Bandhu

Climate change and failing rural economies are driving millions of people to migrate to cities for better opportunities. But the process of choosing to migrate remains full of blind turns, where migrants are beholden to brokers to connect them with urban jobs and housing. Given their vulnerable status, and lack of choices, migrants typically feel compelled to accept opportunities that are often exploitative.   

Bandhu allows workers to make safer and better informed decisions when choosing to migrate to cities. Our technology platform creates three-way matches between low/moderate-skill workers, employers looking to hire them, and owners/occupants offering informal affordable housing on rent--while incorporating existing middlemen. Though aimed at migrant workers, Bandhu provides transparency to all these stakeholders, minimizing the blind turns typically faced in such decision-making.

Our solution could help millions of Bangladeshis, 67% of whom are rural and attempting to rapidly urbanize for better livelihoods, in a 'tiger' economy.

150 million Indians undergo a distress-driven, cyclical migration process every year, wherein one wrong step for a migrant can have serious lifelong consequences. These migrations are exacerbated by factors including climate change-induced floods, crop failure and subsequent lack of rural economic opportunities.

Such patterns are also acute in Bangladesh, where 67% of 165 million people live in rural areas. For example, in northwest Bangladesh, 36% of poor households migrate annually during the 'monga' (lean) period.* Rural workers often rush to cities out of economic desperation. Consequently, they are neither full-time residents of a city nor of a village, but constantly in transition. Urban centers fail to provide inclusive environments for such a dynamic group, and workers often find themselves in exploitative arrangements. The only connection between rural and urban economies are the middlemen, who capitalize on their rural social ties and urban economic connections--often capturing 25-40% of the value in the migration process. There exist extensive information asymmetries between rural and urban networks.

*(Khandker, 2010)

We primarily serve low-wage migrants/prospective migrants between the ages of 18 to 40. Many take up unskilled or semi-skilled construction labor work. They are prone to exploitation by employers and middlemen, and often the untenable costs of urban living force them to go back to their villages. 

We performed over 160 stakeholder interviews alongside having team members experienced in India’s construction industry.  For the past four months, we onboarded 100 workers with the help of a local NGO (Aasmaan). They have worked in informal settlements in Ahmedabad, India for the past decade. We are running participatory pre-pilots with these communities; they respond to mock-ups of our app, ask questions, voice concerns, and provide feedback. We are incorporating their input and onboarding workers, whose profiles will be pre-loaded into a market-ready prototype by December 2019. 

This solution establishes a system of trust for these workers, enabling them to make better-informed livelihood decisions. We address the factors perpetuating exploitation through a two-pronged approach: 1) by improving information availability, giving this underserved population the tools to become more economically resilient in the face of constant change; and 2) by altering the incentives for the middleman, to produce a more inclusive system. 

Our mobile phone platform, Bandhu, maximizes transparency in the migration process so that low-income migrants can make life decisions with assurance. It does so by creating matches between employers looking for low/moderate-skill workers, potential migrants/workers, and owners/occupants offering informal affordable housing on rent. By providing potential migrants with competing offers of bundled employment and housing—for similar net wages—Bandhu minimizes risks for the worker while still leaving the final choice up to him/her, based on personal preferences like take-home pay, distance traveled from home to work, and other factors. 

Bandhu takes advantage of India’s high rates of mobile phone coverage, one of the lowest worldwide data rates, and rapidly-increasing smartphone penetration. 300 million Indians have smartphones, and 70% of rural households have mobile phone access. Unlike the West, where a mobile phone is a personal asset, mobile phones in rural India are commonly considered family or community assets, increasing our potential to reach more users.

This three-way match system will require a matching algorithm that accounts for individual worker needs. This algorithm will suggest possible job-housing combinations given a worker’s skills, schedule, and personal preferences. These preferences include a worker’s expected wages, willingness to travel, proximity of housing to public schools for workers with families, neighborhood safety (using proxies like level of street-lighting visible through satellite imagery), and food affordability (i.e. presence of street vendors apparent through resources such as Google Street View). For example, it would allow a migrating family to choose from a set of neighborhood options that are safe for children, like areas with “eyes on the street” and within walking distance to public schools. 

As more users join our app, we will have a larger pool of data to analyze using machine-learning and recommendation algorithms, allowing us to make better suggestions based on the preferences, behavior, and psychological needs of workers from different backgrounds. For example, studies have shown that having reduced opportunities to speak in your mother tongue can have adverse impacts on the mental health of migrant workers. 

