Raphael Stevens

New Zealand has become the latest country to abandon a “zero Covid” strategy, a decision that comes as the delta variant of the virus proved too potent to stop.
A “zero Covid” policy is one that seeks to eliminate community transmission of the virus.
Experts say the highly infectious delta variant makes that tricky.

Police officers wearing protective masks talk to motorists at a checkpoint in the Bombay area of Auckland, New Zealand, on Wednesday, Aug. 12, 2020.
Bloomberg | Bloomberg | Getty Images

LONDON — New Zealand has become the latest country to abandon a zero Covid strategy, with the virus proving much harder to stop now the highly infectious delta variant is dominant.
After adopting one of the world’s strictest approaches to trying to control the spread of Covid-19, New Zealand announced on Monday that the country would no longer pursue an approach that would attempt to eliminate all Covid cases.

This zero Covid strategy, also employed by the likes of China and Taiwan, involves strict lockdowns (even after the detection of just one or a handful of cases) and extensive testing, heavily controlled or closed borders, as well as robust contact tracing systems and quarantine mandates.
The move comes after a lockdown in the city of Auckland failed to stop the virus in the face of the more virulent delta variant. It is estimated to be 60% more transmissible than the alpha variant originally discovered in late 2020, and which itself usurped a previous, less infectious version of the virus.
New Zealand has been notoriously strict in its tackling of Covid; Prime Minister Jacinda Ardern put the entire country under a strict lockdown in August after a single suspected case of Covid caused by the delta variant — at that time the country’s first coronavirus case in six months — was reported in Auckland.
But on Monday, Ardern said that the city’s lockdown would be eased gradually and that the country’s strategy towards tackling Covid was changing.
“For this outbreak, it’s clear that long periods of heavy restrictions has not got us to zero cases,” Ardern said during a press conference.  “But that is OK. Elimination was important because we didn’t have vaccines. Now we do, so we can begin to change the way we do things.”

Ardern said it was important that the country maintain strict controls, however, saying it still needed to “contain and control the virus as much as possible, while we make our transition from a place where we only use heavy restrictions to a place where we use vaccines in everyday public health measures.”

Why it’s not working

It’s the first time that New Zealand has publicly signaled a shift away from a zero Covid strategy, coming after its neighbor Australia also abandoned its zero tolerance, or “Covid zero” approach in early September, saying it had shifted to a position of “learning to live with” the virus.
Similarly to in New Zealand, Australia’s decision to abandon the strategy came after a strict lockdown in Melbourne railed to quell an outbreak there. 
At the time, Victoria state’s Premier Daniel Andrews noted that “we have thrown everything at this, but it is now clear to us that we are not going to drive these numbers down, they are instead going to increase.”

Victoria Police patrol at St Kilda beach on October 03, 2020 in Melbourne, Australia. Coronavirus restrictions eased slightly across Melbourne from Monday 28 September as Victoria enters into its second step in the government’s roadmap to reopening.
Darrian Traynor | Getty Images News | Getty Images

Experts are not surprised by the shift in strategy, noting that the spread of the delta variant makes such approaches futile.
“It’s no surprise that New Zealand has abandoned its ‘zero covid’ strategy – the highly transmissible delta variant has changed the game and means that an elimination strategy is no longer viable,” Lawrence Young, a virologist and professor of molecular oncology at the University of Warwick, told CNBC Monday.
“That doesn’t mean that NZ’s and Australia’s robust approach to managing the pandemic – strict border restrictions, quarantine measures and strong contact tracing – hasn’t been effective but continued heavy restrictions are damaging to individuals and society,” he said.
Zero tolerance policies will become harder as the rest of the world opens up, he added, but stressed that doesn’t mean people shouldn’t remain vigilant. “We need to stop the virus spreading and mutating by doing everything we can to support the global roll out of vaccines.”

CNBC Health & Science

Trying to completely suppress the spread of Covid-19 has often been questioned by experts, but in countries where vaccination rollouts have been slower, lockdowns have served to slow, if not eradicate, the spread of the virus.
Defending the Auckland lockdown Monday, Ardern said pursuing a zero Covid strategy had been the “right choice and the only choice” for Auckland while vaccination rates had remained low, with only 25% of Aucklanders fully vaccinated at the time.
Now, seven weeks later, she said that 52% of Aucklanders were fully vaccinated, with 84% having had one dose. Clinical data shows that full vaccination against Covid-19 is highly effective at protecting people against severe Covid infection, hospitalization and death.

