The Self Driving And Sharing Economy: How Regulation May Drive The Transportation Revolution In 2020 And Beyond
The year 2020 may be the one that redefines your ride. Less than a decade ago, typing the words Uber or Lyft into an internet search or Word document would have set off all kinds of grammatical and spelling error alarms. And now these words are commonly used as verbs (“I’m going to Uber…”). Similarly, two years ago, the words Lime and Bird were far from proper nouns. Today these terms are synonymous with a transportation revolution, and 2020 is poised to be the shot heard around the world.
That’s because a combination of factors has now reached a new tipping point. Autonomous vehicle technology is no longer nascent or the purview of just a few cutting edge companies. It is being deployed by nearly every major carmaker and software developer from Detroit to Silicon Valley, and the race is on to be the best. Market disrupting ride-sharing platforms—from cars and scooters to planes and helicopters—have transformed how we think about the utility and ownership of our vehicles. And in state capitols, Washington, the European Union and beyond, regulators are paving the way for more and faster innovation. Everyone recognizes that these technologies will mould the future, but this final piece—how regulators will interact with these developing technologies—is the critical factor that has the potential to shape the race to market.
The key question is this: How will regulation impact the development of these technologies and ensure that innovation thrives while charting a path to make them safe and fair for all?
Policymakers are walking a fine line when it comes to encouraging innovation while protecting the safety and availability of our transportation infrastructure. And the stakes could not be higher in striking the right balance, particularly when one high-profile tragedy is all it would take to dash public confidence and set development back for years.
Properly supported and regulated, however, transportation advances over the next decade could enhance lives and productivity for a century or more.
Consider how we get around touches nearly every facet of our lives. Traffic congestion costs the average American 97 hours and $1,348 a year. Fossil fuels burned by traditional cars are a significant source of pollution and related impacts. And car accidents due to human error cause countless deaths each year.
But governments at every level are still struggling to get a handle on how to regulate these new technologies—from how many should be allowed on city streets, to the future of safety standards, to insurance and liability issues of the first impression.
In the area of autonomous vehicles, perhaps the highest-profile example of where this transportation revolution is going, 29 states have enacted legislation outlining the conditions under which developers can test and demonstrate that driverless cars are safe, including prescribed follow-on distance, liability assurances, and reporting requirements. Thus far, Congress hasn’t passed a law leaving regulation of this booming technology to the states.
So far, that hasn’t been too much of a hindrance, because developers are still testing full autonomy and certain states, such as Florida and Arizona, have been very accommodating as they seek to attract and retain these high-tech employers. But now, as autonomous vehicle technology moves on to more advanced stages, including towards full autonomy, developers and other interested parties are wondering whether Congress will weigh in with its own prescriptions.
About 90 stakeholders recently submitted comments to the National Highway Traffic Safety Administration regarding new rules to accommodate testing of autonomous vehicles on U.S. roadways. To move ahead with development, automakers need permission to operate cars without manual controls—such as without steering wheels, pedals, or a human driver. This so-called Level 5 autonomy—or complete automated driving—is the first finish line in the autonomous driving development race. The fierce competition among businesses to get there reflects just how revolutionary they expect it to be.
But some studies suggest that Americans are sceptical about autonomous vehicle safety, with 71 percent recently telling the AAA that they would be afraid to ride in fully self-driving cars. So it’s essential that NHTSA and other regulators get the safety/innovation balance right.
Autonomous vehicle technology isn’t the only area of transportation innovation for which regulations are being developed. In five years, you might be able to reserve a seat on a private charter flight like we can today reserve a seat with a vehicle ride-sharing service. Advocates of internet-based flight sharing say it would dramatically reduce costs to consumers, as well as provide environmental benefits.
European regulators have been allowing it for years, but in the U.S., the Federal Aviation Administration shut down flight-sharing platforms in 2014 based on safety concerns. In October 2018, Congress passed a law directing the FAA to issue guidance on the topic, and the FAA has begun notifying companies of regulations and requirements that apply to this business model.
Back on the ground, cities and states are still struggling to enact rules governing the proliferation of electric scooters and bikes, even as these “shared micromobility” devices have soared in popularity, with the number of rides doubling from 35 million in 2017 to 84 million in 2018. Local governments are grappling with the difficult issues of integrating these popular and cost-effective methods of transportation into their communities, which were not built to naturally accommodate such technologies while working to ensure they are safe for riders, pedestrians, and other commuters.
To be sure, developing rules of the road for this transportation revolution is complex. In addition to balancing innovation with physical safety, cybersecurity and privacy present unique challenges. Increasing vehicle automation and connectivity means our cars are becoming more like our smartphones in terms of their ability to track and analyze our every move. Indeed, privacy is at the forefront of regulatory interest, with the California Consumer Privacy Act being the most recent law that seeks to safeguard the personal information that consumers provide to businesses. Unlike most smartphone hacks that could expose troves of personal information, however, a smart vehicle hack could cause physical harm and have broad public safety impacts—not to mention the deterioration of the public’s confidence in these technologies.
One example of how the U.S. government is seeking to move the regulatory/innovation discussion forward is through the U.S. Department of Transportation’s newly formed Non-Traditional and Emerging Transportation and Technology Council, or NETT. Established last year, NETT includes representatives from all 11 DOT operating administrations, who are tasked with “identifying and resolving jurisdictional and regulatory gaps that may impede the deployment of new technology.”
NETT recently put out a call for public comments on how regulations – or the lack thereof – could be hindering transportation innovation, among other issues. It’s too soon to tell what impact NETT will have and whether it will assist regulators in striking the right balance for these rapidly developing technologies, but a body focused on these issues may help advance the ball.
Indeed, some suggest that a collective regulatory body could be useful in working on highly complex issues such as deconflicting airspace for drones, planes and, one day, flying taxis, for example. But coordination is going to have to go well beyond a single federal agency, bringing in other federal, state, local, and international partners.
And the onus isn’t just on regulators. Innovators should be thinking about safety, security, privacy and regulation early on to help the smooth advancement of these important technologies. Considering the “what-ifs” and “then-whats” early will go a long way in developing a fertile regulatory landscape that supports innovation, protects the privacy and ensures public safety.
In 2020, we can expect a vibrant public dialogue about these issues, as more lawmakers become engaged on the topic and new innovations accelerate the timeline for not only what’s possible but also the consumer desire to embrace it. It will signal a new decade that will be about forwarding momentum in every way.
It’s an exciting time, but how this transportation revolution turns out, in the end, will depend on innovators and regulators alike working to strike the right balance between pushing forward these life-changing innovations while creating a regulatory framework that works for all.
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