Will COVID-19 Permanently Change Business Rules and Regulations?
The restaurant industry has spent years pushing a once radical idea: Restaurants should be able to sell alcohol to go. But very few lawmakers supported it.
Then COVID-19 arrived. To help restaurants survive, more than 30 states temporarily changed their laws to allow off-premise alcohol sales. Consumers are thrilled; in surveys, up to 85 percent say they want to-go alcohol forever. So now the industry has a new ambition. “Our goal is to make these temporary ordinances permanent,” says Mike Whatley, the National Restaurant Association’s VP of state and local affairs.
This isn’t an isolated story. As the pandemic alters industries, it has also altered the rules that govern them. “Governments are saying, ‘You know, we have some rather restrictive legislation,’ ” says Matt Ridley, author, most recently, of the book How Innovation Works, and a member of the U.K. House of Lords. “I think this will prove to be a moment of opportunity for entrepreneurs to change the way we do things.”
To take advantage, Ridley says that entrepreneurs should look for fallen barriers. Telemedicine is a perfect example. U.S. laws once restricted how doctors could connect with patients and be reimbursed for virtual visits. That changed recently, leading to a boom in remote medical care — and opportunities for entrepreneurs to develop new solutions. The same is true in other industries, where laws once made disruption difficult.
“If you were thinking of starting a new airline, for example, with a wholly new model of how you handle passengers and so on, this might be a very good moment,” Ridley says. “Quite a lot of airlines may disappear. A crisis is a period in which incumbents lose power, and that creates virgin soil for competitors.”
What happens if these law changes really are temporary? That’s where Uber may serve as a useful guide, Ridley says. The company famously (and infamously) expanded into new cities, even if local laws forbid it. By the time lawmakers caught up, people loved Uber — and were angry at their local government for trying to stop it. Uber generally won the fight.
“I’m not suggesting that people break the law,” Ridley says, but there’s still a lesson to learn. Laws are being interpreted differently now, especially in areas that are useful during a pandemic. If an entrepreneur can seize an opening, and use it to prove how valuable their new idea is, then they may change consumers’ expectations forever.
Stan Khlevner knows this well. He’s the founder of Airzus, a company that uses drones for construction site mapping. He’d long wanted to try drone deliveries, but that was against FAA rules. When the pandemic began, he called the FAA anyway to ask if he could deliver necessary supplies to people stuck at home — and to his shock, the FAA said yes. It had begun reinterpreting its rules, and now said this: Drone operators can run deliveries…but they must be able to see the drone at all times.
With that go-ahead, Khlevner launched a brand called Dive Delivery that operates in two California counties. His packages contain two face masks and a bottle of hand sanitizer, and he said it’s been very popular — and leaves people wanting more. “Almost all the customers that have received drone deliveries have asked, ‘When can we order more things?’ ” he says. “People are ready for this.”
What comes next is anyone’s guess. But now, perhaps more than ever, experts say entrepreneurs may be able to influence future laws. It’s why Whatley, of the National Restaurant Association, likes to see entrepreneurs proudly touting their newly legal services. “Put it on social media,” he says. “We’ve seen a lot of these go viral, especially the alcohol issue, based on a restaurateur tweeting about it and getting customers’ support. The more people get accustomed to being able to order a margarita with their favorite taco to go, it makes it much harder for lawmakers to take it away.”