YouSaid · the spoken record

Logan Green

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29
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2017-09-26
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2017-09-26
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  1. As we get into autonomous vehicle technology, as we're able to be more efficient with filling up the amount of cars that are on the road and combined with the fact that we're seeing a clear decline in car ownership, well, if you're more efficient on how you're transporting people around, then all the parking spaces you see on the side of the streets, the parking lots, one of our co-founders, John Zimmer, noted that if you were to take all the parking spots in America, it would fill the entire state of Connecticut in more. That's an amazing amount of space that we can repurpose if we're able to crack the inherent inefficiency in ground transportation. We're on the verge just the very early steps of doing that is going to be a lot of fun over the next few years.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  2. Yeah, and anyone who's entertaining doing that in order to get an advantage has obviously got a bigger problem. You should not be using GR as an assault weapon on your opponents unless it is necessary to be able to survive and sell your product, right? There's a difference there.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  3. It's extremely tricky to try to get a competitive advantage in an industry where operationally you are so similar to your competitor. And even if there are opportunities, I think they're very fraught with risk. You know, what you try to push for that may advantage you today may be used against your disadvantage tomorrow. So ultimately, I don't think there's really any way to get a competitive advantage when you are in the same sandbox.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  4. Actually, quite the opposite. Yes, we had a broad roster of consultants, way more consultants than we had internal members of the GR team. But because it was so critical for us to make sure that we are out there really explaining not just coming in and saying, hey, this is what we need. We're not going to tell you why this is what we demand, but doing so in a way that explains, that builds champions, that builds elected officials who can see why it's in their interest. have never and never have and never will just rely on another company to try to accomplish what is best for our industry. We strongly believe that it is critical that we are involved in every one of these conversations.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  5. That Houston put out there because they believed, and rightfully so, that hey, a company can clearly operate under this framework so there can't be anything wrong with it. There is a chance as an industry to draw a hard line there. And I do believe that that led to more difficulty over the next couple of years than it would have if as an industry we had maintained a hard line. This type of regulation does not work for this industry.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  6. Great question because the reality is that even though we may view ourselves extremely differently as companies in terms of what we're trying to accomplish and what we're about, we do play in the same sandbox and we're on the same side of the vast majority of core policy issues. So you do tend to agree on what from a policy perspective needs to get done. However, there may be vast differences in opinion as to how best to accomplish that. One of the hardest decisions that we had to make as a team back in 2014, which is our first decision to leave a major city, one of the first cities that was developing an ordinance was the city of Houston. And ultimately, the ordinance that they developed was not one that we felt worked. And we had to make the very difficult decision to pull out of that city. Our competitor did not make that decision. In the long term, I would dare say that the decision for our competitor to stay in that city actually led to more cities and more jurisdictions trying to follow the lead.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  7. So another thing that a lot of companies encounter is you are not the only player in your market. So you're coming up against regulation, but other companies deal with other competitors, sometimes who are trying to create a regulatory moat to stop competitors from getting in. Other times two companies are so similar, it's hard to think about how one company can win on the regulation front while the other loses. So how do you think about working with or alongside competitors?

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  8. Mean giving someone a path to success? It means you have to allow people to win. And elected officials, their job is to advocate on behalf of their constituents, so you have to work with them to find a way so that you have a shared common goal. And so many elected officials care a great deal about reducing congestion, or they care a great deal about reducing drunk driving, or they care a great deal about economic empowerment for certain communities. There is a win for everybody by finding that common ground and just going in and bulldozing. You may win one or two that way, but they talk. That's the other thing. You have to go Where legislators and policymakers gather, that entire circuit of basically clubs and socializing events like the Republican governors association, the U.S. Conference of Mayors, where lawmakers and policymakers

