Posted by: Pradeep | May 1, 2008

Most viable business – Schools

May a times I think what business can keep earning forever, the answers are consumer items, construction, education. While construction and consumer items can see change in demand, education stands prominent and sees only upward trend. Human being would never stop having babies so where is the question of education business seeing reverse trend. On the top there is no established concept like home schooling.

This kind of sustainable demand in education sector has created big business houses across the globe. Refering to UAE, GEMS Group is one of the largest education sector operator with 20+ schools in Dubai alone. Monopolistic situations give rise to arrogant tactics in business and unfortunately education sector is not spared of it. GEMS Group has been making money and there is no second thought on accepting that in any business including education sector (as such it has anyway become business).

The problem arises when social responsibility are non-existent in the society in general and government does little to curb the unfair practices for making money. Recently GEMS Group decided to “outsource” the student transportation to “third party” so that the “third party” can charge any fees when GEMS Group was denied the unfair hike asked by them by regulatory body. It raises many questions like

  1. Who is the third party? (in all probability it would be some company which would share “large exploited money from helpless parents” with GEMS management)
  2. What would happen with the available logistics infrastructure like buses, drivers and conductors? (in all probability the third party would have it on their name)
  3. Does the transportation cost (with rise in fuel cost) change to same level as rise in fuel cost? Never! As such transportation cost consists of vehicle cost, driver and conductor costs apart from fuel cost. When other three are not changing significantly, transportation cost would change by only minor amount.
  4. Who would be responsible for child safety? As recent as last week one KG student in Abu Dhabi failed to reach his class from the bus and later was found dead in the bus as he remained in locked bus. At least with school owned transportation system we can expect some kind of security levels. Outsourcing to third party would never bring same level of safety as for transportation company it is nothing but business of transportation.
  5. What kind of service in terms of no. of children packed in buses would be there? For any private operator they would try to make it nothing but jam packed bus.

While GEMS group is vehemently claiming that they are losing millions in transportation, I wonder where from they got AED 100m to donate last year to Dubai Cares? To note here they were the largest doner in terms of value even when compared to state owned organizations like Emirates, Emirates Post etc. which make officially in Billions of AED each year.

While making profit in business is acceptable, becoming greedy is a big problem. Is the GEMS group management hearing this…


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