21st Century Economy

ZEV program running out of gas?

By: Kish Rajan

With the clock ticking down to the end of this year’s legislative session, our leaders in Sacramento are debating initiatives that will put more clean cars on the road, boost air quality and innovation, and improve the health of our residents. We must take advantage of this brief window of opportunity to recalibrate the state’s primary mechanism for encouraging electric vehicle adoption – the Zero Emission Vehicle (ZEV) credit system.

California – led by Gov. Jerry Brown and the state air resources board — leads the world in the transition to zero tailpipe emissions, powered by ingenuity not only in the technological realm, but in the policy arena as well. The goal was to bolster the efforts of automotive entrepreneurs to accelerate the deployment of clean cars up and down the state, in an industry notoriously immune to change.

The ZEV credit program as it’s currently structured won’t get us to where we need to be – currently, fewer than four percent of cars sold each model year are electric.

To ignite and accelerate this shift, state policymakers introduced so-called “ZEV credits”, a program to incentivize car companies to devote significant resources toward developing and deploying electric vehicle models that excite drivers.  This is the carrot for the automotive industry to move forward. The intent was to inject vehicles with zero tailpipe emissions into the marketplace; it was smart, creative regulation to bolster innovation and creativity that should be a national model.

These credits were designed to work with companies small and large, legacy and upstart, in order to push the clean car market forward.

Yet, despite the best intentions of state regulators, the ZEV credit program as it’s currently structured won’t get us to where we need to be – currently, fewer than 4 percent of cars sold each model year are electric.

Read the full article here.

Airbnb, Homeaway and a City’s Tortured Path to Drafting Short Term Rental Regs

By: Tim Sparapani

San Francisco’s Board of Supervisors is in the midst of a sometimes hot, sometimes cold dispute that’s currently targeting companies that facilitate short-term housing rentals online, but more broadly is a challenge to the internet platform companies that are propelling San Francisco’s and the nation’s economy. The current dispute stems from the Supervisors’ innocuous sounding ordinance that would force internet platform companies like HomeAway and Airbnb to either require those who offer rentals on their sites to register with the City, or kick the renters off the companies’ sites. If the companies refuse or resist, they face significant fines.

Of course, the City could and should just take direct enforcement actions against the property owners who aren’t complying with local laws but it wants the companies to bear this burden.

The first ordinance passed by Supervisors this spring was swiftly challenged in court, in part because it was an attack that violated a key federal law, Section 230 of the Communications Decency Act, that has helped the Bay Area’s tech innovators generate hundred of billions in economic value for the city, state, and national economy. Just last week, the Supervisors, who were previously resolute that the proposal did not violate federal law, withdrew the ordinance. They requested that the judge assigned to the case stay litigation while they rewrite the ordinance. Early drafts being circulated, however, appear to repeat the original mistake of punishing internet platforms when property owners fail to comply with the City’s registration requirements.

We live in the Internet Age, and more specifically, what I call the Internet Platform Economy. Internet platforms – Google, Facebook, eBay, Etsy, Tumblr, Craigslist, and a thousand others – are especially successful because they facilitate billions of people publishing content online, and with a few exceptions, the internet platform companies cannot be forced to police users’ content. America’s tech companies were empowered to create their online platforms by a provision tucked into a 20-year young federal law, the Communications Decency Act (CDA). With only a few exceptions, courts have ruled repeatedly that Section 230 of the CDA frees companies from liability for facilitating their users’ publication online of speech and content. This federal liability shield is the greatest single reason for the rise of these services because it is what allows internet platform companies to host billions of interactions without being constantly mired in legal disputes.

Read the full article here.

Solar Impulse 2 Shows The Possibilities, And Limitations, Of Movable Solar

By: Mike Montgomery

Anyone who thinks even a little about energy is thinking about renewables. According to REN21, new investments in renewable power and fuel climbed from $45 billion in 2004 to $270 billion a decade later.

That makes it an incredibly appealing market for entrepreneurs. The vast majority of that money has been focused on renewable energy that can go into the grid and power our homes and offices. But the Solar Impulse 2, a long, thin plane that is powered completely through the use of solar panels, has shown another side of renewable energy: solar-powered transportation.

Is the Solar Impulse 2 a breakthrough or a novelty? It may be a little of both.