Zero Covid adherents

Zero Covid strategies remain in place in China, Taiwan and Hong Kong, however, with none of them showing signs of relinquishing it just yet. Other Asian economies that have adopted similar approaches include Macau, Singapore, South Korea and Vietnam.
The data shows that this strategy has helped keep cases and deaths in the region much lower than in Europe and the U.S. The latter has seen the highest death toll from Covid in the world, with over 703,000 deaths.
On Monday, Taiwan’s Central Epidemic Command Center said there had been zero new local cases of Covid-19 and five imported ones, marking the fourth consecutive day without a local infection.
On the same day, Hong Kong also recorded four new cases (all imported, continuing a trend seen in recent weeks), while China reported 26 new cases of confirmed infections on Monday, again, with all of them cited as imported cases, although the accuracy of China’s data during the pandemic has been questioned.

Experts in the region say there’s good reason for not giving up on zero Covid strategies yet, particularly when vaccination rates are patchy.
David Hui, a professor at the Chinese University of Hong Kong who leads an expert committee that advises the government, told CNBC that Hong Kong won’t reconsider its zero-tolerance Covid-19 strategy to one of “living with the virus” until the vaccination rate is higher.
“In contrast to Singapore, [the] U.K. and other Western countries, the overall vaccination rate in Hong Kong is too low (67% with one dose and 62.9% of population fully vaccinated with two doses) to adopt living with the virus. The vaccination rate among those aged 70 years or under is around 30%,” he said.
“If we live with the virus, many elderly unvaccinated subjects will develop severe disease and our healthcare system will collapse.”

The Economist Intelligence Unit noted in a report in July that it expects zero‑Covid markets in Asia to retain tight border controls throughout 2021, only loosening from early 2022 when mass vaccination is achieved.
“Deaths among ‘zero Covid’ countries in Asia have been much lower than global peers and the economic impact less severe, contributing to a much shallower recession in Asia in 2020 than in other regions,” it said, noting that, “if the rest of the world had adopted a similar approach, zero‑Covid might prove a sustainable strategy. However, it now risks becoming one that will undercut rather than support economic activity as the global economy reopens.”
Still, the EIU noted, the policies ultimately adopted by zero‑Covid countries will still be more conservative than those in force in North America and Europe. “The approach is likely to target “low Covid”, with the approaches currently taken by Japan and South Korea serving as potential models,” it said.
The EUI believed China and Taiwan were the economies in the strongest position to maintain a zero‑Covid strategy, owing to their low reliance on cross border flows of capital and talent.

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Aaron Tan is going places.
As the co-founder of a newly crowned unicorn and one of Asia Pacific’s fastest growing start-ups, the Carro CEO is now on the road to a public listing. 

And with investors including Softbank getting onboard, he has no plans to slow down. 
“The question is, now that we have reached $1 billion, how do we reach $10 billion? How do we reach $100 billion?” Tan told CNBC Make It.

I wouldn’t say that I tricked my co-founders into founding the company together…

Aaron Tan
co-founder and CEO, Carro

Carro — a play on the words “car hero” — is a Southeast Asian online auto marketplace designed to simplify car deals using artificial intelligence technology.  
Founded in 2015 by Tan and his college friends Aditya Lesmana and Kelvin Chng, it achieved the coveted $1 billion unicorn status in June after securing $360 million in funding. The deal takes total money raised to over half a billion dollars and pits Carro alongside key competitors, such as Malaysia’s Carsome and Germany’s Carmudi, in an industry worth $50 billion and growing.
Yet, as Tan explained, it was some journey getting there.

Driven to succeed

The 36-year-old’s entrepreneurial story started when he was 13. As a teenager growing up in Singapore, the computer whizz would earn extra cash by building and selling websites.
But it was later, while working as a venture capitalist in the U.S., that he saw an opportunity to combine business prowess with his true passion: trading cars. 

Aaron Tan, co-founder and CEO of Southeast Asian autos marketplace Carro.
Carro

“When I was in the U.S. as a VC for many years, I remember very clearly, I met all kinds of automotive companies — your Beepi, your Uber, your DriveShift. What this showed me was the momentum in the space,” said Tan.
While the auto resale market was flourishing in the U.S., the same couldn’t be said for Southeast Asia. It was famously opaque, with several middlemen making it difficult for buyers and sellers to get the best deals.

