The U.S. has enjoyed historic business dynamism where about one new business is formed per minute while another shuts down every 90 seconds.
This life cycle is a key driver of innovation and growth and gives rise to, in the words of economist Joseph Schumpeter, "great gales of creative destruction" which he believed were the force of our economy.
Out of this 'great gale' has come another potent source of creativity and synergy: the connected vehicle, which is becoming yet another foundation from which exciting products are reshaping our lives. One of the products interacting with this burgeoning platform is GeoToll, the technology start-up I run.
GeoToll is an electronic toll collection (ETC) solution that allows anyone with a smartphone to pay tolls anywhere in the U.S. While it is primarily a convenient and intelligent alternative to cash, video, or a toll tag, in certain contexts ETC enhances safety because it helps eliminate accidents at toll plazas. And because you don't slow down with ETC, it is good for the environment, because idling cars waiting in cash lanes emit more fumes than those traveling at mainline speeds.
Now the National Highway Traffic Safety Administration (NHTSA), an agency of the Department of Transportation (DOT), says it should have the authority to regulate apps and other products that can be brought into vehicles. According to the surface transportation reauthorization bill the administration just delivered to Congress, NHTSA believes it should be able to “prescribe design” of apps and other connected car tech.
But how can any regulatory authority hope to effectively police such a complex environment? Our smartphones, tablets, and embedded devices are constantly evolving. Owners may download dozens of useful apps. Can a static list of characteristics be defined that, together, would make one unsafe? Do applications in combination become more dangerous? What combinations? How many does it take to pass that threshold? What are all the features that warrant regulation?
Such 'clairvoyant' regulation creates uncertainty for businesses like mine. And companies are less likely to bet on innovation when their risks and rewards are uncertain.
GeoToll was made possible primarily due to two things: the innovations in wireless and mobile technologies mentioned above, and an open and predictable business environment that encourages invention and experimentation, and rewards risk-taking. A fundamental and enabling component of this venture-friendly environment is a regulatory regime that reflects real world experience.
My concern is that appropriate, informed regulation – hard enough to pull off in any case – is even more difficult in an environment that moves as quickly as tech. Given the challenges of regulating a moving target, and facing the impracticality of creating regulations that can keep up, my fear is that the agency will choose to promulgate blanket regulations. Once this begins, a space rarely becomes less regulated.
Anything that prescribes what we can download to our smartphones, tablets or cars isn't just overreach -- it thwarts innovations like GeoToll, which isn't just for tolling but for other future uses like parking, transit, and fuel payment.
It would not just be inconvenient for our company to go through another costly layer of testing and verification to vet and prove our solution. If that was a requirement, GeoToll -- and likely most other apps used, on occasion, in a motor vehicle -- would never have survived past the conceptual phase because no one would have invested in them given a barrier like a U.S. DOT app-approval regulatory regime.
A big part of our economic vigor is due to our openness to experimentation and encouragement of entrepreneurial efforts. We should do all we can to encourage these efforts and not pre-emptively put the brakes on one of America's most promising sectors.
GeoToll and other transportation apps, be they from start-ups or established companies, will continue to enable exciting progress in mobility as long as they are allowed to do so and are not thwarted by pre-emptive regulations.
Timothy McGuckin is CEO of GeoToll, Inc., a Florida tech company.