Preparing for the Inevitable: The Future of Autonomous Vehicles

Take a moment and imagine a world where individual car ownership is no longer a given for most Americans. What’s replaced our current reality? Fleet-owned, fully autonomous vehicles. When will this future come? No one knows for sure, but many experts in the field predict that it will be here sooner than many of us assume and certainly before the policy has caught up with the technology.

Many commentators have noted the potential consequences of autonomous transportation, particularly how it will lead to job losses for taxi and truck drivers. However, there are critical second and third order effects that will have far greater impacts on society. A world without traffic violations and parking meters means massive disruptions to insurance, real estate and public safety. Far too little attention has been paid to these upcoming changes. Preparing for this new reality will require close cooperation and collaboration between state, local and federal leaders.

Governors have the opportunity to be leaders in this discussion. NGA Chair Nevada Gov. Brian Sandoval is highlighting the challenges and opportunities of autonomous vehicles through his chair’s initiative Ahead of the Curve: Innovation Governors. This week in Las Vegas, state officials, business leaders and governors met to discuss how technology is transforming mobility at Gov. Sandoval’s transportation summit.

Why start planning now?

Some commentators think any discussion of a completely autonomous future is too premature to be productive. They say the car-loving American public will never fully succumb to “robot cars” and even if they did, the only vehicles that are even close to being fully autonomous have been deployed in limited pilot tests. They may be right, but America’s relationship with cars and technology adoption tells another tale.

Americans have a long history of falling in love with technology. Whether it’s the radio, television, Internet or smart phones, Americans adopt new technology with incredible speed. This trend has accelerated in recent decades.

Increasingly we are adopting products into daily use much faster than before and more of us are becoming dependent on these products in record time. The smartphone is the most obvious example of this trend. Smartphones arrived over a decade ago, and by 2017 more than three quarters of Americans report owning one.

Technology adoption aside, there are some signs that America’s interest in driving has been waning since the Great Recession. While we’re a long way from Americans giving up cars completely, the attractiveness of driving our own vehicles may be decreasing as time goes on.

Source: Recent Decreases in the Proportion of Persons with a Driver’s License across All Age Groups.

Finally, there has been some recent discussion pointing to Americans being wary of autonomous vehicles. A survey from the Pew Research Center found that Americans are more worried than excited about this technology. However, drawing conclusions from this survey would be premature.

Automakers are currently rolling out vehicles with level 2 autonomy, and with every model year, they will only continue to embed more of this technology. Though we won’t be waking up to a world of fully autonomous vehicles tomorrow, the American driver will gradually adopt new autonomy features, until we arrive at a future where the world is largely composed of completely autonomous (level 5) vehicles.

Insurance

One of the first sectors to be impacted by the rise of autonomy will be the insurance market. For the last half century, the automobile liability insurance market has done well, and remained largely static. Drivers are legally required to pay for car insurance, and accidents always happen. When they do, those involved file an insurance claim to receive payment from their insurance company, who may or may not pay out the policy.

What happens when computers drive instead of humans? Fewer accidents. What about when most people don’t own a vehicle, and instead use on-demand, fleet-owned autonomous vehicles? Fewer insurance policies.

What happens to insurance companies if autonomy drastically reduces traffic incidents? Who needs insurance then? What if the software designer, hardware manufacturer, operator and owner of a vehicle are all different parties? These are questions that many insurance companies are already beginning to contemplate.

Some insurance-technology startups are already debating how to solve this problem. The fix may be that the manufacturer or operator may offer one policy to protect themselves and their vehicles against damage and liability, while also offering passengers insurance against any injuries they may incur while riding in the vehicles.

This transition will cause a significant disruption to the insurance sector, both in how it’s organized, what products it offers and what premiums it will realistically collect. States not only regulate insurance companies, but they also regulate how and what type of insurance car owners and operators must have. State policymakers would be wise to start considering the ways in which statutory and regulatory regimes must be updated to account for both a semi-autonomous and fully autonomous future of transportation.