What we saw was the changing behavior of car ownership.

Aaron Tan
co-founder and CEO, Carro

Tan wanted to change that. So, returning to Singapore in 2015, he teamed up with his classmates from Carnegie Mellon’s School of Computer Science to create an algorithm that would do just that.  
“I wouldn’t say that I tricked my co-founders into founding the company together, but I think I sold the opportunity that this could be much more interesting than whatever they were doing,” said Tan.

Tapping a fast-moving market

The trio was onto something. In a region with a vast and growing, digital-savvy middle class, price-sensitive consumers were increasingly opting for second hand models.  
“Expanding middle class combined with low car ownership rates in Southeast Asia were really the main factors that stimulated new car sales, and eventually this translated into a vibrant used car market as well,” Justinas Liuima, a senior research consultant at Euromonitor, told CNBC Make It.

Autos marketplace Carro launched Singapore’s first car subscription service in 2019.
CNBC

Carro capitalized on that demand, rolling out its online offering for individuals and wholesale dealers across Indonesia, Thailand, and Malaysia in the years that followed. Meantime, it added end-to-end financial services like loans, insurance and aftercare.
By 2019, inspired by streaming giants Netflix and Spotify, the company launched Singapore’s first car subscription service, allowing users to lease a vehicle for a monthly fee, with tax, warranty, and maintenance all included. 
“What we saw was the changing behavior of car ownership. Really the gap in the market was to look for people that want that flexibility. And more importantly, they actually want to try out new cars,” said Tan.

Navigating the pandemic

Then, in 2020, the pandemic struck. But what was a major roadblock for many start-ups turned out to be an opportunity for Tan and his team. 
Concerns over hygiene and personal safety sparked new demand for private transport options. And with borders closed and a global microchip shortage limiting car production, used car sales surged. 

Covid has definitely helped accelerate our whole digitalization internally and also externally.

Aaron Tan
co-founder and CEO, Carro

“Covid has definitely helped accelerate our whole digitalization internally and also externally, to the general public,” said Tan.
Among various initiatives launched by the company was a contactless “Showroom Anywhere” concept, which allowed prospective buyers to view and test drive cars without any direct human interaction. They could instead access the vehicle at a public carpark using contactless QR code entry.
As of March 2021, Carro recorded revenues of $300 million — up 2.5 times from the previous year. The six-year-old start-up says it is now profitable.

The road to an IPO

However, that growth comes against a backdrop of growing scrutiny on the auto industry. 
Transportation accounts for almost a quarter (24%) of global carbon emissions, of which road vehicles make up 75%. And even as governments and automakers make plans to phase out traditional combustion engine cars with electric vehicles, many existing gas guzzlers are simply exported to developing markets.
Carro, for its part, said it is playing an important role in the transition to greener transport methods. 

Carro says it is assisting with the transition to greener transport methods, by allowing buyers to trial new cars like electric vehicles.
Carro

“Our job is to enable that recycling or the reusing of the vehicles in the shortest period of time. And the second part of this is that [electric vehicles are] a strong tailwind for us, because this encourages change. For a platform like us, we strive whenever there is change in the market,” said Tan.
Sustainability will be one of the many things on Tan’s agenda as he sets out to list his company within the next 18 to 24 months. With regional expansion, AI developments, and acquisitions all on the cards, one thing’s for sure — it’s going to be an eventful ride.
“Between now and then, [we need to] get the company ready, controls need to be in place, people need to be in place, compliance needs to be in place,” said Tan. “Only then can we then say that okay, we’re ready to go public 12 to 18 months from now.”
Don’t miss: How this 32-year-old couple is redressing the multibillion-dollar fashion rental industry
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Rent the Runway filed for an initial public offering on Monday and revealed its subscriber base tumbled during the Covid pandemic but has since started to grow again.
The company plans to list on the Nasdaq exchange with the ticker symbol “RENT.”

Jennifer Hyman, Rent the Runway 
Scott Mlyn | CNBC

Rent the Runway filed for an initial public offering on Monday and revealed its subscriber base tumbled during the Covid pandemic but has since started to grow again.
The digital clothing rental platform also showed its losses mounted in 2020 and sales took a hit from fewer women refreshing their wardrobes.