Our platform will also integrate widely-used mobile payment systems and user authentication methods held by the government and by NGOs that we intend to partner with. In order to boost incomes, we plan to provide skills training for workers who consistently receive low ratings from employers, through our relations with these partner NGOs. 

While global narratives postulate utopian smart cities, they ignore the need for “just” transitions from rural distress to these imagined utopias. We focus on designing just and inclusive transitions: 

1. We see low-wage seasonal migrants as having dynamic, rather than fixed, characteristics. This contrasts with the approach of most public- and private-sector entities, which attribute fixed characteristics to these populations and disregard the highly dynamic and transitory nature of these workers’ lives. Our approach creates monetary value from such frequent and sustained movements (transactions), and incidentally collects data to enable further insights into migrant needs. This previously unrecorded data is essential for making improved local and large-scale public policy decisions related to infrastructure development (i.e., transportation, temporary housing, etc). 

• Unlike aggregator platforms that emphasize “disruption” as innovation, we believe in “inclusion” of existing actors and reorienting their incentives. We leverage existing social capital into financial capital that can be more equitably redistributed. This is done through two pivotal actors: middlemen, and local street vendors. 
  • Middlemen enjoy the trust of workers, and their network translates to powerful social capital. While maintaining these pivotal connectors between rural and urban spheres, we reward them commensurate to their capacity-building for each worker they refer onto the platform. 
  • Local tea and street vendors occupy a trusted position on the ground, typically also providing lines of credit for local workers and knowing which workers are most reliable. Thus, these partners are invaluable to us as a bridge to on-boarding in their communities.

[Evidence: Rushil’s MIT Thesis results]

Short-Term Outcomes (18 months) [Evidenced by our field surveys /analyses]:

• Workers find better and stable jobs, secure rental housing and consequent immediate improvement in family income
• Retaining social capital: Stability of being in one place with an ability to travel to native villages for important community/family events, at short notice.
• Reduced inefficiencies for middlemen/employers/landlords: more reliable workers/tenants

Medium-Term Outcomes (36 to 60 months) [Evidence - our data collection/analyses on the tradeoffs between housing, healthcare emergencies, children’s education]:

• Choosing to move to cities offering better wage differential and minimal loss of social capital
• Enough money to have their children complete schooling, rather than disrupted education alternating between cities and villages
• Better access to healthcare in urban centres

Long-Term Outcomes (10 years) [Evidence - Interviews, academic research]:

• Exponential inter-generational upward mobility: often through formal-sector jobs that provide greater financial inclusion, access to housing mortgages, etc. 
• Security of housing tenure and asset-building through ownership, enabled through access to home loans /mortgages
• More inclusive cities from a migrant’s perspective; as current research shows education/financial inclusion leads to stable housing and greater urban socioeconomic inclusion.
• Less pressure and infrastructure/waste management burden on cities which are already at carrying capacity, leading to more equitable and healthy regional agglomerations.

We have onboarded 100 workers to our platform, and anticipate onboarding 40 employers by December 2019.

One year from now, our system of referrals and our network will have brought 15,000 people onto our platform, including 720 employers. Within this period, we hope to begin operations in Bangladesh as well.

In five years, we anticipate a user base of 2.5 million—over 50% of the 4 million potential customers in the Ahmedabad-Mumbai corridor, our area of focus for the MVP. In Bangladesh, we hope to start serving at least 200,000 people.

We are currently partnering with an NGO that serves approximately 1,000 individuals from low-income communities, representing a strong network to initially draw from. We are also collaborating with another NGO which serves about 200,000 workers across three cities in India.

Our solution is sustainable and inclusive in its approach to preserving but modifying the existing structure of the informal labor market. 

We are starting with a pilot based on Ahmedabad, focusing on building only the employer side of our platform for only construction workers who are hired from labor nakas (daily wage markets). Their cost of trying our app is very low compared to their current activities waiting at the labor squares every day. September to December 2019 is dedicated to developing and deploying our platform, and proving that it can successfully connect workers and employers (directly and through middlemen) in this initial phase. By December, we will have a daily database of worker-employer connections, the quality of those connections, and stakeholder concerns. Immediately thereafter, we will roll out the housing side, and begin expanding out from labor nakas in Ahmedabad to other areas of the city and additional professions (manufacturing, hospitality, delivery services, etc). 

