Balancing regulation with innovation

As the Legislature hurries to complete its final month of work for the year, the Capitol is humming with activity as legislators present and vote on hundreds of bills, advancing them to the governor’s desk.

In the case of each bill, the Legislature’s responsibility is the same: To carefully consider its policy merits and its long-term impacts on regular Californians, our economy and our state’s future.

This is particularly true when it comes to issues relating to new, innovative business models that had yet to even be conceived when our state’s existing legal and regulatory structures were put in place. As our economy has evolved, the Legislature has had to carefully consider the best ways to update our laws in a way that supports innovation, continues to protect Californians and maintains a coherent regulatory process.

Across California, innovative companies are rethinking how to move within and between cities, how to deliver products and services more quickly and efficiently.

We’ve seen these issues arise across many industries, from cyberbullying to ride sharing to home sharing. And although each industry is different, one thing has been clear across all of them: developing the right policy and regulatory framework for these new business models takes careful consideration and a thoughtful approach that engages a wide range of stakeholders, examines both intended and unintended consequences and ultimately yields a holistic approach that modernizes the law for the industry as it stands today and provides flexibility for the industry as it continues to evolve.

Now, as new business models emerge in the food, beverage and alcohol industries, it’s no surprise that the Assembly and Senate have considered a number of bills relating to consumer and public safety in these arenas over the course of this legislative session. For example:

• AB 626 requires Californians who sell salads, hot meals and other prepared food made in their own home to report details about what and when they are preparing and selling this food.
• AB 836 allows the California Department of Public Health to grant exceptions to certain food safety laws for specialty vending machines like juice distribution systems that dispense raw, cold-pressed juice directly to consumers.
• AB 1461 creates new food handler card requirements for companies that offer subscription-based food packages and adds a new layer of local regulation, in addition to existing state and federal food safety regulations.
• SB 254 creates new Department of Alcoholic Beverage Control requirements for online and app-based companies that deliver alcoholic beverages, above and beyond requirements already in place for traditional delivery companies.

Each of these bills deals with consumer safety in vastly different ways – whereas some loosen food safety laws for companies that deliver directly to customers, many layer on more, often duplicative regulations that don’t actually make customers any safer. Whereas some expand the role of state regulators in addressing consumer safety, others expand the role of local regulators, blurring the lines between regulatory agencies and who should actually be responsible for – or is even capable of – ensuring Californians’ safety in that particular industry.

Given the speed at which our economy is evolving and the ways in which new business models are changing how companies serve their customers, it’s no surprise that some of these very issues are on the agenda for the California Conference of Directors of Environmental Health’s upcoming annual conference on “Protecting Environmental Health in a Rapidly Changing Society.” It’s a testament to the fact that even regulators themselves have more work to do to better understand the issues at hand and determine the right way to approach consumer safety in, well, a rapidly changing society. And it’s a reminder that our state is only at the beginning of this conversation – so it makes little sense for the Legislature to pre-empt those conversations, especially when the bills being debated deal with these issues in such a haphazard, sometimes contradictory way.

Across California, innovative companies are rethinking how to move within and between cities, how to deliver products and services more quickly and efficiently, and even how to shop for groceries and enjoy a home-cooked meal. This kind of outside-the-box thinking has defined California for decades and made us the epicenter of innovation, and it’s critically important that we approach these questions about consumer safety in a holistic way that protects Californians without squashing that spirit of innovation.

By taking a step back on some of these bills, we have the opportunity to foster the robust discussion California needs to ensure our health and safety laws truly protect consumers; encourage growth, investment and competition; and result in Californians having more choice and access to the benefits of new technology both now and in the future.
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Ed’s Note: Kish Rajan is chief evangelist for CalInnovates, a technology advocacy coalition comprised of technology leaders, startups, and entrepreneurs.