative and cultural risks that impose challenges. Despite that phenomenon, the time has come for innovation to be driven not only by the startups but also by the venture capitalists while increasing portfolios abroad.

Recent data evidence the expansion of investments to foreign markets. According to the NVCA, 48% of the $257 billion invested in 2019 was entrusted to companies outside the US, maintaining the steady foreign market share of about 50% seen in the last four years, in contrast to past numbers: 33% in 2010, 16% in 2004, and less than 10% in the 1990s. In this sense, a few players show off their performance: the 500 Startups firm topped PitchBook’s 2019 ranking as the most active global early-stage VC investor with 285 deals; the Plug and Play Tech Center grew their international investments by 11% in 2019. More specifically, these are some countries where startup funding is blasting off: Colombia, Vietnam, Nigeria, Mexico, Brazil, Spain, and India.

A close look in the Latin American market illustrates such a trend, as it has been considered the “new China” in regards to venture investing. Softbank announced in 2019 the launch of a new $5 billion technology growth fund for Latin America.

Colombia’s main representative, the delivery startup Rappi, raised its Series E financing round of about $ 1 billion in a pre-money valuation of $2.5 billion. Brazil – historically the largest recipient of venture funding in Latin America – ranked third in the number of unicorns in 2019 – already accounts its newest representative of 2020, and enlists several other candidates to such a title. Given its high growth rate in the past two years, the country hosts initiatives that support first-time founders studying abroad to launch their businesses in Brazil and holds the attention of investors establishing their roots abroad, like 500 Startups.

A few factors contribute to the worldwide expansion, such as geographical arbitrage, that permits investors to retain undervalued companies and professional talents to support them in reaching profitable exit strategies, either in the US or in their home market. Diversification of portfolios and the growth of international networks may also drive VCs to differentiate themselves in the market. Also, the increase of corporate venture capital, the lack of financing options compared to the number of global opportunities – which developed a more cash conscious mentality – and the increase of the internet penetration allied to the digitalization of services are elements to be considered.

Overall, the US and foreign VC landscape are likely to share a systematic recession that is yet to be determined by the impact of the current global crisis (COVID-19), and should be overcome with time, based on the historical resilience of the industry through financial downturns

Venture Capital Investments Expand to Foreign Markets

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Starbucks implemented new cups in various cities across the world to promote an environmentally friendly way of serving customers. The paper cups have a liner made out of biodegradable materials instead of the customary plastic option. Heather Haddon of the Wall Street Journal noted that “the coffee giant on Monday started using a prototype of a more sustainable paper cup in some of its cafes in New York, San Francisco, Seattle, Vancouver, and London.” Starbucks is still ensuring top quality coffee by asking baristas and customers whether their drinks are remaining hot and avoiding leaks.

Two years ago, Starbucks joined the movement for more environmentally friendly service by banning the use of plastic straws and setting a goal of eliminating the item from its stores by 2020. Starbucks also uses strawless lids for many of its cold beverages. In an article written by The Guardian, Arwa Mahdawi stated “cold beverages make up more than 50% of Starbuck’s beverage mix, an increase from 37% just five years ago.” In addition to implementing its no straw policies, Starbucks now turns to the cup itself.

Many people in the public are concerned with the environmental risks posed by plastic, and Starbucks does not take these worries lightly. Earlier in the year, Starbucks stated it wanted to cut the amount of waste generated by half in 2030, but there have been challenges to the company’s goals of being greener. Just before 2009, Starbucks recognized the issues surrounding the recycling of its cups and began to focus more on packaging efforts and other ways to help the environment. In 2018, both Starbucks and McDonalds “committed $10 million to a partnership among consumer companies working to develop more sustainable cups.” Also, internal research teams within the company have begun studying ways to have a cup for hot drinks that can be recycled and composted by 2022.

For now, Starbucks will begin testing the new greener cup in its stores. This new way of serving customers came after twelve prototypes were tested, but the final product’s coating inside is made of renewable material that can be spread onto paperboard before cutting. Starbucks will continue to think of new ways to achieve its goals of sustainability and environmentally friendly packaging, but for now, the coffee giant is on the right path towards success.