Ready or not, the driverless car era is upon us. And depending on whom you ask, some are more prepared than others to embrace automated vehicles.
Manufacturers—eager to establish themselves as top players in the emerging market—are investing billions of dollars in research and development and spending millions on government lobbying.
States, meanwhile, are rolling out competing autonomous vehicle regulations as they court technology companies and the cash cow potential driverless cars represent.
Disruptions from self-driving and flying cars will be widespread.
But while patchwork state regulations may be useful for finding out the best path forward in the driverless era, comprehensive federal regulations will likely be needed sooner rather than later to avoid state-to-state rule conflicts. At the same time, over-regulating the industry early on could dampen innovation right at the time growth is exploding.
Then there is the public, who, despite assurances that self-driving cars will vastly reduce accidents and lead to a brave new world of on-the-go leisure, expresses reservations about autonomous technology.
Public fear of the driverless car is not unfounded. Many have asked how automated vehicles should respond to the moral dilemma of whether it’s preferable to, say, run down pedestrians in a crosswalk or crash into a tree.
Whichever choice the car makes, it raises another question being hotly contested by lawyers and insurance brokers: who is responsible for the damages?
These are just a few of the issues that self-driving cars pose. As we move into the driverless era, numerous industries will be disrupted in a society that currently revolves around the personal, self-driven vehicle.
Self-driving cars are just the beginning, too. Companies are working on flying cars, which will open up a brand new Pandora’s box of regulatory, infrastructure, and legal questions.
The New Arms Race
Traditional auto manufacturers, newer electric car makers, auto suppliers, and tech companies are battling for supremacy in the emerging self-driving car market.
Navigant Research ranked 18 companies on the cutting-edge of self-driving technology based on criteria that includes vision, go-to market strategy, technology, and product quality.
The companies most likely to get their autonomous cars to market first, according to Navigant, are Ford, General Motors, Renault-Nissan, Daimler, and Volkswagen.
It’s no coincidence that each of the companies in the top-five are auto manufacturers. In fact, only two non-automakers crack Navigant’s top ten.
Navigant explains that car companies, unlike tech companies, have the manufacturing capabilities to mass produce self-driving cars. Navigant expects tech companies to eventually provide auto makers with autonomous technology.
This scenario is already playing out through strategic partnerships between Volvo and Uber, Waymo (Google) and Fiat Chrysler, BMW and Intel, and General Motors and Lyft. Since suppliers already provide auto makers with most of their vehicle parts, these types of partnerships are nothing new. The key difference is that self-driving cars will rely more on technology such as computer processors, cameras, radar, and software.
States Vie for Footholds in Self-Driving Industry
Autonomous vehicles represent a major new market opportunity not only for manufacturers, but for states that want to attract jobs and revenue from the emerging market.
California has long been seen as the most tech-forward state, but the Golden State’s penchant for strong regulations is creating an opening for others to take leadership roles in self-driving cars.
Different states have different claims to the self-driving throne. California’s Silicon Valley is where major tech players are headquartered. Michigan has its auto industry roots. Pennsylvania and Massachusetts are home to Carnegie Mellon University and MIT, respectively, two front-running institutions in driverless car research.
For now, states are serving as laboratories in the self-driving car experiment.
Other states, like Virginia, that have no natural industry connections, are seeing the opportunity that autonomous vehicles represent and attracting companies with friendly legislation and rulemaking.
Driverless cars, after all, can only stay on the test track for so long. They must be tested on roads, in real-life traffic, before they can be deemed ready for commercialization.
Virginia makes no bones about its aggressive sales pitch.
“We have no rules that prohibit autonomous vehicles, no law. A lot of states do. That’s intentional that we’re doing that,” said Virginia Transportation Secretary Aubrey Layne.
California, which is taking a more cautious approach, is working on the country’s most comprehensive self-driving car regulations. The state presumably wants a functioning regulatory system in place before self-driving cars go mainstream, but a potential downside of their strategy is stifling innovation.
California’s approach has “made it more difficult for the industry,” said Stan Caldwell of Carnegie Mellon. “They’re trying to keep it safe. But they can’t keep up with the technology curve.”
For now, a patchwork of state regulations may benefit growth as states compete and the most safe, effective regulatory solutions take shape in jurisdictional laboratories.
Florida, for example, passed legislation making it the first state to allow autonomous vehicles on roadways without a human backup driver, while it is now legal in Michigan to purchase autonomous cars.
Autonomous Vehicles Need Federal Regulations
At some point, the federal government will almost certainly have to impose nationwide self-driving car regulations that set basic performance and safety standards. Otherwise, manufacturers would have to produce vehicles with different standards in accordance with different state laws.
Joseph Okpaku, Lyft’s Vice President of Government Relations, told a congressional committee that “inconsistent and conflicting” state laws create “the worst possible scenario for the growth of autonomous vehicles.”
Federal law preempts state law wherever there is legal overlap. The National Highway Traffic Safety Administration (NHTSA) is the federal agency traditionally in charge of regulating vehicle performance.
Last September the NHTSA issued guidance that lays out automated vehicle performance guidelines and a 15-point model state policy. But the recommendations are strictly voluntary. They also leave many questions unanswered, such as the open-ended definition of an “operational design domain,” a safety assessment that proposes not allowing autonomous vehicles on public roads until the manufacturer tests under controlled conditions the different traffic and environmental variables the vehicle is likely to encounter.
Ford, GM, Uber, and Tesla poured millions into lobbying the federal government in the first quarter of 2017.
Weather is one operational design domain, although the NHTSA does not mention, for example, if a car intended for use in the South should be equipped to handle the ice and snow of New England. Vehicles also may or may not encounters variables like rock slides, busy pedestrian centers, and wildlife in the road. Should all vehicles be tested and prepared for all conceivable domains? If so, what testing criteria must manufacturers meet to prepare vehicles for these different scenarios?
Such discrepancies could likely be addressed via engineering tweaks for vehicles marketed in different regions. A simple software upgrade might be enough to make a vehicles sold in Arizona ready for a road trip to Alaska. But the broader point is that there are many gray areas to consider when crafting self-driving vehicle regulations.
Making matters even murkier, Elaine Chao, new head of the Transportation Department under President Trump, suggested early in her tenure that the Obama-era guidelines were too restrictive and would be revisited.
But if you follow the money, automakers and tech companies appear confident that federal regulations in some form are on their way. Ford, General Motors, Uber, Tesla, and others poured millions into lobbying the federal government on self-driving car policies in the first quarter of 2017 alone. Lobbying is taking place on the state level as well.
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