Capitol Alert

Viewpoints: Don’t strangle California’s skyrocketing sharing economy

‘Technology is not neutral,” wrote the French philosopher Jacques Ellul. “It has both positive and negative effects.” As the sharing economy skyrockets in popularity, giving rise to companies such as Airbnb, Lyft, Uber and others we have yet to hear of, Ellul’s words bear remembering.

The wisdom of his observation was evident in the 1980s, when the Internet was in its infancy. Few then could grasp the tremendous commercial potential of the quasi-federal network of interconnected computers that emerged from government and university labs. As the Internet’s commercial power became apparent in the 1990s, some viewed it as a threat to traditional commerce and pushed to tax and regulate it.

But for the most part, California has taken a different tack, working through initiatives such as the California Emerging Technology Fund to provide more connectivity and access to new opportunities, rather than erecting barriers to the innovation that has indisputably brought so many jobs and opportunities to our state.

Enabled by apps and the Internet, the new sharing economy – in which people can safely and easily share rides, housing and just about any other service you can imagine – is creating new opportunities for thousands of Californians and helping to drive our recovery from the Great Recession. Whether it is food, shelter or transportation, people are increasingly choosing to spend their money with their neighbors, rather than with distant corporations.

The new economic model is less about Wall Street and more about Main Street. Sharing has helped homeowners who, after they lost their jobs, found a safety net to sustain their incomes and keep their homes. Seniors on fixed incomes have another way to stretch their Social Security checks. And consumers have more options to get a safe, convenient ride across town.

Industries that used regulated models and economic power at the top now face the disruption caused by an economic reboot that, for the moment at least, has provided real opportunities for many more Californians.

Not surprisingly, existing companies are fighting back, choosing to focus on what they perceive as the “negative” effects of new technology, rather than its benefits. Should we regulate Airbnb as we would hotels? That defeats the purpose, especially considering that people have been renting private homes over the Internet for years through services such as VRBO.

In the case of ridesharing, the reaction of some insurance and taxicab companies has been to try to snuff out the competition by extending the traditional regulations under which they would enjoy continued advantage. But before we treat the newcomers as though they were just taxis festooned with pink mustaches, it’s important to think about what is at stake.

We can’t pick winners and losers – not by imposing taxes or onerous insurance regulations as some legislative proposals would do. That’s a huge cost that accomplishes little to protect consumers. It serves only to unnecessarily burden promising new services.

The good news is that some are working to harness new technologies, rather than squelching them. One insurance company is writing policies for the emerging ridesharing services. New entrants such as Silver Ride, which serves seniors, now provide Internet-enabled, high-quality services pioneered by services like Lyft.

California did not become a world leader by casting its lot with the economic yesterdays. It has succeeded by welcoming people of all backgrounds, surprising us with what is possible when human creativity is unleashed. Our biggest challenge now is to enable all Californians to pursue these new opportunities – not to push them away or maintain an impenetrable crust at the top.