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Technology lawyers being called to defend startups from government crackdowns

July 26, 2014

San Francisco and the Silicon Valley are known for pushing the envelope when innovation meets legal boundaries, and recent startups are at it again, with mobile apps that allow creative ways to earn money. But one startup has gone too far by auctioning off the commodity of public parking spots to highest bidder, and the technology lawyers being called to arms are reporting that this most recent battle represents “yet another clash between innovative technologies and regulators trying to maintain law and order, public safety, and a sense of social decorum,” according to this article online in Business Newsfactor.

The app at stake in this instance is one that “allows drivers to score a notoriously hard-to-get San Francisco parking spot” and then sell it to a buyer who arrives to take their place. City Attorney Dennis Herrera calls the practice “illegal” and warns drivers that it puts them “on the hook for $300 fines,” saying the app “creates a predatory private market for public parking spaces.” And while some technology lawyers agree with both the technicality of Herrera’s statement and the ideology behind protecting the public from predatory schemes, others disagree, saying that the app and the two other similar startups facing government action represent a response to a public demand for change within the city.

Startups like Airbnb, which allows homeowners and apartment dwellers to rent out their living space nightly for customers online, or Uber, a ride-sharing service that is displacing taxi drivers through competitive rates in cities like London and New York have faced controversy and criticism through usurping existing public (and private) services established through legislation or tradition. But technology lawyers say these startups are pushing the boundaries for a reason that’s undeniable: addressing a public demand. When city hotel or taxi service prices become prohibitive for travelers, Airbnb and Uber offer consumers an alternative. In San Francisco, the dearth of parking spots has prompted the private industry to rise to the challenge of meeting the public’s needs.

But lawmakers don’t see it this way, a reality that may be to their disadvantage. Business and technology lawyers like Gregory W. Schulz see the problem arising from legislators making short-sighted decisions on housing, development and public transit policy, which leaves cities like San Francisco plagued with overwhelmingly heavy traffic and expensive housing prices. Internet industry analyst Larry Downes says, “Instead of harassing startups trying to chip away at the problem, the city should acknowledge its many failings of leadership and do something productive.”

But getting the government to acknowledge its failings isn’t easy, and attorneys warn startups that the cease and desist letters sent to Monkey Parking and ParkModo are only the beginning. “If app developers are facilitating users trying to overcome vast inefficiency and corruption in government, they become an easy target,” according to Downes.

The future may not be so bleak for these startups, however. The Startup Policy Lab is more optimistic about communication between policymakers and startups, and sees forums in which the two entities can constructively hash out their differences being integral to the changing market.

 

 

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