Robin Chase on new transportation platforms, cooperative capitalism, and more

Transportation entrepreneur Robin Chase is former CEO of Zipcar, the largest car sharing company in the world.  The is on the Boards of Veniam, the World Resources Institute, and Tucows. She also served on the board of the Massachusetts Department of Transportation, the National Advisory Council for Innovation & Entrepreneurship for the US Department of Commerce, the Intelligent Transportations Systems Program Advisory Committee for the US Department of Transportation, the OECD’s International Transport Forum Advisory Board, the Massachusetts Governor’s Transportation Transition Working Group, and Boston Mayor’s Wireless Task Force.

Robin lectures widely, has been frequently featured in the major media, and has received many awards in the areas of innovation, design, and environment, including Time 100 Most Influential People, Fast Company Fast 50 Innovators, and BusinessWeek Top 10 Designers. Robin graduated from Wellesley College and MIT’s Sloan School of Management, was a Harvard University Loeb Fellow, and received an honorary Doctorate of Design from the Illinois Institute of Technology. 

I started Zipcar in 2000, armed with three beliefs: people would be willing to share cars instead of owning them because the economics makes sense; a platform leveraging new technologies would make that sharing effortless; and people could be trusted: to pick up and drop off cars without supervision, fill up the gas with a company credit card, and take out the trash when they left.

Zipcar transformed the excess capacity embedded in old inefficient ways of using cars and constructed a platform that enabled the direct participation of our members in the “co-creation” of the new efficient service. This structural triad of excess capacity, platform, peers has been adopted by hundreds (thousands?) of companies since, creating what we now call the collaborative economy. This structure, that I call Peers Inc, elevates and celebrates an asset previously under appreciated: the value of individuals to localize, customize, and specialize products and services according to their unique assets.

The Peers Inc collaboration can be magical, with results that fly in the face of all established business theories, beating the ability of hierarchical and vertically integrated institutions.  Peers Inc companies can scale at exponential rates because they leverage excess capacity (which doesn’t have to be sourced, financed, and built), and they invite individuals (with their diversity of locations and interests) to co-invest. The result? Airbnb offered as many rooms for rent as the largest hotel chain in the world in only four years and Wikipedia’s English edition contains 4.8 million entries.

These companies can also adapt and localize at exponential speeds thanks to the localness and diverse interests of its participants. Witness Yelp and TripAdvisor’s fine-grained reviews of retail in every neighborhood.

And these companies learn at exponential speeds because they make use of the diversity of individual approaches, unearthing and sharing best practices and defusing worst practices. My favorite example: DuoLingo, which offers free online foreign language learning. DuoLingo makes use of the mistakes and successes of its students to hone its instruction, with the result that people learn a semester’s worth of knowledge in just 34 hours instead of 130.

Since Peers Inc companies grow faster, learn faster, and adapt faster, in the future, everything that can become a platform will become one, giving rise to a business environment that works very differently – almost the opposite – to fifteen, or even ten, years ago. Where once, companies succeeded by inducing scarcity and raising barriers through patents, trademarks, copyrights, and certifications, today, the most value is created by opening assets up and maximizing the participation of individuals – to experiment, to localize, to adapt, to innovate.

Peers Inc collaborations change the power balance between owners, consumers and participants. The product, the output of the platform, gains more value with each additional participant. Their very diversity is the source of strength. All of a sudden, we are seeing things that we never thought would be possible. Public goods and currencies can be created without the involvement of governments, community value created without the use of private capital, rules that are enforceable without a centralized force.

All the while, the world suffers from the crises of climate change, sustainability, water scarcity, deforestation, housing, transportation, education, and poverty — all requiring solutions that scale, learn, and adapt quickly if we are to make meaningful change at the pace needed. The collaborative Peers Inc economy is exactly what we need to respond to these urgent problems facing our planet.

