Technology
Kyle Bean for Fortune

Data Sheet—Sunday, October 30, 2016

Oct 30, 2016

Following rules is one of Silicon Valley's least favorite activities.

So it was perhaps no surprise when Comma.ai, an autonomous driving startup, announced on Friday it was killing off its original product after the National Highway and Traffic Safety Administration inquired into its safety.

“Would much rather spend my life building amazing tech than dealing with regulators and lawyers,” founder George Hotz tweeted from Comma.ai's official account. “It isn't worth it.”

Of course Hotz's company, which raised $1 million in funding from venture capital firm Andreessen Horowitz, can't really avoid all those “regulators and lawyers” if it really wants to build transportation products. But it's only the latest example of how Silicon Valley's status-quo shattering perspective can rub up against real-world regulations.

In the past year we've seen particularly egregious examples of when this otherwise useful point of view goes awry. There's the downfall of blood-testing company Theranos, now in a nest of regulatory trouble including a two-year ban on its founder from operating a lab. There's human resources software company Zenefits, whose former CEO stepped down after it was revealed that he had built software to help employees skirt California insurance licensing requirements. Ride-hailing giants Uber and Lyft continue to battle high-profile lawsuits over their classification of drivers as contractors instead of employees; home-sharing leader Airbnb is engaged in lawsuits against San Francisco and New York City over new regulations passed to enforce existing regulations that officials say it's not complying with.

But you can see Silicon Valley's point of view, too. Some of these regulations were clearly created to protect existing industries rather than the customers they serve.

Could government use a big dose of efficiency and more flexible regulatory frameworks? Absolutely. But moving fast and breaking things—once Facebook's corporate motto and a Silicon Valley mantra—shouldn't end with broken bones. As Comma.ai's founder said himself: It isn't worth it.

Kia Kokalitcheva

@imkialikethecar

kia.kokalitcheva@fortune.com

This is the Startup Sunday edition of Data Sheet , Fortune’s daily tech newsletter, edited by reporter Kia Kokalitcheva. You may reach me via Twitter, email, or an entirely new platform that your startup developed. Feedback welcome.

Everyone's Talking About

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Unicorn Watch

A U.K. tribunal says Uber drivers deserve certain workers' rights. A ruling in a lawsuit brought by two drivers could threaten the ride-hailing company's business model, which classifies drivers as independent contractors. (Reuters)

Uber wants flying cars. The ride-hailing company published a white paper outlining its vision for a future with flying cars, though it says it doesn't want to build those vehicles itself. (Fortune)

Palantir is open to going to public. After notoriously opposing going public for years, the secretive data-crunching company is now considering the idea as it nears profitability and wants to retain its best employees. (Fortune)

Lyft will complete 17 million rides this month. The company is still growing, will eventually go public, and may do away with its signature pink mustache logo, Lyft's president said this week. (Fortune)

The Week in Startups

Why These Artificial Intelligence Startups Joined Salesforce, Amazon, and Uber (Fortune)

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How Zendesk Is Looking Beyond Customer Service With These New Apps (Fortune)

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Leaked Hyperloop One Docs Reveal The Startup Thirsty For Cash As Costs Will Stretch Into Billions (Forbes)

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Verizon Is Buying Jason Kilar's Video Startup Vessel and Shutting It Down (Recode)

Our Favorite Startups From 500 Startups’ 18th Class (TechCrunch)

Words of Wisdom

"Every startup requires a leap of faith, an emotional act that’s not pure reason, and that’s got to carry you through in the inevitable many months, sometimes years, of horrific bad stuff that comes with the company."— Redpoint Ventures partner Tomasz Tunguz on founding a startup, an adaptation of another investor's words. (Tunguz's blog

One More Thing

Company Town. A new documentary takes a look at the rise of the tech industry in San Francisco and the industry's increasing demand for power as it alters its home. (Roxie Theater)

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