By Nicolas Colin, cofounder and partner at TheFamily

Sweetch, one of TheFamily’s most promising startups, is fighting a surprising enemy. The startup aims at making parking a better experience for San Franciscans—in San Francisco, 30% of all traffic is due to drivers looking for parking. Sweetch tells drivers where and when they can find a free spot, thus saving them the time and hassle that we all endure when we look for a parking spot.

San Francisco City Attorney Dennis Herrera has just sent a cease-and-desist letter to MonkeyParking a competing company that offers another mobile application related to parking. This development is quite obviously worrying for Sweetch and could jeopardize its chances to grow further in San Francisco, even though it offers a different service from MonkeyParking.

In fact there seem to be nothing illegal about sharing or even selling parking information. The San Francisco Transportation Code doesn’t prohibit selling information about parking spots. Therefore the City Attorney doesn’t mention the Transportation Code, but a section of the Police Code related to  “Obstructions on City Streets and Sidewalks”, as if legally parked cars were like litter and debris “obstructing” the streets! Certainly nothing in that code was drafted with the intent to stop drivers from sharing parking information about when other drivers leave their parking spots. 

The City Attorney’s recent action against MonkeyParking looks like gross overreaching on the part of the city’s authorities and reveals a broader trend to try and nip young startups in the bud before they grow strong enough to become a threat for established businesses. It’s hard to fight against giants like Uber and AirBnB. It’s easier to prevent startups from growing while they’re still so fragile.

If budding startups are prevented from innovating, San Francisco’s ecosystem could become like France’s. Instead of coming forward with radical value proposals, companies may all end up focusing on and investing in efficiency innovations. Efficiency innovations are all about business as usual, only cheaper. They reduce the cost of making and distributing existing products and services but lead to the destruction of jobs and impede disruptive empowering innovations, which is why Clayton Christensen believes they’re the “wrong kind” of innovation. “Efficiency innovations pay off really quickly while empowering innovations take five or more years to pay off”, notably because they go against existing regulations!

French entrepreneurs are used to being beaten by the influential lobbies of established businesses in France; because it’s impossible to go against the status quo, none of our startups ever makes it to growing into a giant. In fact, it takes American companies to challenge incumbents in France—Uber’s fight against the Parisian taxi lobby testifies to it, so does the current trial of strength between Amazon and Hachette American companies owe this fighting spirit to the fact that they initially grew up in an ecosystem that promotes innovation instead of the status quo. 

What French entrepreneurs are not used to, is to encounter these problems in the US, as they usually emigrate and settle in the Valley precisely to escape regulatory hassle—as did Lending Club, which successfully raised a lot of money and is soon to launch an IPO. 

The truth is, incumbent rent-seekers do have powerful lobbies even in the US. The oil industry tried hard to stop Governor Schwarzenegger from passing more stringent green air legislation in California. The taxi industry tried hard to fight Uber and Lyft. But innovation usually wins in the end when it’s in the users’ interest and because the public supports it. Somehow, the American political system manages to give innovation a chance, and it explains the better shape of the US economy as compared to ours.

As they are targeting early-stage startups searching for their business model, California’s public authorities may really be about to start opposing innovators and protecting rent-seekers. The pressure caused by a difficult real-estate market  which makes the tech sector suddenly unpopular, is one of the reasons for this. If they go on though, California will look more like Texas  as unequal as today (if not more) but with less social mobility and fewer life-changing opportunities.