New Guidelines for Self-Driving Cars – 9/21/16

The Obama administration has revealed the guidelines for self-driving cars that tech and auto industry leaders have been waiting for.

The Transportation Department has already allowed exemptions to some rules for the purpose of testing of autonomous vehicles, such as, the case of considering Google’s AI system to be a driver. The new guidelines go a step further in order to address contradictory regulations at the state level.

The guidelines were left intentionally vague compared to the safety requirements imposed on standard human-driven vehicles to allow flexibility, according to the National Highway Traffic Safety Administration (NHTSA). Though they give NHTSA oversight of the software technology used in driverless cars, states would continue to regulate driver’s licenses, car registrations, traffic laws, insurance and legal liabilities.

The policy gives suggestions rather than a hard legal framework. Still, the recommendations give auto makers and technology companies a firmer sense of regulators’ expectations since they amount to an official endorsement of automated car technology. Mark Rosekind, NHTSA’s administrator, has said self-driving cars are crucial to addressing human error, which the agency estimates is a factor in 94% of fatal car crashes and responsible for almost 35,000 deaths in the U.S. last year.

Now regulators will need to balance optimism and the commercial interests of developers with concerns over public safety. To accomplish that much, the new guidelines targeted four main areas: a 15-point safety standard for the design and development covering safety features, privacy, digital security, communication between cars and drivers, and more; a call for states to come up with uniform policies; clarification on current regulations; and openness for new regulations. The Department of Transportation also reiterated its authority to recall any vehicles found to be unsafe.

Overall, the government’s endorsement is expected to speed up the rollout of fully-autonomous cars. Uber is already testing driverless cars in Pittsburgh, while General Motors Co. and Uber rival Lyft have discussed running a fleet of self-driving Chevrolet Bolt electric taxis. Tesla and other car makers are also working with the technology though they have so far kept to more conservative semi-autonomous features.

All this puts pressure on urban planners and insurers. Only about 6% of cities have considered the effect of driverless cars in their long-term planning, according to a survey last year by the National League of Cities. Meanwhile, auto insurers are trying to figure out what impact autonomous vehicles will have on their business models. KPMG actuaries, for example, estimated an 80% drop in the U.S. accident-frequency rate by 2040.

Regardless of who wins in November, the guidelines will likely be kept in place to provide at least a little stability and support for a promising technology.

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