Reinvent Podcast

Tim O’Reilly, founder and CEO of O’Reilly Media, believes we should rethink the world using today’s technology. “Let’s stop optimizing for the short-term. Let’s start optimizing for the long-term, and think about how to make the society we want,” O’Reilly says. O’Reilly acknowledges that technology is destroying jobs today, but only because “we’ve built incentives into our economy to encourage those choices.” O’Reilly believes that an economy not optimized for the short-term would place much less importance on stock performance, and would pay workers more. He refers to the current economy as the WTF economy (also the name of his Medium publication) because he sees WTF as an expression of both wonder and dismay, and in today’s economy, O’Reilly says, we see both.

Laura Murphy, the former head of the American Civil Liberties Union’s DC legislative office, recently conducted a 90-day review of discrimination on Airbnb (read the report here). Murphy says that she believes it’s in the enlightened self-interest of not only Airbnb, but all sharing economy companies, to make a sustained effort to serve entire communities, not just an elite market share. All companies, Murphy said, should be prepared for complaints of discrimination. “To have a company stick its head in the sand and say there’s not a problem out there is naive and also dangerous…You don’t know where discrimination is going to manifest itself, because it’s so much a part of our culture in the United States. Given that, you can’t just do one thing and expect it to solve discrimination for all time.”

Annise Parker, the mayor of Houston, Texas, from 2010 until January 2016, is well-accustomed to navigating the often murky waters of sharing economy regulation. Parker’s first experience with the sharing economy was using Zipcar’s technology to manage Houston’s fleet of light-duty vehicles. Later in her tenure as mayor, Parker worked to create a regulatory level playing field for the taxi industry and ride-sharing apps by lessening regulations on taxis and applying what she viewed as necessary regulations to the apps. “You can’t take a heavily regulated industry and de-regulate it overnight,” Parker said.

Francesco Rutelli, former Mayor of Rome and a member of Airbnb’s Mayoral Advisory Board, wants tourists visiting Italy to take full advantage of the wealth of culture that Italy has to offer. Rutelli believes that Airbnb is part of the answer to the question of how to provide tourists with personalized experiences. Rutelli also views home-sharing as a more sustainable alternative to mass tourism.

Stephen Yarwood, the former Lord Mayor of Adelaide, Australia, is a firm believer in our digital future. “I’ve always been convinced that technology was going to not only drive change, but create a new operating system for cities,” said Yarwood. Now Yarwood runs his own consultancy firm, called city 2050, and serves on Airbnb’s Mayoral Advisory Board, in addition to renting out his own home on Airbnb. He warns city officials against over-regulating particular companies in the sharing economy, for fear of undermining the trajectory of the entire sharing economy. “I think people want solutions in their lives,” Yarwood says, “but they don’t want to be told what to do.” Yarwood pointed to the example of dairy farmers in Australia and New Zealand, who are struggling to make ends meet as dairy prices drop. These farmers can now supplement their incomes by renting rooms on their dairy farms to locals and tourists interested in learning more about the industry in a personalized way.

Arun Sundararajan, a professor at NYU’s Stern School of Business and author of the recent book The Sharing Economy, believes crowd-based capitalism could replace managerial capitalism in the next 10-20 years. Sundararajan believes crowd-based capitalism is an inherently superior model, one that uses resources more efficiently, which tends to result in increased economic productivity. Crowd-based capitalism, according to Sundararajan, also tends to increase the variety, diversity, and sometimes quality of goods, which results in higher levels of consumption. Economists don’t agree on much, Sundararajan says, but “if there are two things we agree about, one is that productivity growth leads to economic growth, and the other is that increases in consumption lead to economic growth.” Sundararajan’s research also indicates that crowd-based capitalism will have an equalizing effect on the economy by beginning to de-centralize the means of production.

Yochai Benkler, Berkman Professor of Entrepreneurial Legal Studies at Harvard Law School, first explored the potential of the modern sharing economy in a Yale Law Journal article in 2004, and is credited as one of the first people to articulate the concept. More than a decade later, Benkler spoke about how our reality measures up to his initial conception. In this interview, he outlined the transition of sharing information through social networks to sharing within a market framework. “It takes time to be a decent sharer,” Benkler said. “It takes emotional load. Sometimes it’s just easier to pay, depending on what you’re trying to do.” Benkler prefers the term “on-demand economy” for those companies that incorporate a market framework.

Gary Shapiro, president and CEO of the Consumer Technology Association (CTA), believes that while regulation isn’t necessarily bad, it shouldn’t be over-intrusive. The Disruptive Innovation Council, a subset of the CTA, does market research and lobbies governments in the hopes of promoting the idea that innovation is great for society. The CTA also rates every state in the U.S. based on how innovation-friendly it is, evaluating metrics like broadband deployment, STEM graduates, taxation systems, flexible workforce rules, and attitudes towards sharing economy companies. Shapiro believes that the attitudes of legislators towards new technology often depend on their personal familiarity with the product. If they haven’t used it themselves, or something close to it, Shapiro says, they don’t know it. Shapiro generally supports getting products to market first so that consumers can understand them before applying too much regulation.

April Rinne, Sharing economy expert and advisor, has traveled to almost 100 countries and worked in around 50 of them. “None define sharing the same way,” Rinne says, though she adds that the most general definition of the sharing economy involves sharing under-utilized assets, spaces, and skills. Rinne believes that there’s been a global pendulum shift in the last 18 months, one that led to an increased awareness—if not quite increased expertise—of the sharing economy among policymakers. And while the United States, and the Bay Area in particular, has maintained its role as a leader in technological innovation, it lags behind when it comes to policy innovation. Rinne discussed global policy innovations related to the sharing economy, like the UK’s sharing economy trade association, and Seoul’s Sharing City government department.

Sunil Paul co-founded Sidecar in 2011 on a novel premise—that technology could allow anyone to become a driver and accept money for that ride. According to Paul, Sidecar, which was purchased by General Motors in early 2016, pioneered the term “ride sharing”. Paul, who views IT as a “solvent for transaction costs”, discussed his early battles regulating ride sharing in California. “In the beginning, you’re operating in a gray area,” Paul said, “but it’s more or less inevitable that there’s going to be some level of regulation.” Paul supports regulation on the state level, because he sees municipal regulation as too scattered and disparate. He encourages policymakers to look out for the public interest, and believes that promoting innovation is part of that public interest. Paul laid out three potential pathways for disruptive companies facing resistance from incumbent companies or industries: 1) Start so small and silly that you’ll be ignored, 2) Co-opt the interests of the incumbent, and 3) Challenge the incumbent head-on. Sometimes, Paul says, there’s no substitute for saying that you’re the better way.