The Denver Post
Uber is a test of Colorado’s commitment to startups
Posted: 08/24/2013 05:01 PM MDT
Colorado’s leaders have spent a great deal of time, energy and money to position the state as a hub for innovation, the Internet economy and entrepreneurship.
In 2011, Gov. John Hickenlooper launched the Colorado Innovation Network (COIN), which is designed to transform Colorado into the most innovative state in the nation.
The results to date are impressive. Forbes ranks Colorado as the fifth-best state in which to do business; the U.S. Chamber of Commerce ranked Colorado second in the nation for entrepreneurship and innovation; and StartUpHire listed Colorado as first for growth in the startup job sector, as the state saw a 170 percent increase in startup employment between 2010 and 2011.
COIN’s second annual summit — which will be held on Wednesday and Thursday in Denver — will bring together Internet entrepreneurs, startups, technologists, venture capitalists and others involved in Colorado’s thriving Internet economy.
When the governor welcomes those leaders and entrepreneurs, they will have one thing on their minds: What will be the fate of Uber Technologies?
The eventual answer — and we realize it can’t be provided at this time — will be paramount in defining Colorado’s commitment to lead the Internet economy. And we recognize that Hickenlooper has personally indicated support for Uber in its clash with state regulators.
Uber is an innovative ride-for-hire service that connects drivers with riders for on-demand transportation. The company is operating in 40 cities worldwide, but it finds itself embroiled in a regulatory dispute with incumbent taxicab companies in Denver who feel threatened by the increased competition.
After more than a year of meetings, Colorado regulators may be on the verge of adopting regulations that would essentially drive Uber out of the state. If the Public Utilities Commission takes this draconian step, Colorado would become the first state to enact rules making it illegal for Uber to operate.
Such a decision would irrevocably harm Colorado’s tech-friendly image and cost the state jobs, investment and opportunity.
Uber has become a litmus test for the Internet economy and the state’s business climate for startups. And it is bigger than just one company. What happens to Uber has implications for some of the fastest growing Internet startups, many of which, like Uber, are disrupting markets long-plagued by inefficiency and entrenched interests. Telling Uber that Colorado is “closed for business” will send a chilling message throughout the Internet economy.
The Internet is a fundamentally disruptive technology. Uber has shaken up an outdated transportation sector unresponsive to consumers and challenged the incumbent operators with a better product and superior customer service. So let’s drop the charade about public safety: entrenched incumbent taxi operators want regulators to shield them from competition.
Uber is not a taxi company or a limousine service. It is an electronic clearinghouse that efficiently connects people seeking rides with a universe of potential drivers. No one would accuse Expedia of operating an airline, but that is exactly what the incumbent taxi operators would have you believe about Uber.
Competition is good for business and good for consumers. Consumers fare best when a market becomes competitive and stays that way. Yet the PUC’s proposed regulations will harm the very consumers they are charged with protecting. Of course consumer protection is important. Rules ensuring safety, preventing fraud and deterring abuse are necessary and proper exercises of regulation. However, what is proposed here is not intended to safeguard consumers, but rather to protect incumbents from new competition — all at consumers’ expense.
Politicians of all stripes like to pay lip service to the Internet economy, extolling the virtues of disruptive technologies, and new and innovative thinking.
Uber presents Colorado with one of the biggest tests in terms of making the the most innovative state in the nation. If it is truly serious about transforming itself into the best state for entrepreneurs and Internet startups, the choice is clear.
The eyes of the Internet economy are watching.
Michael Beckerman is president and chief executive of The Internet Association.
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