We also intend to scale our services through contacts with local NGOs, in Gujarat and elsewhere. We have already identified NGOs that help train migrant workers and give them unique ID cards that validate their identities and roles, and expect to partner with these NGOs to scale up our business and securely store worker data.  In the next five years, we intend to further develop our relationships with these groups, make the housing side more robust, attract more investors, and expand to other regions of India and Bangladesh.

Financial barriers: We’re have limited resources at this early stage and are currently trying to garner more funding.

Legal barriers: One challenge we must address is the issue of ensuring quality and safety—not just day-to-day worker delinquency, but also that users are held accountable using the app as intended. Such an informal market has already attracted shady business practices.

Cultural/linguistic barriers: Each labor market in each city is slightly different, and each state in India has its own primary languages.

There is a different word for each profession and what is expected in terms of work ethic. 

Market barriers: Currently no one’s in this market space, but we anticipate competition as soon as we have a full market release of our product. 

Financial barrier mitigation: We are constantly expanding our network and presenting to grant-making agencies and investors.

Legal barrier mitigation: We are in the process of creating a strong support team that ensures individuals with less power on the platform are free to rate their services freely without fear of repercussions. Our efforts at building strong local partnerships with organizations that are trusted within the community will also help mitigate this.

Cultural/linguistic barrier mitigation: We will work with actors who understand local languages and cultural norms and have trust/social capital in the communities we intend to serve.

Market barrier mitigation: We will use loyalty and rewards strategies to keep users engaged with our app and out-scale the competition (i.e. become so big that we are the main trusted service in this space). We will also use our marketing and branding to introduce Bandhu to the household vernacular, and control how and when we use social media to build our brand and following. Social media increases the potential for competition, so we would build this capability only once the technology solution and user base is well-established. The key strategy is to incorporate the middlemen who possess high social capital rather than trying to disrupt them.

67% of 167 million Bangladeshis are still rural, and gradually moving heavily towards the service sector and manufacturing, with a GDP growth rate well over 7%. Millions of people are expected to urbanize, and have clear urban focal points like Dhaka. Thus, there is an opportunity not just to benefit from the agglomeration effects, but also to offset the ill effects of rapid migration on potentially over-burdened infrastructure and land in the megalopolis of Dhaka.

We seek to partner with key industry and real estate players to lock in the demand side of the labor market. We would also explore the viability of new product types of affordable housing such as temporary migrant hostels.

To further cement the feasibility of bundling housing and employment, we would look to partner with NGOs and community organizations to get small landlords to make housing offerings available in low income neighborhoods.

Labor rights NGOs would also help connect with and onboard middlemen and workers to lock in the supply side of labor.

With a few initial partners ready to take part in the first pilot, we will adopt a “learn as we go” model. Once there is convincing adoption, we would look to start charging 8-10% commission from landlords and employers. Middlemen would be given a share of our revenue to bring and retain workers on the platform.

We see Bangladesh as a 16-20 million-user market—approximately a $4 billion-sized total addressable market in this specific sector.

We have two full-time founders, two part-time co-founders, and a field operations team including one full-time coordinator and five full-time interns/employees based in India.

Our co-founders have each completed fieldwork in India for their theses, interviewing 160 workers and employers in various informal-sector capacities.

Rushil brings over four years of experience working on construction sites alongside migrant workers (Bandhu’s potential customers). As such, he understands the experiences of low-wage migrants in this sector. In other roles, Rushil has consulted for governments on such topics as slum redevelopment, affordable housing policy, and pro-bono work for postwar development initiatives in Sri Lanka, and with developers on urban densification in Zambia. As a Fulbright Fellow at MIT, he focused on real estate, housing, and public infrastructure ecologies, traveling to Peru and Mexico on client-based projects. 

Jacob brings a high-level strategic approach to Bandhu from five years of experience as a management consultant, specializing in big data analytics and value chain analysis. He has worked alongside  members of a dalit community outside Lucknow on a construction project. At MIT, he studied opportunities for economic resiliency  and received two travel grants to study solutions for Mumbai’s informal waste management sector, writing his thesis on possible futures for Mumbai’s recycling industry. His interests focus on urban information systems in transportation and waste management, visualizing large urban data sets, and applying technology solutions to real-world problems. 

