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Mercury News: New economy requires a new safety net

By: Mike Montgomery

When the California Labor Commission ruled that Uber drivers are employees and should therefore be entitled to benefits, it showed how out of touch our regulators are with the new economy.

The ruling is another reflection of outdated thinking about the employee-employer relationship. Digital platforms and apps are reinventing the intersection of supply and demand. This change may have skyrocketed with ride- and home-sharing, but we will soon use these systems for all types of services, from parents finding Little League batting coaches for their kids, to truckers picking up extra loads on their routes.

These new platforms are creating profound change. Over the last 40 years we’ve gone from a workforce where an employee had two or three employers over his or her lifetime to workers now switching careers regularly and even scaling by hiring their own employees along the way…

(Read the full article here)

Sharing Is Caring In Los Angeles

by Kish Rajan

On Tuesday, Los Angeles City Hall was the hot spot for anyone who cares about the future of the sharing economy in the City of Angels. I made the trek in order to testify on behalf of the companies that are revolutionizing consumers’ lives as part of what we call the personal enterprise economy.

This new economy lets people work on their own terms. People can work when and where they want with no duty to clock in or out or report to a boss. Undoubtedly, there are issues to work out given the recent decision handed down by the California Labor Commission saying Uber drivers should be considered employees. But that issue might ultimately be better resolved by creating   a new classification of worker that will decouple benefits from employers. This would allow people to “work” for multiple companies (or, more precisely, platforms) while still benefiting from things like Social Security, unemployment insurance and workers comp.

Back to the issue at hand…the morning session before the full City Council was all about rideshare, while the afternoon (and early evening – it was a long one) was focused on homesharing before the Planning and Land Use Management Committee (“PLUM”).

There were many arguments in favor of the new technologies; and there was a basic consensus that these new business models are here to stay. So the question wasn’t whether to allow these businesses to operate — but under what rules.

The City Council was, for the most part, thoughtful and tried to understand the facts and to consider the right ways to regulate the app-based engines of the new economy.

But at times, the council defaulted to the standard thinking of trying to apply existing regulatory approaches to new models. Some council members certainly understand that new approaches are needed. CALinnovates looks forward to continuing to educate Los Angeles’ councilmembers on appropriate ways to blend smart regulations into the public policy process rather than defaulting to outdated thinking.

Dozens of supporters turned out to argue passionately about the sharing economy. Hundreds of Angelenos showed up to urge their elected officials to consider the issues and make informed choices about the future of Uber, Lyft, Sidecar and Airbnb.

The stars of the rideshare session were Councilmembers Mike Bonin and Bob Blumenfield. While Bonin was more outspoken, Blumenfield masterfully navigated the chaos and delivered a vote by the slimmest of margins that allows Uber and its brethren the right to pick up passengers at LAX. Without these two standing up for innovation, the vote would have swung in the opposite direction. Silicon Beach should take note of the two protectors of innovation:

 

“People are baffled that they can take ride share to the airport but can’t take one home.” – Mike Bonin

“We need a uniform standard.” – Mike Bonin in pointing out that limousines, town cars, fly away shuttles and courtesy shuttles do not require background checks.

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“There are terrible anecdotes on both sides. I don’t want to legislate on anecdotes, but data.” – Bob Blumenfield

 

Ultimately, the data trumped the anecdotes and those wishing for a world-class airport (it’s coming) can rejoice that LAX does offer world-class transportation options.

While there was full clarity on the rideshare issue, the home share discussion will continue as the council considers a bill co-authored by Bonin and Council President Herb Wesson.

In the end, Los Angeles’ elected officials showed that they understand that innovation is critical to the city’s future. The council wants to get it right. They need ongoing help and encouragement to get there, and we’ll be there every step of the way.