Bertrand Piccard, one of two Swiss pilots who have been flying the plane in tandem, sees promise in the new technology. “Today we do not have the technology for a [commercial] solar airplane,” he says. “Nevertheless, it will happen.”

But not anytime soon. “It’s not years away, it’s decades,” adds Tom Werner, the CEO and president of SunPower, the company that manufactured the solar cells for the Solar Impulse 2.

Werner explains that when developing solar-powered transportation, you need to consider cost, weight and efficiency. Although the Solar Impulse 2 shows that it’s possible to power a vehicle solely from mounted solar cells, today the challenges for a typical passenger car or commercial airplane far outstrip any benefits. For example, in order to drive 200 miles a day only on solar power, a typical passenger car would need 10 times as many solar cells than would fit onto that car’s roof.

Read the full article here.

Airbnb regulation plan would do more harm than good

By: Mike Montgomery

As housing prices in Los Angeles continue to rise, the affordability crisis has been on the minds of state and local leaders.

It’s true that Los Angeles is among the least affordable rental markets in the country, due in part to the city’s historically low vacancy rates. But it is inaccurate and does a disservice to the actual problem to solely blame short-term rentals for this wide-ranging crisis that has sharpened over the years. Home sharing has been an important tool for middle class families to remain in their homes, in the city they love.

As incomes stagnate and the cost of living essentials like housing and child care rise, making a second unit or home available for rent on a short-term basis has helped thousands of families make ends meet.

And that is exactly what the overwhelming majority of home-share listings are — short-term rentals. Time and again, home-sharing opponents have attempted to misrepresent data to mislead Angelenos.

According to a study released in September 2015, more than 80 percent of home listings in Los Angeles on the home-sharing platform Airbnb are rented fewer than 90 nights a year. In the vast majority of cases, an entire home listing does not represent a unit of housing taken off the market but the home of a regular citizen rented a few weeks out of the year while the owner is on vacation or a work assignment.

The ability to rent out a room or a second unit has allowed many Angelenos to stay in their homes. In a survey of hosts conducted in February, nearly 3,000 said their income from Airbnb has prevented them from losing their homes to foreclosure or eviction.

Businesses throughout the city have enjoyed the benefits of Airbnb travelers. In 2015, the Airbnb community generated an estimated $920 million in economic impact for Los Angeles. These dollars are spread to local businesses and across parts of the city that don’t typically see much tourism activity.

Misleading statistics undermine the arguments of opponents who claim inaccurately that landlords are using home-sharing platforms as an end-run around rent control and other tenant protections.

Read the full article here.

Tech Entrepreneurs Can Learn A Lot About Marketing From Tesla

By: Mike Montgomery

Beating expectations on Wednesday, Tesla Motors TSLA -4.11% reported $1.6 billion in revenue for the first quarter on a 45% sales jump from last year. The fact that the climb came with a 57 cent per-share loss didn’t bother investors who were braced for a 58 cent per-share loss.

The Elon Musk hype machine rolls on as Tesla prepares to roll out 500,000 units of its newest car, the Model 3.

Cars are not the kind of thing people usually wait hours in line to buy. But that’s exactly what happened last month when Tesla Motors started taking down payments for the Model 3. The car won’t even be available until 2017 and certainly no one has given it a test-drive, but at $35,000, it costs less than half the price of a Model S — and that’s all most people need to know.

Silicon Valley types like to throw the word “disruption” around a lot, but Elon Musk is truly disrupting the car industry. Not only did he manage to create a car so exciting that people are lining up overnight just to put down a payment, but those locations where customers were dropping their money? They’re not even actual stores. You can’t buy a Tesla there — you can only purchase one online. The storefronts you see are simply places where people can test-drive the vehicle. This business model, which bypasses the dealership, is of course upsetting the car-sales landscape and is under attack by the dealership lobby.

But it’s important to remember that disruption in and of itself should never really be the end goal. Not every industry needs to be disrupted. If entrepreneurs are going to work to disrupt, they have to make sure there is a positive end goal — that consumers are going to benefit, that work is going to become more efficient or that some overall good comes from the disruption.

Read the full article here.

