This article was originally posted on Bloomberg Government.
Bloomberg Government regularly publishes insights, opinions and best practices from our community of senior leaders and decision makers. This column is written by Tim Woodbury, Director of Government Relations for Accela.
“Move fast and break things.” Silicon Valley’s approach to innovation coined by Mark Zuckerberg is disrupting industries once thought untouchable. In less than a decade, Uber and Lyft have upended the taxi industry; Airbnb has turned people’s homes into an attractive alternative to hotels; and drones are circling our skies in record numbers. These are just a few of the many technology-driven innovations promising to improve our lives and making the hearts of investors flutter. Yet, these market disrupters are also on a collision course with government regulators.
Debates on how best to regulate these innovations are raging from the largest cities to the smallest towns. Even, the bastion of disruption, San Francisco, the home of Airbnb and Uber, has had no shortage of issues trying to figure out how to supervise the services. Other tech hubs like New York City, Austin, and Venice Beach, all have debates ongoing about the new products and services that are spilling from tech campuses directly into their neighborhoods, streets and skies.
With every innovation, a new regulatory issue arises that tests the status quo within the government departments tasked with protecting our health and safety. Who’s checking the criminal background of your Uber driver? Is the Airbnb you’re renting in compliance with the city’s building and fire codes? Who’s making sure that drone your neighbor got for Christmas doesn’t interfere with the plane you are flying on?
Is Self-Regulation a Viable Option?
Many in Silicon Valley would have you believe that these new inventions can self-regulate without government intervention. But consider the examples above; the public takes for granted the relative safety of taking a cab or flying on a plane, a luxury that is only due to the efforts of government regulators quietly serving in the background. Innovation in how we deliver these goods and services does not diminish the need for an effective regulatory framework.
But is government up to the challenge of overseeing these emerging technologies? Do they have the right strategies and tools to effectively engage a deluge of citizen entrepreneurs?
Think of the difference between regulating one hotel, versus 400 Airbnb hosts. Or the Federal Aviation Administration (FAA), accustomed to monitoring airlines and professional pilots, now tasked with overseeing tens of thousands of drones flown by hobbyists and professional photographers. Technology is breaking down the barriers to entry in traditionally regulated activities as well as creating entirely new endeavors that call for some form of government oversight (e.g., the artificial intelligence at the heart of self-driving vehicles).
The future of regulation calls for strategies and tools that similarly break down barriers between the government and citizens. When Uber drivers and Airbnb hosts are onboarded in minutes through slick online platforms, elected officials can’t expect to achieve effective compliance with these same people through redundant paper forms and long lines at City Hall. But unfortunately, that’s still the norm, and not surprisingly, many people fail to comply.
There is another way. If government wants to effectively regulate these emerging industries, they need to take a lesson out of Silicon Valley’s playbook.
“Meet the People Where They Are”
You only need to look to the Mile High City to see what’s possible. Denver Mayor Michael Hancock recently told his constituents, “I love you, I think you’re good-looking, but I don’t want to see you downtown. You should not have to come downtown to file your sales taxes with the city government or to renew your driver’s license tags by coming down and standing in line for two hours. You can do that online now…You have to meet the people where they are.”
For Denver, as in many cities around the world, the popularity of short term home rental platforms has spiked in recent years. These lodging disrupters have produced heated debates, outright bans, and lawsuits around the world. In Denver, City leaders took another tact—they worked collaboratively with concerned citizens and short term rental platforms like Airbnb to craft rules and processes that focused on outcomes they look to achieve.
The City created an easy-to-use online platform that lets short term rental hosts quickly register their property without ever having to leave their home. Since the first-of-its-kind online portal was launched six months ago, nearly half of all short term rental hosts in Denver have already registered. Most other cities that have passed short term rental ordinances are still relying on paper forms and in-person visits to City Hall, and predictably, their compliance rates are drastically lower than Denver’s.
Another example of regulatory innovation can be seen in Stockton, California. The national average for installing a rooftop solar panel is a plodding 30 days—mostly due to delays in government permitting and inspection processes. These delays add substantial cost to the purchase price of rooftop solar in America. Stockton saw that they could do better for their citizens and the solar installers working in their community. They worked with technology partners, solar installers and their local utility to forge a more modern regulatory process.
In 2016, Stockton became the first city in the U.S. to allow the installation of a rooftop solar system in less than one day. From permit application and review, to installation of the solar panels and inspection, to coordination with the utility and ultimately flipping the switch to bring the system online. If copied nationwide, Stockton’s model could drastically reduce the cost of rooftop solar in America.
As government looks to evolve as regulators, it should both reflect on its regulatory experience and combine it with the same out of the box thinking that is producing the very disruptions they seek to make safe and sustainable. Working with emerging industries, like Denver and Stockton to “meet citizens where they are” by utilizing the same technology that these disrupters embrace will ensure regulators are able to do their jobs and we get to keep using these new inventions.
The opinions presented in this column are those of the author and do not necessarily reflect the opinions of Bloomberg Government or Bloomberg LP.