California Sets the Bar for State Regulation of Autonomous Vehicle Testing

Screen Shot 2014-10-29 at 1.28.28 PMBy Brooks Lindsay

Last month, a California law went into effect allowing autonomous vehicle testing on any California public road. The law, signed in May by Governor Jerry Brown, is the most important regulatory framework to date surrounding autonomous vehicle testing. The law deserves critical examination considering the societal changes that autonomous vehicles may bring and the likelihood that California’s law will be used as a legislative template by states around the nation.

California’s law purely regulates test-driving and does not attempt to regulate anything further—such as the commercial sale or consumer use of autonomous vehicles on California roads. Future legislation will have to include much broader provisions on the commercial sale and consumer use of these cars. In the meantime, testing requires here-and-now regulation, like that in California.

Here are the provisions of California’s law with analysis indented:

  • Autonomous cars can be tested on any state road as long as they comply with the below rules.
    • This is a major development on prior regulations that limited testing to controlled environments or long-stretches of highway. Now, testing can be done in dense urban areas with pedestrians, bikers, and aggressive drivers all around.
  • Test drivers must be able to reassume control – the car needs a driver’s seat, steering wheel, and pedals.
    • Google didn’t like this provision at first because it wanted to test completely autonomous cars without drivers’ seats, pedals, and a wheel (termed “level four” autonomous cars by the NHTSA). Google eventually conceded and added a steering wheel, brakes, and pedals to its prototype (effectively making it a “level three” autonomous car, where drivers can reassume control). From the legislators’ perspective, this requirement is understandable—they want assurance that a human can reassume control if/when an autonomous vehicle responds awkwardly or dangerously to a situation not anticipated by its programming. This is arguably in both the public and manufacturers’ best interests. But the provision will likely be amended at some point in the next five to ten years to allow testing of fully autonomous level four vehicles. In the meantime, legislators will want to see more tests, stats, and assurances before taking off the training wheels for challenging, multi-variable urban settings.
  • Manufacturers testing autonomous cars must take out at least a $5 million insurance policy or bond.
    • $5 million seems well calculated to ensure manufacturers can cover potential damages in the event of an at-fault crash. It should be noted that this is simply a minimum requirement, not prescriptive of the sizeable insurance policies that larger companies like Google might obtain.
  • The manufacturer itself must conduct the testing, and test drivers must be employed or contracted with the manufacturer.
    • This provision ensures clear lines of liability back to the original manufacturers who have the insurance policies sufficient to cover any damages from an accident.
  • The manufacturer must have a special Manufacturing Testing Permit.
    • This permit can cover 10 vehicles and 20 test drivers from one manufacturer, which can enable quite extensive testing. And, a manufacturer can get more than one permit. Google has about 20, the lion’s share of the roughly 25 permits California has issued.
  • The test driver must obtain a Test Vehicle Operator Permit from the state and complete the manufacturer’s autonomous vehicle test driver training program.
    • The permit requires that the test driver have a clean driving record, and the manufacturer’s testing program must provide instruction (from an “experienced driver” in the technology) on the automated car’s systems and functionality. The testing program must provide instruction on defensive driving, including reassuming control and recovering from hazardous driving scenarios (which is really what the test driver is there for). This is a fairly squishy requirement because it leaves the creation and implementation of the program primarily in the hands of manufacturer. But legislators surely realize that their own officials are not going to be better at training test-drivers than the actual builders of the technology.
  • Manufacturers must have completed prior controlled tests that simulate real-world conditions before putting their vehicles on public roads.
    • To qualify, a manufacturer cannot take to the public roads without having done controlled testing on private roads. They must complete a series of successful tests in private or remote settings that simulate real world conditions and then “reasonably conclude” based on these tests that the vehicle is safe to drive on public roads. This makes sense for obvious reasons—we don’t want rookie manufacturers making rookie mistakes on public roads with real lives at stake.

These core provisions all seem fairly measured. In exchange for the bold leap of allowing testing on all public roads, the legislature is requiring, maybe just at first, that there be a human that can reassume control if the unforeseen occurs. To play the game, manufacturers need to show that they can pay big damages, and they need to get the state’s permission, certify and train their test drivers, and show that their autonomous cars function safely under controlled circumstances where lives aren’t on the line. These are sensible limitations that other states may look to follow.

And, indeed, California is not the only state with laws on the books regulating driverless cars. Florida, Nevada, Michigan, and the District of Columbia have all passed laws regulating autonomous-car testing. Hawaii, Georgia, Louisiana, Maryland, Minnesota are moving quickly to pass laws as well. Germany, Spain, and the Netherlands allow testing on public roads. And the UK, France, Italy, Belgium, Japan are all planning transport systems for these autonomous cars. So there are plenty of other reference points that other states and countries should look to, but California has set the bar and set it well.

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