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Comment by save_ferris | Hacker News Reader

I think the major miscalculation you’re making here is that business will magically return to these places as soon as things open back up.

People are not going to patronize restaurants and bars as long as the risk of infection remains high. If half of people stay home due to Covid and the other half don’t care, most businesses won’t be able to sustain. A quick recovery is completely dependent on full economic participation, particularly by those lucky enough to still have jobs.

The US still has no scalable testing system, despite being promised one over a month ago, and we still don’t yet know if Covid can reinfect people. Opening back up without testing puts small businesses at risk by asking them to start spending money to open back up with no guarantee business will come back. If that happens, the government will have more people to bail out.

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> People are not going to patronize restaurants and bars as long as the risk of infection remains high.

It's not even that. People's spending habits have and will change drastically (those who still have incomes). And those who were put out of work will be playing financial catch-up once they obtain new employment and are very unlikely to patronize bars, etc at the same rates they used to.

We also have to consider that people who do keep their jobs already are or will likely be supporting family members and friends in need with their excess cash for a while (the cash they would typically spend at the bar, etc).

Additionally, those with jobs who can are going to continue saving their money at higher rates than before (which is currently happening despite the risk of inflation and/or low negative interest rates). At least, this is how I've changed my habits.

I agree with this too, I'm definitely in the still-employed-but-spending-has-changed camp as well.

We're completely ignoring the higher order effects of what the pandemic is doing and I think we do so at our own peril.

Our governor talks of opening restaurants with fewer tables. That's pretty much a no-go, they rely on filling all the tables and then its thin margins. Running half a restaurant with full overhead? Nope.

"Running half a restaurant with full overhead?"

Why would you assume that they would have full overhead upon re-opening?

Because rent, lights, and staff need to be around the full shift.

What does this mean?

If you pay rent on your building you pay the same rate all the time, even if you're not open.

If you open up, the cost of powering your appliances, lighting, heating, etc. is all essentially the same whether or not you feeding 100 people a day or 1000.

"If you pay rent on your building you pay the same rate all the time, even if you're not open."

You are correct that the rate is constant, but it can be constantly low to the point that it's feasible to only be open during select hours/times. Plenty of restaurants are only open for one course each day, say breakfast or dinner. And in the future, when it comes to 'reopening' - many restaurants which were previously 'full service' will have no choice but to scale back and start small again.

"If you open up, the cost of powering your appliances, lighting, heating, etc. is all essentially the same whether or not you feeding 100 people a day or 1000."

It is not essentially the same at all. These are variable energy costs than can and will fluctuate based on usage tied to controls such as hours of operation and number of customers served during said time.

Obvious examples are gas as a cooking source that varies a lot depending on whether cooking for 100 or 1,000. Others, like electrical, can vary based on which physical sections of a restaurant are open (or not). On a slow day, it's not uncommon for a portion of an establishment to be closed off to conserve energy resources like HVAC.

It’s harder for restaurants to drastically reduce overhead because major expenses like rent and utilities tend to be fixed.

No question it's harder - it's not about subjective states like harder vs easier...

Most service establishments operate on razor thin margins that sustain only on regular business activity, so being forced to pay the same amount of rent while doing only half of one’s normal business is not typically feasible.

I’m not really sure what is subjective about that.

That is assuming they are paying the same amount of rent, which they likely will not be, at least for some period of time.

And what's subjective are these concepts like "hard" or "easy" - a lease agreement is definitely an objective instrument by design.

Big assembly-line restaurants don't work with half the kitchen staff missing.

Little diners can't hire half a cook.

There is some wiggle room. Fewer waitstaff, but they're the least paid anyway. So maybe not full overhead, but near enough to make no difference.

"Big assembly-line restaurants don't work with half the kitchen staff missing."

Sure they can, I've experienced it firsthand circa 2007-2009.

"Little diners can't hire half a cook."

In the 'little diner' scenario, often times the host is the server is the cook is the owner - sometimes its equivalent to 25% cook.

"There is some wiggle room. Fewer waitstaff, but they're the least paid anyway. So maybe not full overhead, but near enough to make no difference."

There's double-digit wiggle room.

I'm not suggesting that any of the above is ideal or easy, but it can and will be done by those who want to succeed given the opportunity. Some Restaurateurs are among the best entrepreneurs around.

I would imagine opening a restaurant and filling half the tables is better than a closed restaurant and no tables. Yea, margins are thin even when all tables are full but I'm sure they could negotiate on overhead costs + the loans from the government can help. In many cities I would be a lot of people would be willing to go out to eat once the ban is lifted - one for the experience, two so they don't have to cook anymore, and three to support their local businesses.

More evidence furthering the point people will continue to stay home even if the government allows business to reopen: https://twitter.com/dkthomp/status/1250471852633448448?s=21

I'm in Virginia right now (near DC) and most people appear to be going about their lives like nothing happened. I'm also not worried, I think the whole thing is largely mass hysteria and blown wildly out of proportion.

There's a doomsday pandemic narrative that some people are trying to push, but I think there's a significant portion of the population that simply does not care and isn't worried.

Of course, trying to have a real discussion about this on the internet is hopeless because people downvote anything they dislike or don't agree with. Facts don't matter, and this whole virus mania is the greatest example of facts not mattering I've ever witnessed.

You very well may be correct, but I'd like to point out that for a broader sense of "doomsday narrative", living in or near DC while the rest of the US crumbles would be a lot like living in Rome when the Germanic tribes were overrunning the Empire's frontiers. DC is the absolute best place to be during an American empire collapse - until, of course, the very end.

I actually live in NYC, I'm just in DC for a few weeks (have already been here a while). When I left NYC it was very quiet, not at all like it is here. I left before things got really crazy.

How is traffic on 66 and 495? That should be a decent indicator.

Idk, haven't been on freeways, but stopped by Home Depot today for some plumbing parts (curbside pickup) and I've never seen it so busy in my entire life.

fwiw, my wife's uncle is now on a ventilator due to covid, and he has traced it back to going to our local Home Depot. He also believed it was "blown out of proportion". ymmv.

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