California PUC Overhaul Needed

By: Mike Montgomery

California is a complex state with diverse needs to fit its changing demographics and economy. As we think about how best to prepare our state and its people for our collective future, it’s worth reexamining the regulatory agencies that are entrusted with keeping Californians safe and are responsible for crafting and enforcing important rules that impact millions across the state.

In wake of the recent safety concerns with California’s electricity and gas-line infrastructure, the head of the state’s Public Utilities Commission, Michael Picker, has suggested that perhaps California would be best served if his agency spun off some of its regulatory functions to other agencies.

“In my own judgment, maybe we shouldn’t be doing telecommunications anymore,” Picker said, questioning whether or not the PUC can “do these things effectively” in the face of massive technological and regulatory change.

Clearly, the PUC has a lot on its plate. In addition to supporting California’s infrastructure as we transition to cleaner, renewable forms of energy, it also regulates sectors as diverse as gas, telecommunications, limousine drivers, water, railroads and transit to name but a few.

Assemblyman Mike Gatto, the chair of the Assembly Utilities Committee, has proposed a measure that would break up the PUC. It’s a proposal worth considering, but more importantly, it is time for state lawmakers to consider a thoughtful review and complete airing of the issues that are driving the push for this change.

By embracing a more effective and modern regulatory approach, California can improve public safety while helping our state’s economy grow.

Read the full article here.

The Next Shared Economy

By: Mike Montgomery

Economist Paul Krugman has pointed out that in the future, as computers start to handle everything from tax law to driving, the jobs that will be most in demand are the ones that can only be done by humans: things like gardening, house cleaning and plumbing. A higher value will be placed on jobs that a computer can’t do.

But talk to entrepreneurs in those kinds of fields today and they’ll tell you their biggest challenge to building a business is finding customers. For skilled laborers who want to work on their own, time spent chasing leads and marketing is time they’re not getting paid for their work. Also, these entrepreneurs still have to worry about things like inventory management, invoicing and sometimes payroll, but because time is money, the time involved in those tasks can make growing a sustainable small business incredibly challenging.

Enter the next phase of sharing-economy platforms, gig economy, or what I like to call the personal enterprise economy. Thumbtack, a San Francisco-based company that has raised $125 million and is valued at $1.3 billion, connects skilled workers with customers, taking a big burden off of the backs of these entrepreneurs. While most sharing-economy companies are creating platforms that give people ways to earn money between jobs or on the side, Thumbtack is trying to help professionals build full-time companies. According to a new report from the company, two-thirds of the professionals on its site are running their businesses full time.

“Tech helps liberate and empower people,” says CEO Marco Zappacosta. “It helps them build on a business and lead their lives the way they choose.”

Read the full article here.

We Need To Talk About Security On The Internet Of Things

By: Tim Sparapani

Some horrifying stories surfaced recently about glaring data security vulnerabilities for the Internet of Things. A company called Shodan, which is a search engine for connected devices, has had no trouble pulling up video camera feeds of sleeping babies, marijuana plants and schoolrooms. The site found insecure connections for everything from traffic lights to ice rinks. Those gaps are a hacker’s playground, and they should worry consumers and companies hoping to capitalize on the market for Internet-connected devices of all kinds.

By collecting data from things like lightbulbs, factories and home appliances, engineers will be able to design endless apps to make things work more efficiently, saving energy and water while preventing equipment failure. That’s the essential promise of the Internet of Things (IoT) era. Thanks to the burgeoning IoT economy, we’re on the verge of having self-driving cars and appliances that tell us that their parts are about to fail.

But right now, that bright future looks a little dim. Security is paramount, and if manufacturers don’t take steps to assure the public that their devices are secure, that revolution will be delayed.

Perhaps because IoT devices are to date opaque — after all, there’s no interface for a lightbulb with sensors embedded in it — consumers haven’t been overly concerned about safety issues. Since this is still a relatively new industry, things like price and convenience have taken priority. We are in a type of technology limbo where we are learning that securing the data collected by these devices is essential, yet too few manufacturers have implemented robust data security protections for these devices.

But it will take just a few high-profile hacks to change that. Say, for example, all of the traffic lights in a big city suddenly went red at the same time and stayed that way. Or all of the lightbulbs linked to a given system went on in the middle of the night. An event like that would be enough to potentially scare people away from the IoT.

Read the full article here. 

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