The rapid growth of technology will impact our lives in meaningful ways. At the same time it poses a challenge for state and local governments that are charged with establishing rules and regulations that often draw important revenue. We now have a glimpse of these new challenges in our state and beyond; drones are a regulatory hot topic in the town of Paradise Valley and Uber has been a challenge for state and city leaders across the country. The impact new technologies will have is a source of uncertainty and concern.
Along with my coauthors, I examine this challenge in a new report titled “Local government 2035: Strategic trends and implications of new technologies,” published by the Brookings Institute. Our report takes aim at the potentially disruptive and destabilizing effects of technology growth now and in the near future for state and local government. The full report can be seen at http://www.brookings.edu/research/papers/2015/05/29-local-government-strategic-trends-desouza
The proliferation of peer-2-peer services such as Uber, the growing use of drones and the development of self-driving vehicles are just the beginning. Local and state governments also face the challenge of what to do about private organizations amassing data from our use of computer and smartphone apps.
Consider the speed in which peer-2-peer networks have pervaded the market. These networks allow individuals to buy, sell, and share freely without an intermediary. One of the most popular is Uber, a network that allows individuals in 311 cities and 58 countries to ride-share through a smartphone app. Uber is a disruptive innovation for the public and private sector because it breaks up the traditional, regulated taxicab business and often puts forth a cheaper alternative for the public.
Questions about safety, taxing and other regulatory concerns have dogged Uber in many cities and states, Arizona included. Former Gov. Jan Brewer vetoed a bill last year over such concerns. But in April, Gov. Doug Ducey signed into law a bill passed by the Arizona Legislature allowing Uber to legally operate in the state. By dropping enforcement efforts in favor of growing cutting-edge business in Arizona, Governor Ducey and lawmakers showed that government can find better solutions instead of tripping over itself.
Government’s response to new innovations is important because the public will demand them and they can change citizens’ lives for the better. Consider how Uber has already altered travel decision-making. Mothers Against Drunk Drivers and Uber conducted a study on how transportation options modify driving choices, and they found that the existence of the app, as a cheaper taxi option, lessens the likelihood of individuals to drink and drive.
Saving lives and reducing DUI-related crashes is something to applaud. But from a pragmatic perspective, this technological trend will have another impact. Local governments will lose revenue currently generated by the licensing of taxis and the issuing of traffic citations. Similarly, this can also happen with the release of driverless cars.
It won’t be long before we see self-driving cars on streets and highways in Arizona. These cars will be equipped with cutting edge technologies that can identify signs, road widths, and roadblocks. Since these cars will be programmed to obey traffic laws, they will result in fewer accidents and traffic citations when they debut in as little as five years. That could reduce the need for traffic enforcement officers. It could also result in lower insurance premiums, which the state taxes at 2 percent, meaning less money for the state general fund.
Ensuring safety and protecting privacy rights are key issues facing the growing use of drones by businesses and individuals. Amazon and Google are developing drones for home delivery service. Photographers use them to capture wedding and real estate images. The town of Paradise Valley is currently working on a drone ordinance following a complaint by a resident. Governments must balance the right of businesses and individuals to fly drones with protecting the privacy of citizens and shielding them from harm.
How local and state governments respond to new technologies will be critical. The report we authored does not provide prescriptions for these challenges. Rather it presents clear-cut evidence of what is to come and urges policymakers at all levels to be proactive. That includes using the tools available now to design plans for the future.
— Kevin DeSousa is an associate dean for research at the College of Public Service and Community Solutions at Arizona State University and is a professor in the School of Public Affairs.