Tech + Policy Early November Roundup

Here’s a brief roundup and summary on what’s happened at the intersection of technology and public policy through the first ten days of November. Highlights include stories on daily fantasy sports, Airbnb in SF, the cost of Uber employment classification, government-funded innovation efforts, and drones.  If there’s an article I’ve missed, please let me know on Twitter @nkhare:
 
Sharing Economy & New Business Models
 
Everyone saw this coming since New York AG Eric Schneiderman launched an investigation. Everyone, but apparently DraftKings, who sent a last minute email to its players asking them to “Contact the Attorney General Today!” Not only was the call to action weeks too late, but the AG isn’t a legislator – this is not about changing his mind on an upcoming vote – he choose to launch a highly-publicized resource-intensive investigation. Earlier, I wrote about how DraftKings & FanDuel got themselves into this mess, and what they could do to get out of it.
 
A great recap of what happened with Prop F in San Francisco, and their thoughts on why technology firms take the regulatory approach to “operate first, ask for permission late.” My take on the approach, articulating that the cause is more than just regulators moving slowly, and how investors and firms can make this process smoother in the future.
 
Stephen Gandel estimates that it would cost Uber $4.1B if their drivers were classified as employees rather than contractors. Unfortunately, there’s one big hole pointed out in a tweet by Professor Richard Thaler: benefits are part of total compensation; Uber would pay drivers less to offset some of the cost. The classification issue for Uber is not simply about cost, but around work rules that create more friction around recruitment, administration, and worker flexibility.
 
Fresh off a vicious battle over ride-sharing regulations, New York City sees a group of business leaders launched the Partnership Innovation Council to help “address some of the regulatory barriers” facing tech firms. Most importantly, it looks to be proactive by examining current regulations that may impede innovation that benefits residents. One concern is its funded by big tech vs. investors in startups – the spokesperson talks about pooling resources to help startups, but who ultimately sets its priorities?
 
Boston Mayor Martin Walsh makes a comment that tech startups with new business models should be regulated “in a different manner” – demonstrating once again, that Boston is a municipal leader in innovation.
 
Startup Growth Policies
 
Different nations are taking different tacks to promote innovation. But the key shouldn’t just be about creating new startups – the article cites several example of governments failing to produce meaningful results by simply throwing money at startups. Instead, the focus should be on creating a self-sustaining ecosystem, and it takes more than just seed money and a few entrepreneurs (e.g. talent, customers, distributors, expansion funding, infrastructure, quality of life, regulation, etc.).
 
San Francisco, New York City, and Boston are highlighted as three examples of how municipalities can help startups. There are really two examples though – SF with new regulation for new business models (and it’s not exactly a shining beacon) & NYC with advocacy for startups. Boston is leveraging technology to help government (vs. government to help technology). A missing example is the ability for local governments to convene – to use government as a platform to bring startups to the same table as corporations, policymakers, investors, etc.
 
From special economic zones to direct funding, China is enacting some of the most interesting if not dramatic policies to promote startups and innovation. Here’s a peek into a project that moved fast because of government: a $36M startup village, planned and built in just two years.
  
Emerging Technologies
 
Canada is a positioned to capitalize on in drone innovation, having issued early and fair regulations on commercial drone use (with Amazon testing drones there). They’re taking the next step, working with invested stakeholders, to smartly regulate drones by risk. 
 
23andMe, all over again? FDA is about to face off with DNA4Life over their $249 direct-to-consumer DNA test. 23andMe, the Mountain View-based genetics company, just underwent a lengthy, two-year process to work with the FDA to re-launch a pared-down version of their home genetics test kit. The difference here is that DNA4Life believes their specific test isn’t subject to FDA oversight. While many experts disagree, all will agree that these companies will face an expensive and long process. Other genetic testing companies, such as Invitae, have chosen to avoid this route by not going direct-to-consumer, instead working through physicians.

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