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Regulating innovation – the difficult case of self driving cars

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    ScottJacobs
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    Regulating innovative products and services is one of the most difficult of government decisions – because the tendency is always to step in too quickly to prevent “emerging” or “potential” risks without considering the benefits of letting the technology develop in the market, and accepting the risks in the interim.

    The US government has made the right decision in regulating self driving cars – that is, “as
    this area evolves, the “unknowns” of today will become “knowns” tomorrow. We do not intend to write the final word on highly automated vehicles here. Rather, we intend to establish a foundation and a framework upon which future Agency action will occur.” The correct place to start is to embrace the potential benefits, rather than focus on risks: “35,092 people died on U.S. roadways in 2015 alone…. 94 percent of crashes can be tied to a human choice or error. An important promise of HAVs is to address and mitigate that overwhelming majority of crashes.”

    How to manage risks? Not the old-fashioned way. “The remarkable speed with which increasingly complex HAVs are evolving challenges DOT to take new approaches that ensure these technologies are safely introduced (i.e., do not introduce significant new safety risks), provide safety benefits today, and achieve their full safety potential in the future. To meet this challenge, we must rapidly build our expertise and knowledge to keep pace with
    developments, expand our regulatory capability, and increase our speed of execution.”

    The US regulation is for automated vehicles to meet current standards of tests for safety, but no more. Voluntary testing, not design or prescription, is backed up by market recall if risks become unacceptable: Standards for new testing are voluntary, not mandatory, “This Guidance highlights important areas that manufacturers and other entities designing HAV systems should be considering and addressing as they design, test, and deploy HAVs. This Guidance is not mandatory.” However, the regulator “has the authority to identify safety defects, allowing the Agency to recall vehicles or equipment that pose an unreasonable risk to safety….”

    Finally, the US government frankly admits, “It is likely that additional regulatory tools along with new expertise and research will be needed to allow the Agency to more quickly address safety challenges and speed the responsible deployment of lifesaving technology.” True, and not just in cars. Medical technologies, energy generation, communications, crypto-currencies, and many other hyper-innovative fields cannot be regulated by the old tools of prescriptive regulation. New regulatory tools are badly needed.

    The new guidance can be found here: https://www.transportation.gov/AV and former President Obama’s support for it can be found here: http://www.post-gazette.com/opinion/Op-Ed/2016/09/19/Barack-Obama-Self-driving-yes-but-also-safe/stories/201609200027

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