We are right this minute rebuilding and restructuring economies with this new paradigm. This means that we have the opportunity to create the world we want to live in. IF we recognize overtly, loudly, powerfully, that the success of this paradigm comes when people are empowered and supported.

Peers Inc is a “together” model. There is a unique role for governments, institutions, and individuals. Large corporations and governments have the power of “Inc,” of creating structures that protect and unleash the creativity of peers. The future of business lies in breaking down the walls between the “Inc” and the “Peers,” in enabling fluid interactions between the institutions and the innovators so that the two powerful ingredients of value creation are fused into one formidable force.

Together we can engage millions of people to accomplish very big things, providing significant public benefits alongside great economic value. It’s not just the owners and creators of the platform who gain: with mindful design of the platforms, we can retain the rule-making governance and ownership within the creator communities. This is indeed a new paradigm: the future of business is about empowering people instead of empowering companies.

It’s time to change the game by creating platforms and sharing power and value with the people who give them life. Together, we have the chance of being the collaborative generation that builds a new economy that doesn’t pit owners against laborers, producers and consumers. Every person can do amazing things when she gets access to the resources she needs to create something of value for society, to be a changemaker. It is sharing that enables, empowers, and unlocks value.

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Tax for Driving, an Economic Engine (2009)  The Transportation Research Board, and the a national finance commission have both recommended that the country transition to a vehicle mile traveled (VMT) tax as soon as possible.

Let’s spin some straw into gold. There is a hunger in the Whitehouse and state houses, on Wall Street and Main Streets for something, anything, to turn our financial distress and disappearing budgets into a future that restores hope, prosperity and confidence in government. I see the shimmering gold that keeps getting mistaken for impractical straw. You just have to get the right angle to the light.

The glimmer lasted only a few hours when late last week the AP reported that Transportation Secretary, Ray LaHood said: ‘’We should look at the vehicular miles program where people are actually clocked on the number of miles that they traveled’’ as a substitute for the gas tax.

But within hours of its first report, transportation department spokeswoman Lori Irving declared: “The policy of taxing motorists based on how many miles they have traveled is not and will not be Obama administration policy.” And later this sentiment was reiterated later by President Obama’s own Press Secretary Robert Gibbs: “It is not and will not be the policy of the Obama administration.’’

And that shimmering straw was thrown back into its dark policy-wonk corner again. But hold on. Let’s re-examine the implications of paying for roads by the mile rather than by the gallon.

Point zero (not a point for this story but we need to put it behind us so that you can focus): your locational privacy as you drive can be protected. Really. We can deliver on that so put it out of your mind.

Point number one: if we follow through with the Economic Stimulus Bill just signed, state and federal governments are going to be replacing a whole bunch of old fuel-inefficient cars with fuel efficient ones, quickly if they follow the promised timetable. And then the rest of us are supposed to be replacing ours similarly, if the car companies and the EPA follow through with their recent promises. And so begins the inexorable melting of the tried and trusty gas-tax that finances our transportation infrastructure. Inadequate gas taxes, inadequate infrastructure.

Secondly, a VMT tax requires technology. And because cars and roads go everywhere, so too will this technology need to be everywhere. And therein lies the gold!

Unless you are a communications industry nerd, you’ll have missed a very short and far-sighted clause in the Economic Recovery Bill: smart-grid demonstrations projects – 50% of which will be financed by us, the taxpayers — must “utilize open protocols and standards (including Internet-based protocols and standards) if available and appropriate.”

Imagine if the VMT technology applied this same language. Instead of having a single purposed transponder in every car, you’d have a device that could communicate and interact with the also ubiquitous and also everywhere smart grid. Are you beginning to see the shine?

Imagine further, that at your own option, and thanks to the genius of the private sector, this device would be much like any smart phone or laptop. You could download any number of applications. In fact, you might consider this VMT infrastructure — end user financed because we want to pick our own devices to suit our own needs — to be the nub of a mobile internet.