 

Links:

Los Angeles Times

http://www.latimes.com/local/lanow/la-me-ln-uber-lyft-lax-20150824-story.html

http://www.latimes.com/local/lanow/la-me-ln-airbnb-rental-regulations-20150825-story.html

ABC 7

http://abc7.com/news/los-angeles-city-council-approves-plan-to-allow-uber-lyft-pickups-at-lax/956634/

 

Los Angeles Times – Readers React: Yesterday’s taxi and hotel laws don’t work for today’s Uber and Airbnb

To the Editor: Dave Rochlin’s op-ed article on the sharing economy misses the mark. (“When ‘innovation’ means rule-breaking,” op-ed, July 27)

Rochlin ridiculously compares the sharing economy to the drug trade, saying both are “gray markets” that form when there is an unmet need within regulated industries. The sharing economy is bringing desperately needed jobs and innovation to regulated markets while serving consumers’ needs. It’s not a dangerous underground market.

Rochlin insists that regulations need not stifle innovation, but that’s exactly what we’ve seen in the taxi and hotel industries. Uber and Airbnb are dragging these industries into the modern world and bringing economic opportunity along with them.

Of course we need regulations, but those regulations need to be smart and modern. Regulating new companies under laws that were written for bygone eras is old-school thinking that will limit society and the economy. Sharing-economy companies are exposing the need for modernizing government. This is the way change happens.

Mike Montgomery, Pacific Palisades

Read original letter here.

The End Of Record Labels

Artists are starting to realize that the real enemy isn’t streaming companies,
it’s record labels.

By Mike Montgomery, Executive Director CALinnovates

When Taylor Swift won her brief battle against Apple Music in June, she was hailed as the savior of music. Thanks to Swift, artists will now be paid royalties during Apple’s three-month trial period of its new streaming music service.

But that will hardly save music. Artists are increasingly up in arms about the paltry paydays they are collecting from streaming music. Back in the day, a band could earn $2 for every CD sold. Today, artists are lucky to get a fraction of a cent for each stream.
Most of the music world’s anger has so far been directed at streaming companies. From the outside, it’s easy to see why. It looks like tech companies are bringing in millions and handing very little of it over to the people who create the music that makes these companies possible in the first place.

But a closer look shows that’s not exactly the case. Streaming companies hand out (on average) 70% of all revenue to rights holders. Spotify has distributed more than $2 billion in royalties. According to Spotify, as of June 2013 it was paying out $425,000 per month for an average global hit album and $145,000 per month for a Spotify Top 10 album. And while Apple, which won’t have a free option after the trial period, will pay $7 of every $10 monthly subscription fee to the music industry, it’s an open question as to how much of that revenue the artists will actually see.

It’s starting to become clear that the money isn’t getting log jammed at the streaming sites; it’s getting log jammed at the record companies. The recent massive Sony hack revealed that the record labels are receiving tens, if not hundreds, of millions from Spotify. A leaked version of Sony’s contract shows that Spotify paid Sony $42.5 million in advances for the rights to Sony’s music catalogue, and a ‘most favored nation’ clause gives Sony the opportunity to earn millions more. Spotify also gave Sony an additional $9 million in ad inventory that it could use or sell at a profit. But how much of those millions make it to the artists?

Read the full article here.

Net Neutrality: a Response to Representative Anna Eshoo

By Mike Montgomery, Executive Director of CALinnovates

Representative Anna Eshoo (D-Palo Alto) got it right when she wrote about the importance of Net Neutrality to the next generation in an op-ed published in the San Francisco Chronicle.

Millennials already live their lives online. If business or the government makes it more difficult for those young people to have clear access to all parts of the Internet, it will only further isolate them from the processes of government. Already, as Eshoo points out, roughly half of Millennials don’t identify with any political party. Take away Net Neutrality and it sends the strong message that government doesn’t share Millennials’ priorities. That would only push the next generation father away.

And while I agree with Rep. Eshoo’s assessment that an Internet without fast lanes is essential to the future, she is missing a critical point about the future of the open Internet.

Read the full article here.

Forbes: How the Tools of Venture Capital are Revolutionizing Food

By: Mike Montgomery

What we eat is changing dramatically. Grocery stores devote aisles to organic merchandise, farmers’ markets spill into the streets and restaurants list the producers that supply their menus. People have become suspicious of Big Food, a catchall term that has come to mean anything processed or fake.