Public Safety

The transition to autonomous transportation will have a major impact on public safety. The immediate positive impact will be a reduction in traffic fatalities. But, there will be significant challenges to navigate. State and local policymakers must start to consider how public safety, in particular traffic enforcement, will have to adapt to autonomous transit.

In 2016 nearly 38,000 Americans died in automobile accidents. An overwhelming portion of them are caused by human, rather than machine, error. Computers may not be perfect, but they will be an improvement over human drivers.

In addition to driver safety, public officials need to consider how law enforcement will change with autonomous transportation. If an autonomous vehicle is being used to transport illegal substances or to facilitate a crime, how will police stop, fine or apprehend the vehicle? This will be more complex than today’s traffic stops and may require close coordination with the fleet owner, software developer and third parties. With some automakers testing vehicles today and petitioning for widespread use in a few years, law enforcement needs to start considering these challenges now.

The regulatory structure and fee collection around vehicle registration, licensing and inspection; car ownership taxes; gasoline taxes; parking tickets; speed camera revenue; and, general traffic fines will all need to be updated. States and localities have developed a system of regulations that are based on human operation and individual ownership of vehicles. This will no longer be the case in many jurisdictions. Many of the fees that fund government will no longer be able to be relied upon as sources of revenue for state and local government.

Finally, one of the more interesting tangential impacts of autonomous driving could be on public health, particularly related to tobacco use. If you imagine a lot less gas stations and truck stops, you can imagine a lot less impulse convenience store purchases, particularly around tobacco products. While it is hard to truly predict the overall impact on public health, it’s not difficult to envision a positive benefit from making tobacco purchases less readily available.

Real Estate

How we allocate land use in the United States has largely been driven by automobile-centric policy making. So far there has been an assumption that a significant portion of the population will own and operate cars on a frequent basis. This leads to significant amounts of land being devoted to parking lots, garages, highways and rest stops. The eventual evolution to fleet-based autonomy will drastically alter this ecosystem.

The growth of ride-sharing services has begun to shine a light on one aspect of this. If you can call a car on demand, then parking spaces are not as important as pick-up and drop-off zones. This is an area of growing concern in dense environments where car sharing is common, however as autonomy spreads, this will become an issue in every office or shopping district nationwide.

This change will be particularly acute in some communities. While the percentages vary greatly, our country devotes a great deal of square footage to garages, rest-stops, driveways and parking garages. At the high end, Los Angeles County has nearly 15% of its land devoted to parking. One estimate suggests that there are three parking spots for every car in the United States, totaling nearly 5,000 square miles of land devoted to parking. What will happen to this land?

Governors will have the opportunity, working with local leaders, to reimagine this land for a future where parking is no longer tied directly to car transportation.

Accessibility

One of the more fascinating opportunities created by autonomous transportation is increasing the availability of transportation for Americans with disabilities.

Nearly 1 in 5 adults in America have a disability of some kind. Not all disabilities restrict one’s ability to operate a motor vehicle, but there are millions of Americans who are unable to drive to work, the store or the doctor because of a disability. Autonomous vehicles hold significant promise for these individuals.

State officials, as the licensing authority for automobile ownership and operation, should consider this when updating licensing and operation rules and regulations in the coming years. It would be unfortunate to limit this significant improvement to mobility by regulating drivers/operators in a way that restricts access to Americans with disabilities.

Conclusion

There is no doubt that significant technological, political and regulatory hurdles stand between now and a fully autonomous driving future. However, if the history of technology in America teaches us anything, it’s that time and again Americans adopt new technology at a dizzying pace. Creating a safe and prosperous autonomous transportation sector will require close cooperation between state government, the federal government and the private sector.

Who will ensure that government is prepared for the significant disruptions and the ripple effects autonomy will have on society? That will fall squarely on America’s governors.