And like the Internet, it is a network, routing data over cars, through smart grids, and throughout our environment, in a dynamic decentralized way. A network owned by no one, but powered by all of us. Just like the Internet.

And just like the Internet — remember the glow emanating from the late 90s? — this will be an economic engine like no other. Is this a fantasy? The military is using just this technology to connect people, tanks, and planes in a decentralized robust and secure network in Iraq right this minute.

What did our last President say? Bring it on! Bring on that VMT tax! But make it shimmer, turn it into real gold by requiring open standards, Internet protocols and opening up excess network capacity that is funded with our tax dollars. No, it won’t happen overnight. That only happens in fairytales.

Legislatively, we need to protect the rights of people to

1) Explicitly control the release of information about their movements in public space. This control must extend to both the amount of information released and the uses to which that information can be put (provided people are otherwise obeying the law), and

2) Be able to use public infrastructure (roads, trains, buses) without being coerced into releasing of private location information, i.e. options must exist to enable individuals to protect their privacy and use the service (like the ability to pay in cash instead of credit card).

Simultaneously, we need to be working on the technical strategy. In order to make the legislation and its requirements effective and reasonable, there need to be practical solutions to the problem of collecting usage taxes without violating privacy (read about some here). For the specific problem of mileage-based tolling, an easy solution is to simply rely on odometer readings. Although this is probably too crude for reasonable use, it does suggest the gold standard for privacy protection:

A privacy-preserving taxing protocol should reveal the minimum possible amount of information needed to achieve the policy goal, in this case the amount of tax owed.

Basically, unless there is explicit and open discussion now about how to protect the location privacy of drivers, we’re pretty sure that we will find ourselves living in a world in which there is none. Rather than reflexively opposing mileage taxes, it is far better to fight hard for a sensible national policy on privacy. It’s not just a matter of privacy while driving; the threats to location privacy come from all sides in our increasingly connected world.

This posting is co-authored with Andrew Blumberg and addresses many questions raised in this earlier article I wrote on “Tax for Driving? An Economic Engine.”

2010

For many years I’ve been attracted to the beautiful efficiency and widespread benefits of shared resources (cars, rides, networks). And over the last few years, I’ve been espousing the need for business and government to think more expansively about the web 2.0 phenomenon – where end users create content and value by building on a common platform (eBay, wikipedia, flickr, Facebook being some famous examples). We need to envision collaborative financing (lending circles), collaborative infrastructure (mesh networks), and collaborative consumption (car-sharing). It is time to push this idea and approach as far as it can go. A way to think about this approach is “cooperative capitalism.”

Here is the formula:
1. Identify excess capacity.
2. Build a platform for others to share/engage with this excess capacity.
3. Appreciate unanticipated benefits

Here is the formula:
1. Identify excess capacity.
2. Build a platform for others to share/engage with this excess capacity.
3. Appreciate unanticipated benefits

My favorite example at a city level is Bogota’s Ciclovia:

1. The Penalosa brothers (Mayor Enrique and Gil, Head of Parks & Recreation) noted that on Sundays traffic throughout the city was very light.

2. Every Sunday from 9am to 2pm, more than 72 miles of roads are closed to car traffic and open to pedestrians and bicyclists. Tens of thousands of residents get out and use the ‘new trails and paths’ every week. Cost to the city for this highly prized and transforming resource? Just the cost putting up and taking down the barriers.

3. Unanticipated benefits include a healthier population, a stronger community, and increased bicycle use every day of the week.

My favorite opportunity at a city & national level (see my TED talk for a big vision explanation):

1. The wireless devices being used for open road tolling (and in the future for congestion pricing and road pricing) cost about $28, are single purposed, closed, and in active use for about 30 seconds a month. That is a lot of excess wireless capacity!

2. Create an open source mesh (ad hoc peer to peer) communications platform that would turn the device in the cars into nodes (routing and repeating data bits). The software could also be used in all wireless devices (laptops, cellphones, pdas, traffic lights, smart utility meters, etc.), creating a mobile internet (collaborative infrastructure). Each person will have paid for his/her own device (collaborative infrastructure financing).