There’s also a growing desire for transparency from consumers. People want to know what they’re putting in their bodies, which drives health and fitness entrepreneurs like Melissa Fox to launch their own companies in response. Fox’s M-Jo Life meal replacement products contain only plant-based, vegan and non-GMO ingredients. Products such as these are part of a group of food startups that have elevated recipes to a higher order, or what Fox calls “ingredient curation” lacking from many mass-marketed products.

Big Food is trying to keep up with the times. General Mills has vowed to remove all artificial colors and flavors from its cereals by 2017. McDonald’s is selling fewer sodas with its Happy Meals. And many big companies are just flat out buying health. General Mills spent $820 million to purchase Annie’s and Campbell’s spent $1.56 billion on Bolthouse Farms.

Read the full article here.

Former Director of California’s GO Biz, Former Director of Policy at Facebook Join CALinnovates

SAN FRANCISCO, June 29, 2015 /PRNewswire-USNewswire/ — CALinnovates executive director Mike Montgomery announced today that Kish Rajan and Tim Sparapani have joined the organization as chief evangelist and senior policy fellow, respectively. Representing companies across the Golden State, CALinnovates advocates for businesses that are improving industries and expanding economic opportunities for Californians through innovative technologies.

Building on expansive experience in California technology and public policy, Rajan serves as CALinnovates’ chief evangelist, leading the organization’s statewide business and economic development programs. Most recently, Rajan served as director of the CaliforniaGovernor’s Office of Business and Economic Development (GO Biz.) under Governor Jerry Brown. As a public advocate, he shaped the state’s economic development efforts, working with policy makers, business leaders and communities to advance economic growth and a positive business climate in California. Previously, Rajan was elected city council member for the City of Walnut Creek in the Bay Area.

“Innovation is the new heartbeat of our economy.  As California asserts its global leadership, we want this boom to create opportunity for every Californian,” Rajan said. “At CALinnovates we are developing a robust work plan to increase public awareness and shape policy discussions about the imperative to build a more modern economy that can benefit all.”

A prominent privacy advocate, Sparapani joins CALinnovates as a champion of consumers at the federal level, and will serve as senior policy fellow. A self-described “tech optimist”, Sparapani has helped innovators and entrepreneurs navigate the world of D.C., state and international regulation for over a decade, first as director of public policy at Facebook, then as vice president of law, policy and government affairs at the Application Developers Alliance. Sparapani formerly served as senior legislative counsel for the American Civil Liberties Union.

“The bridge between California technology and Washington policy has never been more important than it is today,” said Sparapani. “The tech community’s ingenuity and disruptions echo through Capitol Hill. It is important that regulations power innovation while providing certainty and competition and ensure consumer protection and choice.”

“Kish and Tim are well-regarded thought leaders in technology policy matters and bring immense knowledge and experience to CALinnovates,” said Montgomery. “In having colleagues with their expertise on both coasts, CALinnovates will continue to expand its tech advocacy and leadership on behalf of innovators and entrepreneurs at every level of government.”

Located in San Francisco, CALinnovates is a non-profit tech advocacy coalition working with innovative companies across the Golden State that are improving industries and expanding economic opportunities across the nation.

Forbes: Why Civic Tech Is The Next Big Thing

By: Mike Montgomery

As recently as ten years ago, government was seen as the black plague of the tech world. Bureaucracies move slowly. Governments have limited resources. Convincing municipalities to spend money on anything can be a Herculean task. Venture capitalists recommended entrepreneurs stick to the private sector where budgets are looser and there’s a more diverse customer base.

 That’s beginning to change. Civic tech is now a hot space for tech investments. Governments are waking up to the need to bring their technology into the 21st century. It’s no longer good enough to have documents hidden in hundreds of filing cabinets and reports printed out on dot-matrix printers. Citizens are increasingly demanding transparency from their elected officials and too often, governments have no way to provide a clear window into how or why taxpayer money is being spent.

Read the full article here.

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