Viral is leading field operations in Ahmedabad, India, and brings over ten years’ experience of working with these communities through the nonprofit he co-founded.

Darsh, is pursuing a Phd in computer science at MIT, with a focus on Artificial Intelligence - Natural Language Processing.

We are partnering with the Ahmedabad, India-based Aasmaan NGO, an organization which has been serving over 1000 low-income individuals in the slum neighborhoods of Ahmedabad for the past ten years. They are a key implementation partner for us; they are currently spearheading our pre-pilot in Ahmedabad, gathering user feedback on our idea using field surveys and in-person app testing.

Aajeevika Bureau will also be supporting us in testing/piloting during the migration cycle beginning in winter 2019. They would provide access to 150,000 to 200,000 workers registered with the organization, as well support through their presence in labor squares across three cities in India. They would also help us organize public gatherings to demonstrate the app.

Our business model creates a three-way match between workers, employers, and landlords on the same platform while also incorporating the middlemen. 

Workers get access to the most optimal employment/housing bundle and do not have to pay anything for these services. They get access to secure housing tenure and relief from predatory commissions/brokerages. 

Employers in the medium/small-enterprise sector get access to skilled and better quality workers, optimal to their requirements, with lower attrition rates, and still having flexibility to suit their variable project demands. In our platform, they pay a 10% service fee on a completely transparent system, as compared to the 25% they pay currently. 

Landlords get access to a wider market, pay much-reduced brokerage fees, and have assured tenancy matching several social criteria. 

Middlemen, who currently must take high risks and hustle to provide workers to employers, find an easier way to get assured commissions with reduced risk on Bandhu. While our platform reduces their commission per individual transaction, net income for the most trusted middlemen increases as they get access to a much larger market and collect regular income through a revenue-sharing model. By tying their incentives to worker quality and retention/delinquency rates, Bandhu innovatively converts the middlemen’s social capital and networks into a more equitable system that also earns them a more stable income. In the long term, this model will buy them time to diversify from the brokerage business, which is currently at high risk of disruption with India’s expanding tech ecosystem.

The venture would be kept financially sustainable for the first three years with investment capital and grants. We have already received $47,500 in prizes and grants at MIT. We are now looking to raise investment capital and eligible grants for social impact tech innovation. We look to have positive operating profits by year 4.

The service fee/commission received through the platform, as well as revenues from float and micro-lending enabled by the centralized payment processing would help offset operating losses in the first 3 years, and becomes a key revenue source in the long run as the platform scales. Our proformas show certain positive cash flows by year 4.

The Tiger Challenge in Bangladesh is an ideal opportunity for us to advance our work. The connections, publicity/visibility, funding, and most importantly the opportunity to take our project to Bangladesh is the biggest draw of the Tiger Challenge. Bangladesh is witnessing some of the fastest growth rates in the world, driving rapid urbanization. Bangladesh’s shared colonial past within India, culture and language, and dynamicism is an ideal ground to grow our product before expanding to other parts of India and South Asia. Bangladesh has also faced urgent social problems due to climate change and a high influx of refugees. We see the microcosm of Bangladesh as an ideal place to provide insights into the complexities of urbanization given these challenges, before we expand to other developing markets. We personally feel that Bangladesh is ideally suited to our solution given these pressing challenges but high potential for success.

We would like to create strategic partnerships across worker, employer, and community sides.

Sectors of technology, labor, industry/manufacturing, real estate and multi-laterals/NGOs/ government would be key. We are already in conversation with certain private-sector initiatives, with a track record in Bangladesh, to explore possibilities for alignments/collaborations.

Some specific organizations that we envision partnering with include BRAC, Bangladesh Labour Foundation (BLF), and those in the real estate space such as BTI and Concord Group.

All of the above would be strategic partnerships where Bandhu takes the role of service provider to such organizations. These groups would see it as symbiotic partnerhship while also seeing this project as a social impact/CSR avenue.

The data generated would be very useful to governments and multi-laterals like World Bank/IFC etc. to understand and plan for migration driven urbanization. Data-driven policymaking and infrastructure development would be greatly enriched with our dynamic but anonymized data feeds.

Finally, working with key influencers/trailblazers in the architecture/built environment space include Marina Tabassum and Saif Ul Haque could add tremendous value to how industry and academia perceive the intervention.