3. While spending what was required to do the task of open road tolling or congestion pricing and buying in a manner that used an open standard, and an open device, we have now made this investment leverageable for any number of innovative uses, created a robust and resilient nationwide network for local data transmission, and laid the foundation for the next economic engine for the US and world economies. I have a lot to say on this topic, best not here. Email me if you want to see the white paper.

We can glean from the above example some generalization principles that the US government should apply to the relevant procurements: require open standards, open APIs, give preference to responders that leverage existing infrastructure, investments, organizations – in other words – value and encourage cooperation among companies rather than reward closed proprietary systems that shut out such opportunities.

Examples at the corporate level would include Zipcar of course, which enables all the idle capacity of cars to be put to good use through its technology platform that makes sharing cars fast, easy, convenient, and cost-effective. Last year I visited Siemens New York office where the bulk of floor space has been turned over to cubicles that are not owned by any one person, but rather used as needed by its nomadic workforce that shows up in New York only periodically – dramatically reducing the amount of office space needed if each one of its employees had their own office. The unexpected benefits of open platforms abound — users can innovate, or point the way for innovation (see Innocentive.com for a new way of thinking).

And at an individual and household level, what can we lend and what can we borrow? What can we buy used, and what can we make sure we put back into the marketplace? Think of eBay as collaborative consumption.

This way of thinking isn’t bad for the economy. Remember that our starting point is that everyone is going to spend as much as they have to spend. We – families, companies, governments — all have so much we want to accomplish with such limited financial resources that the most logical, rational, profitable, and self-interested thing to do is to spend it as efficiently as we can: maximizing the benefit of each dollar spent, while minimizing the resource consumption. Since we know we are going to spend every cent, let’s get the most possible value out of that spending.

Think of our times. Cooperative capitalism is not just an interesting approach, it is an imperative.

*****

Blog posts are supposed to be short and to the point – that is satisfied by the above. For a little more background on why the current financial crises leads me to move from thinking that these are just interesting ideas, to a much stronger concept of “imperative,” read on.

We are living in a world of very precarious revenue sources at all levels of the economy – household, corporate, and governmental. Americans are at their lowest savings rate since the 1930s. In August, the GAO estimated the 2008 Federal deficit to be $410b, 3% of the GDP. The addition of the $700 billion bailout has the potential to double this to 6%. On October 1, our national debt passed $10 trillion dollars (that’s a 1 followed by an unlucky 13 zeroes).

And yet, despite our incredibly tight – and shrinking – budgets, we face spending imperatives of unparalleled proportions. In the US, the explosive highway and infrastructure building of the 1940s-1970s, are now meeting the end of their 30-50 year anticipated life spans. We have much rebuilding to do, just to stay even, and we have much new building needed to accommodate our growing population and 21st century transportation and communication needs.

We have an energy and climate crisis, that demand we rethink, retool, and build anew our power plants, our factories, our office, our stores, our homes, and our travel patterns. We have a broken healthcare system that without a fix will swallow the budgets of business and government, and then, despite those expenditures, leave many uninsured.

And of course, we Americans live in a world of 6.3 billion people, rising rapidly to 9 billion. And we all know this world cannot sustain the current use patterns many ‘enjoy’ if applied to everyone.

A friend of mine, Juan Enriquez, just gave his 20 minute analysis and prescription last week at PopTech, on the need for the next administration to start a program of austerity. He gives a compelling argument and has some nice visuals. And last week, Bruce Nussbaum blogged for Businessweek an opinion piece called “Zipcar Capitalism, a new economic model?,” an approach the author says he will bring with him to the World Economic Forum this week in Dubai. Both of these argument are running down the same path I am.

http://networkmusings.blogspot.com/2008/11/time-for-cooperative-capitalism.html