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July 28, 2015

The Role of Government in Innovation, Technology & Entrepreneurship

As technology increasingly outpaces government’s ability to regulate innovation it creates a fluid set of unintended consequences.  A product or services launches before any due diligence on safety or adverse impact has been completed. This leaves consumers and governments to figure out how best to use it. After all, it isn’t the job of an entrepreneur to address marketplace fairness. Their job is to create a product that’s in need.

When this happens, government becomes reactionary with regulation and oversight. There’s no one-size fits all approach because there isn’t one that exists. Innovative technology isn’t created with the intent to respect geography or tradition. Its design is to create a product or service to fill a need.

Uber X’s well documented legal status in PA but not in Philadelphia is a great example. At the very least there should be uniform regulation across an entire state, not based on county.

The Pennsylvania Utility Commission regulates taxicabs and limousines in PA. Except for in Philly where the Philadelphia Parking Authority has authority over taxis and limos. This cross county inconsistency has led to an unsurprising amount of confusion. That has created a situation where we have this shadowy, nebulous, wink-wink enterprise that everyone knows about and uses because seriously, like what’s the big deal?

Currently pending in the PA House is HB 1065. This bill would allow rideshare programs like Uber X & Lyft to operate in all 67 counties without burdensome regulations that unfairly attempt to place taxicab rules on app-based ride sharing technology.  What it means in simple terms – less regulation on innovation. Rideshare operators will be legal, licensed and insured. Workers will have rights and consumers will be safe.

Uber X is just one example of on-demand economy technology launches in Philadelphia. Uber X is up to one million rides but yet still illegal. Airbnb is now legal (read taxable) in Philly. There’s the Spot App, which is the private parking version of Airbnb which looks to rent out private parking spots. Monkey App which looks to auction off public parking spots to the highest bidder. The Luxe App looks to connect drivers to valet parkers who after being summoned will park your car and then retrieve it when you’re ready.

The role of government is to provide regulation but mostly to get out of the way so that businesses can thrive.  Admittedly it’s a fine line but that’s why we elect them – to provide vision and direction to solve the hard problems.  Government’s responsibility should be to provide unambiguous, uniform regulation and oversight across the commonwealth for all businesses. It is a win for everyone as it encourages innovation, protects workers and provides safe options for consumers.

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