Entrenched industries have never liked the “sharing economy”.
Solar leasing company Sunrun has faced more hurdles than most from big utilities.
Entrenched industries are working tirelessly to save you from the new products and services you want. As established companies stifle innovation in industries as diverse as energy, housing, and transportation, entrepreneurs are increasingly finding themselves fighting not only to win customers, but also the hearts and minds of the very legislators and regulators whose campaigns have often been funded by…you guessed it, the established companies.
In 2007, I co-founded Sunrun to tackle one such engrained industry: electric energy. We developed a way for families to get rooftop solar power without incurring upfront costs or having to understand solar technology. We choose the equipment, foot the installation cost, and charge monthly for the power these systems generate, as a utility might. In 11 states, the average Sunrun family typically pays us 15% less than they used to pay their monopoly utility.
Utilities don’t like this. Since co-founding Sunrun six years ago, we’ve had box seats to stunningly brazen attempts by utilities to squash our business. And the rooftop solar industry is not alone in these battles. Like Sunrun, many innovative and creative business models emerged from the economic recession to shape a multi-billion dollar “sharing economy” characterized by what we at Sunrun call “disownership.” Companies like hotel alternative Airbnb, taxi alternative Uber, and car ownership alternative RelayRides, are just a few–and they face similar attacks.
But how far will companies go to protect their franchises from open market competition? Further than I ever thought imaginable.
UTILITIES THROW DOWN
An early eye opener came in 2010, when Pacific Gas & Eclectic (PG&E) sunk $30 million dollars into a ballot initiative that would have changed the California state constitution, effectively restricting competition from municipal power programs, such as San Francisco’s community choice aggregation program.
More recently, California utilities have tried turning consumers off to solar by framing it as a race issue. Despite the fact that two-thirds of California home solar installations now occur in low and median income neighborhoods, utilities walk the halls of Sacramento pointing to decade-old data suggesting solar is only for the rich.
Arturo Carmona, Executive Director of Presente.org, said in August of this year, “The utilities are trying to get Latino leaders to support efforts to obstruct California’s rooftop solar growth. California Latino voters support rooftop solar by wide margins. Latino leaders in the state legislature should listen to Latino voters instead of siding with the big utilities.” Presente.org is a national organization whose mission is to amplify the political voice of Latino communities.
Most utilities hold a monopoly on how people get electricity. Unlike normal companies, regulated utilities are allowed to set rates as high as is necessary to earn a guaranteed profit on the infrastructure they build (transmission lines, power plants, etc.), no matter the cost or reliability. Utilities have become so good at arguing for this profit that even in today’s low interest rate environment, their guaranteed return is typically 10% or more. The theory behind the guarantee is that utilities need to attract billions of dollars to maintain the grid. At the same time, banks today have access to nearly unlimited capital despite typically earning lower returns, which are notoriously not guaranteed. Why should public utilities have it better than Wall Street banks?
The Latest on: Disownership Economy
- Urban Sustainability and the Sharing Economy on October 10, 2016 at 1:07 am
The sharing economy allows people to spend less and still have quality experiences. In some cases, it even allows them to gain access to new services they wouldn’t have been able to afford previously. This new trend of ‘disownership’ gives ... […]
- Conventional regulations won't work for 'sharing' economies on April 15, 2016 at 2:28 am
In some cases it is just another transition of capitalism into a “new” economy. So the whole idea of disownership, where people own less and share more — also called “collaborative consumption” — is no longer true in many cases. For example ... […]
- Safeguards for Economic Liberty 'Spook the American Left' on August 20, 2015 at 11:54 am
Related: How Libertarians Are Changing Conservative Views on Economic Liberty and the Constitution Damon Root is a senior editor of Reason magazine and the author of Overruled: The Long War for Control of the U.S. Supreme Court (Palgrave Macmillan). […]
- Extreme minimalism: When less really is more on November 5, 2013 at 4:00 pm
The concept of “disownership” is on the rise in America, with more and more people leaning towards a more minimalist lifestyle approach. A side effect of the “access economy” and ... The clearest marker that minimalism is here to stay? […]
- Sunrun Survey Finds Nearly 92 Million Americans Plan to Participate in “Disownership” this Summer on June 11, 2013 at 4:47 am
An earlier survey, conducted by Harris Interactive on behalf of Sunrun in February 2013 2, found that 83 percent, or 195 million Americans 3, would participate in disownership if they could do so easily. Smart Summer Savings As millions of Americans begin ... […]
- Disownership is the new normal: the rise of the shared economy (infographic) on April 3, 2013 at 6:46 am
The study was commissioned to gather data on how consumers participate in the “access economy.” The rise of disownership is an important national trend, as well as a tech/startup trend. The shared economy is not only about leveraging under-used ... […]
- Migrant labour system lies at heart of mine unrest – Hartford on October 8, 2012 at 8:01 am
JOHANNESBURG (miningweekly.com) – The migrant labour system, which has remained largely unaltered in the post-apartheid period, lies at the heart of the South African mining industry’s current economic ... management disownership of employee ... […]
- The Statist Propositions of Protectionism on June 25, 2012 at 5:00 pm
It is ownership and disownership that serve as the foundation of libertarian social theory, and also serves as the foundation of free-market economic theory. The collectivist begins with the concept of the state as the final authority. Libertarian theory ... […]
- Ghana: Dagbon Chieftaincy Crisis: A Sad Saga of Animosity, Vendetta, And Disunity on April 3, 2005 at 5:00 pm
Without peace, security, and cooperation there can not be any meaningful socio-economic development in Dagbon ... are normally issued with threats of curses and parental disclaim/disownership. These young men and women were not even conceived by their ... […]
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