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  9. And I think really important building on that is you've got to give policymakers a lot of credit here, like 44 state bills. Plus the District of Columbia. And a lot of that was policymakers taking us at our word that we are building an alternative to vehicle ownership, which deserves an entirely different regulatory existence than taxis do. And they did. But the other thing I would say is you always have to give people a path to success. It cannot be a zero-sum game where we win the elected.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  10. And that really drives, and then ultimately that drives the answer to your question, which is well, you know, how much honey or vinegar do you use in terms of trying to deal with elected officials? It's really all about that fundamental goal. I mean, what is going to lead to a framework that is going to work for this industry in this city or in the state? And ideally, we would like to do that cooperatively, but at the same time, if we're faced with framework that is not going to work, we have to take the gloves off.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  11. But in this case, as a matter of precedent, if you have, let's say, six places that have decided to legislate this area, three have come up with laws that work, and three that have come up with laws that don't need your operating in both, then the likelihood of the bad regulatory framework moving forward is that much more increased. So you have to draw the line. And that's the case ultimately that we had to make internally to the business that this may be a short-term pain for us, but in the long term, as we only have one chance to really get this framework set up, you have to get it right.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  12. You're dealing with a new industry like ride sharing that has not yet issued any sort of legislation or regulations, that that framework has not yet been created, you have, in my opinion, really one chance to get that right. If you have one law on the books, then the next place is going to look at that one law. And then you have two laws in the books and the next three places are going to look at those.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  13. Most people learn about these issues through the media, and the media will find a driver on option A, a driver on option B, and then any number of stakeholders will come and purport to speak on behalf of drivers. Drivers are the best champions having those conversations right in front of elected officials is crucially important. And it's turning bodies out to stand in line, take time out of their day. That's hard.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  14. The more contentious markets where it becomes pretty clear that there is a fairly over effort to protect the incumbent industry, we'll have to raise the stakes a little bit to turn out not only our passengers and our drivers, but strategic partnerships. As an example, the Urban League saw a commonality of purpose and of what we were trying to do, unlock areas and communities that were previously underserved by transit, people who ordinarily did not have good access to transportation and lower income neighborhoods now do. So in a particularly difficult city, we now have our driver speaking for themselves or passengers, but we now have the urban league weighing in other organizations can help carry the message that this is bigger than the way the mayor or the city is looking at it. So we're able to make it bigger than just us.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  15. If we did not pause the through threat, either penalties the drivers would face or other things are not worth risking, then how do you as the government relations team deal with the rest of the company? What we've heard from a lot of companies are they don't want to have either the government relations people or the lawyers living in the land of no. If you are saying no all the time, you're not going to grow and build the business, withdrawing from market is one option. So what are the other things that strategies to address these concerns?

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  16. There's a difference here a little bit versus a lot of our peers or other folks in the tech industry. As a physical product that people engage with every day, when it goes away, it has major impacts. Have been times when we've had to make the choice, often talking with drivers about what's best for you to pause in markets. That's a pretty crazy thing, right? You are removing a thing from the market generally because

