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2013 CES, Transportation Research Board Meeting: Questions and Making Lemonade

January 12, 2013

Recent events and the upcoming TRB meeting have raised some questions which may certainly influence the growth of get2kno.  Let’s start with this question:  How can regulatory agencies enable innovators as much as protecting established firms? Seriously- if we can’t get to this point, America stands to lose a key innovation leadership role in the global economy.  One need only look at the shared economy. On the East Coast, the 272 year old hotel industry in New York is successfully convincing risk averse local regulators that individuals don’t have the right to allow “guests” to stay in their apartments if money changes hands. Citizens are being threatened with fines as high as $40K and evictions. In this economy, why wouldn’t a city want to protect a new business model that helps citizens avoid the nightmare of eviction or foreclosure? Why would local regulators NOT want to allow every entry point conceivable for additional tourism dollars and full occupancy of all residential units? College graduates face a 50%+ unemployment rate and record high tuitions.  Why not embrace a model that encourages these bright young minds to stay in your city?  Aren’t these transactions between private parties, everyone knowing the risks and benefits? I can spend 3 nights in an apartment for less than a single night in a New York Hotel, and have a wonderful social experience. Wait, could that be the real issue? No, I’m sure it’s just about public safety.

On the West Coast, Ca state regulators are responding to “public safety questions” raised by the Taxi Industry re RideShare companies. In this case, the Taxi industry spokespersons have flatly stated, these new models of shared transportation have an “unfair advantage” when it comes to regulatory requirements. I guess I missed the quote about public safety. Don’t underestimate the importance of this statement: Is “fairness” the most important decision factor when consumers clearly adopt an innovative business model that: reduces urban congestion, reduces accidents, lowers local emissions, helps prevent credit defaults, provides transportation to JOBS, makes a city more appealing to live within? I am not saying some questions being raised are invalid. But,  why do these issues only seem to emerge for innovators tapping viral growth & disrupting industries who have had a great 100+ year run? More significantly, why do regulatory bodies default towards protecting the established and not towards enabling the new and disruptive? I’ll even suggest that regulatory agencies who DON’T embrace disruptors are helping established industry leaders to the corporate version of a Hospice, they just don’t know it.

In closing, these debates often lead to insurance related questions, “Isn’t there an insurance solution? If, so why is insurance so d&$#@d expensive?” Look, I don’t mean to sound like the defender of the insurance industry. That said, the stone cold reality is a new insurance product, which in America is an invitation for numerous lawsuits, based on a new business model is extremely costly.  That new product, has to survive “filing” with fifty individual state insurance Commissioners!  What is the incentive for insurance companies to adopt innovators when the product approval process may require tens of $M, and three to five years? Consider this: by the time that new product is approved at a national scale, it may be irrelevant under the current system.  The Insurance Commissioners could be a huge influence in favor of innovation by initiating the dialogue and establishing uniform fast-track approval processes for products experiencing viral growth. Viral growth is the clearest proof of consumer demand, voting consumer demand.

If 100 year old companies, with $Billion revenue streams truly want to remain leaders when somebody comes along & changes the world, wouldn’t one avenue to success be a collaborative approach with regulators to embrace that which consumers are demanding ?

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