How Arizona Turned the Self Driving Car Into Its Golden Goose

Wednesday, January 18, 2017

How Arizona Turned the Self Driving Car Into Its Golden Goose

Self Driving Cars

Ride sharing companies and others are using off-the-shelf technology to accelerate the development of self driving cars. Will autonomous vehicles be able to overcome regulatory capture, and push the technology into mass adoption? States like Arizona might point the way forward.

The reason for the rapid progression of autonomous vehicles is in general, probably due to the lack of regulation. Uber has been able to use off-the-shelf technology innovatively and forced regulators, and everybody else, to take notice.

Is Anyone To Blame?

There is no reason why existing taxi and limo services could not have built a similar platform. In fact, they were and arguably still are in a good position to compete with Uber and other ride-sharing companies. However, their response to this disruption seems counterproductive so far. At the same time, the economic landscape has provided strong incentives for these services to behave this way.

Larry Downes, best-selling author on technology, strategy, and policy wrote about this problem in 2013 in a Forbes magazine article titled "Lessons From Uber: Why Innovation and Regulation Don't Mix." Over time, regulators and the industries they oversee can both develop vested interests in maintaining the status quo. This effect is what political scientists call regulatory capture.

San Francisco has been relatively accommodating and have even promised to rethink any existing regulation. But Uber, which is providing substantial social value, thrives on flexibility; this is why states like Florida and Arizona, which are much less restrictive, are looking like better locations to develop this technology.

Moving Forward

Related articles
In Arizona, Governor Doug Ducey has helped ensure that Uber will not need a permit or license to drive their autonomous vehicles on public roads like they would in San Francisco. The executive order Ducey signed last year establishes a Self-Driving Vehicle Oversight Committee to help officials advance this new technology. While this has encouraged other companies to test their self-driving car projects in Arizona, many services are focusing on San Francisco and California in general. According to Bryant Walker Smith, a law professor and scholar associated with the University of South Carolina and Stanford Law School, California issued Autonomous Vehicle Testing Permits to 20 companies in 2016. Some of the entities that received permits include Volkswagen, Mercedes Benz, and Google.

There is no doubt that some regulation is necessary to ensure public safety, predictable prices, and adequate insurance. These are imperative public interest goals that regulators and innovators alike cannot ignore. Therefore, some level of government oversight is expected and should even receive encouragement by companies interested in autonomous vehicles; a technology that will undoubtedly have an enormous impact on our economy and society. But since it is such a new technology, with so many uncertainties, regulators would be smart to allow for plenty of innovation by leaving as much as possible up to those who know the most about AVs. Otherwise, they run the risk of losing out on all the potential benefits these changes can bring. Michael J. Coren of Quartz magazine emphasizes, "For now, governments are walking a line between public safety, and stifling a technology with huge potential benefits for society."

The Pros & Cons of Regulation

For Uber, it is probably less about the autonomous vehicle testing permit and its cost and more about the additional restrictions that are likely to follow. For example, in addition to accident reports, the California Autonomous Vehicle Testing Regulations require every manufacturer authorized to test autonomous vehicles on public roads to submit an annual report summarizing the disengagements of the technology during testing. In a recent article written for Government Technology magazine, Ryan McCauley notes that California's draft regulations contain language that would "require manufacturers to equip the vehicles with data recorders and release the data within 24 hours to law enforcement agencies."

California officials claim that they are minimizing errors by encouraging the exchange of information between manufacturers and developers. States and municipalities insist that they are primarily interested in collecting crash and disengagement data. But AV companies feel that collecting and making all this information public record will eliminate any competitive advantages they may currently have as a result of extensive development.

Arizona, on the other hand, is being much more lenient on ride-sharing services like Uber. Although Arizona insurance rates are some of the lowest in the country, if Uber can secure strategic partnerships, they may also be able to get a significant discount for themselves and their drivers like they are doing in India. Regardless, I think we can expect Uber will be continuing to seek favorable circumstances that allow them to innovate.

Top Image by Foo Conner

By  Lindsey PattersonEmbed

Author Bio - Lindsey is a freelance writer specializing in business and consumer technology.


Post a Comment