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  17. If there's ignorance or lack of understanding, we are willing to spend the time and the energy and the effort to try to change your mind because we believe so strongly in what we're trying to do that we can change your mind if you are willing to keep an open mind. But if you are determined to protect an incumbent industry and that becomes clear, then that does change the nature of how we engage. And we have definitely encountered those situations.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  18. It's taken a lot of time in education, but we're now at a point where we have 44 states plus the District of Columbia that have essentially adopted the background check process that we came up with before we were regulated anywhere in the country. Same thing with the insurance. There is now a model insurance regulation that has been adopted pretty much all across the country that pretty much tracks what we initially came up with on our own.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  19. You try to take yourselves out of your own myopic point of view from within the industry, right? And take a look at it from the outside. If I'm that regulator, what am I concerned about? I'm concerned about, you know, the quality of the cars, the quality of the drivers, if there is an accident, are the passengers going to be taken care of? How do we make sure that people are getting into the correct car? These are all questions that we anticipated and we built in answers to those questions in the development. First of all, we created a new form of insurance that was basically higher than any insurance for taxi passengers across the country, that a type of insurance that never existed before our industry was created. So we came out of the, we came out of the box with that not having being ordered to or told that we had to do this. We did this of our own volition. We also recognize kind of the core aspects that of legitimate regulation, right? How do you make sure that the drivers are safe? Well, cities may have a particular process that they typically do.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  20. Yeah, it's a great question. It's kind of an obvious thing to say, but you can either let your impact on the community be defined or you can work to define it yourself. So one of the things our team did as we were building out the public affairs team, we incorporated a research function. So we have two full-time researchers on the team. They produce an annual economic impact study. And via that learning, we found out we add three quarters of a billion dollars in local spending to communities. We've cut 100 million hours off people's commutes, et cetera. So we have these demonstrations once we are in a community regulated, the transit departments come out of the woodwork and they want to use us to help solve the last mile, first and last mile problem. Our team built out an entire transit partnership, which we never envisioned when we first started. The point is build your case understand your numbers and then be prepared to adapt as you move forward and figure out what is the best case.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  21. Fly to Nashville and then you fly to Nashville again, and then the next week you flat to Nashville again and again and again. We're engaging with the mayor, but also with the head of the Department of Transportation there. But in the meantime, we also are partnering with organizations who recognize the benefit of ride sharing. Our launch teams are already building out a driver community where they're signing up drivers. So we are already have a broad base of people that we can mobilize when the time comes.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  22. You should have your policy team that owns the relationships with elected officials, negotiates the final details of what the law will be, and then you'd have a public affairs team, which is building the campaign in the atmosphere around those negotiations in such a way that they can be as successful as possible.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  23. That's right. Their job is to both open doors and introduce you to decision makers, but also let you know how far you can go before you will erode goodwill in the community. And that can be a fraught relationship. That's really kind of where the art is, I'd say.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  24. Some cities have a strong mayor system. Some cities have a weak mayor system. Some cities don't have mayors at all. In addition to the stakeholders Joe talked about, you've got attorneys general. You've got governors. You've got folks at the State House. So you go into a market and you build the team based on what the market looks like. The most important thing to remember, though, about the policy folks, God bless them all, is they have two clients. One client are the folks that are paying them and engaging with them. So that would be us. The other client and perhaps more valuable, always more valuable, are the relationships with the electeds. And so there's always a tension between how hard you can have the consultants work on your behalf, sometimes a very uncomfortable situations, before they will go no further and not burn budgets because it's a repeated.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  25. We have to be able to answer that question before we can do anything. We're talking about a mayor, a city council member, or all the city council members, maybe the city manager or the city attorney. If the agency that tends to regulate for higher transportation is, let's say, the Department of Transportation, more often than not, we're going to be engaging with the director of that department.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  26. You find consultants in markets that you don't have any specific experience, and so they can tell you what the lay of the land is. We relied on them to open the door and to point us in the right direction. We felt it was important that we were the ones who were conveying the story. No one can really tell the story of what we're trying to build better than we can. So let's take a city like Nashville. We started engaging in Nashville in fall of 2013. The consultant put us in contact with the transportation department, put us in contact with the mayor, with council members to first off explain what we are. what are we, what are we trying to do? Literally, we were getting the question every single day. So you expect me to get into a car with a stranger. Right.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  27. It's a fair question. I think the difference, though, is so, whereas, yes, a company might say yes, we're helping all sorts of people, or do they really have the ability to mobilize that and to convey that the importance of what they're providing to the decision makers and to the elected officials? I mean, I'm thinking of a couple of instances where we've had email campaigns that have literally accidentally, but shut down a city's email server because there were so many citizens writing in so much.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  28. We built it like a campaign basically. Folks that have worked on political campaigns in the past at the federal, state, and local level, the most important part has always been the community, folks that can get out there, engage with drivers, engage with other stakeholders, turn them out to hearings, get them to testify before the California Public Utility Commission or anywhere else in the political process. Companies advocating for themselves have very little power, self-interested, not very sympathetic. You have to find a way to make that connection with the constituents. And unless you can do that in a meaningful way, you're not going to have much access.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source

  29. Really viewed our first mission as education, explaining what we were, and possibly more importantly explaining what we weren't. So we didn't have the historic relationships with mayors. We didn't have a history of contributing to campaigns. What we did have was a broad universe of people both on the driver and the passenger side who recognized that this new innovation is extremely important to me.

    2017-09-26 · a16z Podcast · a16z Podcast: The Case Study of Lyft and Local Governments · IDENTIFIED FROM THE TRANSCRIPT · source