EnablingRegulatoryInnovationbyUsingData

MarcoTorregrossaManagingDirector@EuropeanSharingEconomyCoalition

SecretaryGeneral@EuropeanForumofIndependent Professionals

EuropeanCommissionDGGrow- 12July2016

Regulatory Tension: Similar Pattern

1. Newplatformcreatesaninnovationthatbreaksoldrules2. Newplatformignoresthoserulesuntiltheyhavegrowna

criticalmassofusers3. Lawmakersandincumbentsrespondbytryingtoshutdown

theplatform4. Platformsandtheirhappyuserscomplainwiththelawmakers5. Asmallamountofdataissharedtosettlethedispute6. Repeat

How Governments Regulate Platforms

Traditionalregulatorymodel->theonegovernmentusestoregulatetheprivatesectorfocusesonup-frontpermission.

Why?->Whenregulationswereconceived,policymakersdidn’thaveaccesstocomputergeneratedreal-timedata.Theonlyfeasibleapproachwastobuildhighbarrierstoentry.

Source:NickGrossman,@nickgrossman

How Platforms Regulate Themselves

Platformsareregulatoryenginesintheirownrights->Thisisbasedondata-drivenaccountability.

Example ->Uber driverscangetkickedoutoftheplatformforpoorratings,veryquickly.

Source:NickGrossman,@nickgrossman

How Governments Should Regulate Platforms

Regulatoryinnovationbyusingdata->Grantplatformsthefreedomtheygranttheirusers,butalsoenforcethesamedata-drivenaccountability.

Examples ->Airbnb collectstaxforlocalauthoritiesinAmsterdam.GooglepredictsfluoutbreaksfortheCenterforDiseaseControlusingdatacollectedfromsearches.Airmapcollectsreal-timedronesinformationforairsafetyauthorities.

Source:NickGrossman,@nickgrossman

New Ways of Trust: Sharing the Data

• Tonsofdataisgeneratedbyourphones,ourhomes,ourcomputers,ourcarsetc.

• Platformshavebeenmininglargesetsofdatatrailsusersprovidewiththeirdigitalinteractionstogenerateinsightsofbusinessandsocialimportance.

• Governmentsneeddatatoregulateeffectivelyandensuresafety,security,health.Thereareanswersinsidethedata!

• Platformssystematicallyhandoveranonymized(butaudited!)datatogovernments,whocanuseittoregulate.

• Platformsbuildcredibilitywithregulators,ensurecompliancewithasetoflawsandenacttransparencywithusers.

1. Lawmakersneedtomakeitlesshardforplatformstogetstarted(e.g.lowerbarrierstoentry,relaxlicensingrequirements,increasethefreedomtooperate).->Thisiscrucialforexperimentationandinnovation.

2. Inexchangeforthatfreedom,platformsneedtosharedatawithregulatorsinrealtime,justliketheirusersdowiththem.->Theywillneedtoacceptthatdatamayresultinformsofaccountability(e.g.Uber couldbemakingNYCtrafficworseandAirbnb couldbemakingSFhousingaffordabilityworse).

Final Takeaways

MarcoTorregrossahttp://about.me/marcotorregrossa

@EuroFreelancers |#SharingEconomy|#CollEcon

NickGrossman,UnionSquareVentures:Here’sthesolutiontotheUber andAirbnb problems— andnoonewilllikeit,23July2015Arun Sundararajan,ProfessorofbusinessatNewYorkUniversity:WhatGovernmentsCanLearnFromAirbnb AndtheSharingEconomy,12July2016

Sources