Tag: apps

Innovating Within an Overregulated Alcohol Landscape: A #CatoDigital Discussion

April is Alcohol Awareness Month. What better time to take a close look at one of our nation’s most heavily regulated industries and the inventive ways entrepreneurs are innovating within this realm?

The ratification of the 21st Amendment may have officially ended this nation’s failed experiment with alcohol Prohibition, but the policy hangover has had lingering effects. From dry counties to bans on Sunday sales, the sale of alcohol is severely restricted in a confusing patchwork of local, state, and federal regulations. Homebrewing was not legal in all 50 states until 2013 (and homebrewers still cannot legally sell their product). Eighteen states maintain a state monopoly over the wholesaling or retailing of some or all categories of alcoholic beverages. But, even in this stifling economy, intrepid businesses are finding new ways to serve thirsty consumers.  

One real-world example of this is Klink, formerly known as DrinkDrivers, a rapidly growing start-up with a strong foothold in the nation’s capital. The app-based alcohol delivery company relies upon the mechanisms of the sharing economy—which has faced its own share of difficulties from overzealous regulators—to navigate the treacherous legal landscape of the American alcohol industry.

The concept behind Klink is a simple one: modern consumers want the ease of on-demand goods and services, deliverable at the touch of a button, wherever they are. Yet, Klink is not an alcohol provider in the traditional sense.

Unlike many other businesses in the sharing economy, Klink is stringent in its adherence to the laws and regulations governing alcohol sales. When you place an order, the company does not itself process your payments or deliver your alcohol. Instead, Klink plays the role of middleman, partnering with licensed liquor retailers, providing an easy-to-use online platform to connect alcohol providers with customers and occasionally running localized marketing campaigns.

Tomorrow at noon, I’ll be moderating a live-streamed lunchtime discussion featuring my colleague Matthew Feeney, who is Cato’s leading expert on the sharing economy; David Ozgo, the Distilled Spirits Council of the United States (DISCUS)’s Senior Vice President of Economic & Strategic Analysis; and Klink’s Founder and CEO, Jeffrey Nadel.

We’ll be discussing the ways in which Klink is navigating the treacherous regulatory waters of both the sharing economy and the alcohol industry, the regulatory hurdles standing in their way, and what this means for the future of tech innovation and alcohol sales. The panel will be live-streamed, and at-home viewers are encouraged to participate in the Twitter discussion—and tweet their question—using #CatoDigital.

The Miracle that Is the iPhone (or How Capitalism Can Be Good for the Environment)

Last week I asked a friend of mine if he could recommend a good white noise machine. “Why don’t you,” he responded, “download an iPhone app instead?” I did and the app works just fine. That got me thinking: what other gadgets do I no longer have or could do without thanks to my iPhone? I put together a short list and asked Lauren Kessler from Cato’s art department to create the lovely graphic below. Of course, “dematerialization,” or using less material and energy to produce more goods, is not new. As Ron Bailey writes in Reason,

Jesse Ausubel, director of the Program for the Human Environment at Rockefeller University and Paul Waggoner at the Connecticut Agricultural Experiment Station, show that the world economy is increasingly using less to produce more. They call this process “dematerialization.” By dematerialization, they mean declining consumption of energy or goods per unit of GDP. In a 2008 article in the Proceedings of the National Academy of Sciences, Ausubel and Waggoner, using data from 1980 to 2005, show that the world is on a dematerialization binge, wringing ever more value from less material.

No, I am not claiming that because of the iPhone all the gadgets that I have listed below will totally “disappear.” People will still prefer to have their weddings shot by a professional photographer using sophisticated camera equipment. Many people, however, will never need to buy a camera or video camera (especially as the iPhone and similar products become better at taking pictures and videos) and that will save resources.

Dematerialization, in other words, should be welcome news for those who worry about the ostensible conflict between the growing world population on the one hand and availability of natural resources on the other hand. While opinions regarding scarcity of resources in the future differ, dematerialization will better enable our species to go on enjoying material comforts and be good stewards of our planet at the same time. That is particularly important with regard to the people in developing countries, who ought to have a chance to experience material plenty in an age of rising environmental concerns.

Maybe I am too much of an optimist, but dematerialization could also lead to a greater appreciation of capitalism. Namely, the “profit motive” can be good for the environment. No, I am not talking about dumping toxic chemicals into our rivers, which is illegal and should be prosecuted. Rather, I am talking about the natural propensity of firms to minimize inputs and maximize outputs. Take the humble soda can. According to the Aluminum Association, “In 1972… a pound of aluminum yielded 21.75 cans. Today, as a result of can-makers’ use of less metal per unit, one pound of aluminum can produce 33 cans.”

PS: If there are other gadgets that you no longer find essential thanks to your iPhone, let me know and we will expand our graphic accordingly: mtupy [at] cato.org

Want Privacy? Nevermind. We Want to Censor!

Senator Chuck Schumer rounds out a trifecta of bloggable moments from the Senate Judiciary Subcommittee on Privacy, Technology, and the Law’s hearing this morning.

Ignoring the subject of the “mobile privacy” hearing, Schumer queried the witnesses from both Google and Apple on whether they will accede to his demand that they reject certain “apps” on Android phones and iPhones. The applications Senator Schumer dislikes alert people on their mobile phones to the locations of DUI checkpoints.

Senator Schumer says these apps “allow drunk drivers to evade police checkpoints,” but that statement fails to include other parties who might rightly wish to avoid police checkpoints—such as law-abiding citizens who wish to live free in this country, for example.

Recently, I landed at Harford’s Bradley International Airport late on a Friday night, heading to a Saturday morning meeting in Northampton, Massachusetts. From my shuttle bus to a remote rental car area, I saw a DUI checkpoint. After I completed the arrangements for my car, I asked the agent how I might leave so as to avoid the checkpoint. I wanted neither the delay nor the impingement on my sober liberty that a police checkpoint represents. He cheerfully directed me to a route I could freely travel.

Senator Schumer wants to prevent conversations like this from taking place on a mass scale, facilitated by advanced technologies. He stands a good chance of succeeding—RIM has already given in—because Google and Apple have repeat business before the federal government. Senator Schumer can raise their regulatory costs far higher than the value of allowing minor, but controversial apps on their systems.

If Senator Schumer succeeds, our right to freely and efficiently communicate about police activity will diminish in a way that is effectively insulated from First Amendment challenge. Privacy and freedom be damned. There are drunk drivers to catch.