February 25, 2016

A Push to Fund and Regulate Self-driving Cars

  • Transportation Secretary Foxx has announced plans to spend $4 billion over 10 years on pilot programs testing automated vehicles.

  • Approximately 10 million cars with autonomous driving features may be on the road by 2020.

  • Automated vehicle technology will transform the transportation sector and America’s economy, but real policy challenges exist, including liability, safety, privacy, and security.


Last month U.S. Secretary of Transportation Anthony Foxx unveiled a plan that included nearly $4 billion over 10 years for automated vehicles. The funding will be used for pilot programs to test autonomous vehicle system technology throughout the United States.

Additionally, Foxx announced plans to fast-track innovations for vehicle safety. The proposal calls for the department to collaborate with the industry to create a uniform multistate structure for self-driving vehicles.

“We are on the cusp of a new era in automotive technology with enormous potential to save lives, reduce greenhouse gas emissions, and transform mobility for the American people.”Transportation Secretary Foxx, 01-14-2016


Currently, regulations for autonomous vehicles are created state-by-state. In 2011, Nevada became the first state to create rules for the operation of autonomous vehicles. Since then, California, Florida, Michigan, North Dakota, Tennessee, and the District of Columbia have passed legislation related to autonomous vehicles. Arizona has also issued rules governing autonomous vehicles. According to Volvo CEO Hakan Samuelsson, “the absence of one set of rules means car makers cannot conduct credible tests to develop cars that meet all the different guidelines of all 50 US States.”

The Department of Transportation will have to decide whether any set of federal rules will preempt state regulations, or whether Washington’s guidance will simply set the model for state laws. In addition, policy makers will have to wrestle with issues like whether operators of the autonomous vehicles will have to stay in the driver’s seat and whether operators must be able to take control of the car if an emergency requires human action. California recently issued draft regulations that require drivers to be present in self-driving vehicles. Texas has opted for a seemingly gentler regulatory structure, contributing to Toyota’s plans to shift its North American headquarters from California to Texas.

Automakers, including Tesla, have already begun incorporating automated technology into vehicles. The industry views this as just the start of an evolution of technology that inevitably will lead to roads filled with self-driving cars.


Safety Concerns

Google admits that its self-driving cars have been involved in accidents but says these typically involve other cars crashing into the autonomous vehicles. However, the University of Michigan’s Transportation Research Institute claims that “self-driving test cars are involved in crashes at five times the rate of conventional cars.”

It may be impossible to accurately gauge the safety of autonomous vehicles until more of them are on the road. One RAND researcher wrote in a February 1 op-ed for USA Today that testing will require millions of miles of driving by automated cars. “Regulators will have to find other ways of estimating safety, but widespread deployment will be the true test.”

Liability Issues

One of the largest questions relates to how the government and industry will handle liability for accidents involving self-driving cars. Regulators will have to weigh the types of liability that will be allowed, the impact on the judicial system, and the type of protections needed for manufacturers to ensure that vehicles meet safety standards. For instance, policymakers and courts will have to decipher liability among the car’s owner, maker, and operating system designer.

Security and Privacy Matters

The government must also figure out how to best protect consumers’ privacy. Driverless cars will collect large amounts of data about the routes people take, places they visit, and their driving habits. Policy makers will have to consider who owns the data created and used by autonomous vehicles and whether third parties can sell that information.

Additionally, there are security concerns about the potential to hack car operating systems. Last July, hackers took control of a Jeep on the highway to demonstrate that cars already are not immune from cybersecurity concerns. In order for the use of autonomous vehicles to grow, manufacturers must demonstrate that the cars won’t be hacked.


In a July 29, 2015, article, Business Insider estimated that 10 million cars with at least some autonomous driving features may be on the road by 2020. Despite the concerns, there are many potential benefits to a successful deployment of autonomous vehicles. For example, Rand predicted in 2014 that traffic flow could be more efficient and congestion decreased.

More research is needed to better understand the costs and benefits of autonomous vehicle technology. As the technology evolves, policy makers must carefully consider liability, safety, privacy, and security questions. Balancing innovation with a regulatory structure that addresses key policy issues will be the challenge for governments at all levels going forward.

Issue Tag: Technology