Meet Stae, a New York-based startup that wants to make cities and tech startups work together. Major cities are getting denser and facing bigger challenges. And yet, innovation is coming from private companies. These companies are starting to have better insights about how a city works compared to local governments.
This is happening for many areas. Public transportation (or at least the last mile) is getting privatized by Uber and Lyft with their offerings getting cheaper. Similarly, Airbnb knows more about the tourist industry than any hotel or local government. And you can even go down to the infrastructure level with water and electricity companies now collecting tons of data.
This trend is accelerating as more companies are going to generate data. Soon, self-driving cars are going to replace existing cars for instance. There are potentially millions of data entries about cities, and city officials are missing out. As a city manager, you could know where your citizens are going, where your tourists come from (and where you should advertize), etc.
“Cities should be collecting all the data these companies are generating — Airbnb, Uber, drone delivery, Google self-driving cars. You can run analytics and look at the efficiency of the city,” Stae co-founder John Edgar told me.
And this is exactly what Stae wants to do. The startup is building a platform so that all the companies can send their data to this platform using an API approach.
Edgar realized cities need something like this after reading Triumph of the City by Edward Glaeser. And he thinks most people (including people working in tech companies and local governments) are clashing over multiple issues. There’s a way to make everyone work together.
Here are two interesting examples. Cities want to collect taxes for each Airbnb stay like they do for hotels. But right now, there’s no tech platform to enforce this rule. Airbnb can’t send checks every now and then — it’s not a scalable solution.
In return, Edgar dreams about a city where you can buy a bus ticket and it includes a last mile ride with Uber or Lyft. A platform approach would be a win-win for everyone involved.
But we’re not there yet. That’s why Stae is starting with a compliance and payment platform for the sharing economy. Stae wants to create an API that would let Airbnb seamlessly pay (for example) $.75 to the city for a one night stay. The startup would keep a cut of the transaction. This way, Airbnb doesn’t have to negotiate with each major city, and cities will be able to enforce their new pieces of legislation.
“We managed to get Boston to commit to this. We’ve also had so many conversations with so many other cities that are suffering from an inability to understand what to do with technology,” Edgar said.
And this is just the first step as you can imagine many more applications once you have built a central platform that connects cities with tech companies. Stae is going through SOSV’s Urban-X accelerator. And, as Edgar mentioned, Boston is the first partner city to test the platform.
Over the past decades, smart city has been a recurring buzzword among local governments. But creating a smart city by upgrading the infrastructure is a lengthy, expensive and imperfect process. Meanwhile, tech companies are redefining the fabric of our cities without any government’s involvement. And this is where Strae comes along.
“A lot of people talk about smart cities, but what we’re building is actually the smart city,” Edgar said. “They just need a way to host everything centrally.”