Capitol Alert Insider Edition

Insider Access - Exclusive content for the Insider Edition iPad and iPhone apps

Note: Capitol Alert Insider Edition stories are for the exlusive use of subscribers of the service. You can subscribe with your iPhone or iPad in the App Store.
June 15, 2014
Viewpoints: Don't stifle innovation by over-regulating Uber

Lyft.JPG(June 15 - By Gavin Newsom, Special to The Bee)

As lieutenant governor, my main goal is to promote economic growth and job security. From aerospace engineering and the Internet revolution to Hollywood and biotech, our state has a history of pioneering new ideas and creating businesses around them. That is why it is so important to embrace new technologies and continue to lead the nation by creating flexible frameworks that support our entrepreneurial spirit.

One such framework is being built right now around technologies that are revolutionizing transportation in our cities. Start-up companies such as Uber, Lyft, Sidecar and Wingz are changing the industry by leveraging the share economy and smartphone technology to increase consumer choice.

Dubbed "transportation network companies" by the California Public Utilities Commission, they are the subject of much debate in our city halls and now in our state Capitol. Companies such as Uber will play a key role in the next economy as they represent the entrepreneurs who will drive growth in key areas such as transportation and infrastructure. As state officials, we must work just as hard as the entrepreneurs to promote and support innovation in every sector of our economy.

Millions of consumers are taking advantage of this new technology, and the benefits accruing to communities around the country are clear. Transportation options are being expanded; low-range pricing has opened access; and many unemployed Californians have been able to make money as drivers for one of these companies. As these start-ups modernize the way we travel, it is up to lawmakers to create a regulatory framework that protects consumers while ensuring there is adequate flexibility for innovative and creative transportation solutions.

That is why I support the PUC's decision last year to create a framework for TNC permits. It includes common-sense requirements such as meeting safety standards and carrying commercial insurance when a driver is with a rider. The framework was constructed to recognize and support the innovation that companies have developed rather than restrict it. Unfortunately, the progress to support such innovation halted last week with the commission's decision to make the process for obtaining these TNC permits extremely onerous, thereby creating unnecessary barriers to growth and innovation in this industry.

Additionally, legislators in Sacramento are discussing policy issues related to TNCs, and their decisions will have major impacts on these new industries. While I agree that any legislative action must take into account the well-being of passengers, drivers and the public, I would argue that legislators should slow the hand of heavy regulation for fear of crushing the innovative spirit that is the hallmark of California's economic engine.

There is no reason that the Legislature cannot lead the nation in responding to TNCs in a balanced and sensible manner. While it isn't always easy to transition out of old regulatory models, government can demonstrate real leadership and make a difference by supporting these emerging technologies.

We must resist the urge to go backward by creating laws that further entrench the status quo and stifle innovation and consumer choice. As transportation services evolve, so should our transportation regulatory structure. It is time to embrace, improve and expand this new era of transportation.

We are well on our way to healing from the most significant economic downturn in recent history, but we must continue to make sound policy decisions that allow Californians to lead the state toward further economic prosperity and continued job growth. We need to encourage innovation and entrepreneurship, and we need to stand behind California companies that are pushing for positive change in our communities.

Gavin Newsom is lieutenant governor of California and a former mayor of San Francisco.