You are here

Misguided Regulations Threaten Automated Vehicle Innovation

Earlier this week, I appeared on a Cato Institute panel titled, "The End of Transit and the Beginning of the New Mobility: Policy Implications of Self-Driving Cars." Spurred by the release of Cato Senior Fellow Randal O'Toole's latest paper, "Policy Implications of Autonomous Vehicles," I joined Randal and Adam Thierer (see Adam’s new paper here) of the Mercatus Center to discuss various vehicle automation public policy issues, including the impact on transit and urban growth, state licensing and operations regulation, federal vehicle safety regulation, and data security and privacy policy. We all share the goal of minimizing government intervention in order to promote innovation and consumer availability of automated vehicles.

My presentation focused on state and federal regulatory issues, specifically those related to licensing, operations, and safety. I told the audience that we should all be very concerned by the prospect of overregulation and the precautionary principle, highlighting the fact that any unnecessary cost increase or production delay translates to increased property damage, injury, and fatalities, as consumers then use older, less safe vehicles when they would have otherwise purchased automated vehicles.

To date, four states and the District of Columbia have enacted statutes that explicitly recognize the legality of automated vehicles. As for implementation, most are closely following the ongoing regulatory developments in California as a bellwether for future state legislation and regulation. This is in part because California is among these early first-moving states to legislate on automated vehicles and in part because California is the largest single economy in the U.S. Actions California takes, if they aren’t preempted by federal legislation, can have major implications for national markets, such as the one for automobiles.

California’s manufacturer testing regulations came into force in September. While not entirely problematic, California’s rules mandate that a licensed driver be in the driver seat at all times during autonomous operation. In effect, this outlaws testing of more advanced fully automated vehicles. Google, which has designed a prototype that would remove the steering wheel and accelerator and brake pedals, has been forced to install these manual driver controls back into their vehicles. As I noted during my presentation, this represents the first clear example of onerous regulations forcing automated vehicle innovators to take a step back. Unfortunately, the District of Columbia and Michigan have also adopted driver-seat requirements.

In addition, I discussed the National Highway Traffic Safety Administration and how it generally approaches traffic safety. Noting that the agency focuses on the relatively trivial crash risks associated with unsafe and defective automobiles, I told the audience that the private sector’s technology—not regulators—will finally address the primary cause of crashes: driver behavior. But NHTSA’s current federal motor vehicle safety standards may create barriers to innovation.

For instance, Tesla Motors recently petitioned NHTSA to reconsider its current rearview mirror rule to allow compliance with cameras. If Tesla were to replace the viewing function mandated by the mirror rule now with cameras, it would still be required to install redundant, useless mirrors. Tesla’s petition isn’t automation-specific, but this should give you an idea of the kind of regulatory reform that will be needed when automation undermines the benefit-cost justifications of the current safety standards.

Another recent NHTSA development relates to connected vehicle technology. Most automated vehicle developers, particularly those with more sophisticated prototypes, are proceeding under the assumption that connected vehicle technology won’t be needed. In fact, many worry about reliability and security problems that could pose threats to automated systems. Unfortunately, based on the advance notice of proposed rulemaking it issued in August, NHTSA has decided to go forward with a mandate. CEI will be submitting comments to the agency next week criticizing their approach.

The full video from the Cato Institute can be found here. My presentation as aired on C-SPAN 2 is clipped here.

For more information on free market automated vehicle public policy, see my April 2014 CEI paper, “Self-Driving Regulation: Pro-Market Policies Key to Automated Vehicle Innovation.”