The company plans to list on Nasdaq with the ticker symbol “RENT.”
Last year, Rent the Runway’s entire base of subscribers — including those who had paused their memberships — totaled 95,245, compared with 147,866 in 2019. It counted 54,797 active subscribers last year, down from 133,572 in 2019.
This year, however, the company has started to win some customers back. Rent the Runway counted 126,841 total subscribers in the six months ended July 31, compared with 108,752 in the same six-month period in 2020. It had 97,614 active subscribers over that time frame, compared with 54,228 in 2020.
“We couldn’t have foreseen the global pandemic and the resulting fight for our survival,” said Jenn Hyman, its co-founder and CEO, in a memo included in the SEC filing. “Today, Rent the Runway has emerged stronger.”

The company’s revenue fell to $157.5 million last year, from $256.9 million in 2019.

Its net loss amounted to $171.1 million in 2020, which was wider than the $153.9 million net loss it booked in the prior year.
For the six months ended July 31, Rent the Runway lost $84.7 million on revenue of $80.2 million.
The company lists the rapid growth of online shopping and the importance of sustainability as factors playing in its favor. But Rent the Runway also addresses in its S-1 filing that it must “normalize” clothing rental and resale for consumers in order to continue growing its subscriber base.
Founded in 2009, Rent the Runway is an online platform that offers users multiple subscription options to rent clothing and accessories from designer brands on a monthly basis. For example, a subscriber could rent eight items per month at a monthly rate of $99 for the first two months and then $135 for each month thereafter.
During the pandemic, Rent the Runway shuttered its existing brick-and-mortar retail stores and overhauled its subscription plans, sunsetting an unlimited option. It also launched into the resale market, where no membership is required to shop items on its site.
To grow sales in the future, Rent the Runway said, it plans to launch into new categories and expand internationally.
In going public, Rent the Runway will join the likes of Poshmark and Thredup, which also appeal to consumers interested in sustainable shopping. And it comes after eyeglass retailer Warby Parker went public through a direct listing last week. The sustainable shoe brand Allbirds also has an expected IPO in the pipeline.
Last fall, Rent the Runway raised a round of funding at a $750 million valuation, losing the billion-dollar unicorn status it had cemented in 2019.
Rent the Runway had confidentially filed for a public listing in July.
Goldman Sachs, Morgan Stanley and Barclays are the lead underwriters for its offering.
Read the complete S-1 filing with the SEC here.

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Southwest Airlines said its 56,000-person workforce staff must be vaccinated by Dec. 8 to continue employment.
American Airlines, Alaska Airlines and JetBlue Airways made similar announcements last week.

A traveler wearing a protective mask speaks with an attendant at the Southwest Airlines check-in area at Oakland International Airport in Oakland, California, on Tuesday, Jan. 19, 2021.
David Paul Morris | Bloomberg | Getty Images

Southwest Airlines said Monday that its 56,000-person workforce must be vaccinated against Covid-19 by Dec. 8 to continue working at the airline because of new federal rules, joining other carriers who made similar announcements last week.
The Biden administration last month said staff of federal contractors must be vaccinated, unless they are granted a religious or medical exemption.

Southwest and other major airlines are federal contractors since they fly government employees, cargo and provide other service, such as flights for Afghanistan evacuees in August. The new federal guidelines for government contractors are stricter than those in President Joe Biden’s plan to increase vaccinations among companies with more than 100 employees by requiring inoculations or regular Covid testing.
“Southwest Airlines is a federal contractor and we have no viable choice but to comply with the U.S. government mandate for Employees to be vaccinated, and — like other airlines — we’re taking steps to comply,” Gary Kelly, CEO of the Dallas-based airline, told staff on Monday.
Pilots unions at American and Southwest have strongly opposed vaccine mandates, saying aviators are concerned about side effects from vaccines
Kelly said the decision that the provisions for medical and religious exemptions are “are very limited.”
Alaska Airlines, JetBlue Airways and American Airlines last week told their employees that they must be vaccinated since those airlines are government contractors as well.

United Airlines mandated vaccines for its 67,000-person U.S. staff in August and more than 96% had uploaded proof of inoculation after the deadline a week ago.
Delta Air Lines, also a federal contractor, said it is examining the federal rules and hasn’t mandated vaccines for its staff of about 80,000 people.
The Atlanta-based airline next month plans to impose a $200 monthly surcharge on employee health care premiums for unvaccinated workers.
“Delta’s own approach to encourage a high rate of employee vaccinations continues to work, with an 84% workforce vaccination rate and climbing daily,” the airline said in a statement.

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