January 2020

As I wrote about last time, the Uniform Law Commission recently passed the Uniform Automated Operation of Vehicles Act. Today, I want to focus on Sections 5, 6, and 7 of that Act, which are titled, respectively, “Vehicle Registration,” “Automated-Driving Provider,” and “Associated Automated Vehicle.” The three sections are meant to complement each other and the generally applicable rules regarding motor vehicle registration in a state. The Comments to Section 7 give a nice synopsis of the way these three sections interact:

Existing state law generally requires the registration of a motor vehicle that is operated on a public road. If an automated vehicle qualifies as such a motor vehicle, it too must be registered. The person seeking that registration—typically the vehicle owner—must comply with all conditions of registration under existing law. Section 5 of this act adds a further condition: For the owner of an automated vehicle to register the vehicle, an automated driving provider must have designated that vehicle as an associated automated vehicle. Section 6 specifies how an entity declares that it is an automated driving provider, and Section 7 specifies how that entity then designates its associated automated vehicles. These three sections work together with existing law to ensure that a properly registered automated vehicle has a legal driver when it is under automated operation. In general, only if an automated vehicle is associated with an automated driving provider may it be registered and operated on public roads.

The Act’s comments are fairly dense, but we can work through them section by section. Under current state law, the owner of a motor vehicle must generally register that vehicle with the state according to state registration rules. The Act retains that requirement for the owner of an automated vehicles, but also adds a new condition of registration. Under Section 5, an automated vehicle may be registered only if an entity has:

(1) declared itself to be an automated driving provider (ADP) (explained in Section 6) and

(2) designated that particular automated vehicles as one of its associated automated vehicles (explained in Section 7).

The vehicle owner and the ADP do not necessarily have to be the same legal person. The vehicle owner could be an individual, and the ADP could be an original equipment manufacturer (OEM) like Ford, Honda, or Tesla. The manufacturer, or some other entity like an insurer or fleet operator, would declare themselves to be the ADP to the state, and declare the automated vehicles to be one of its associated vehicles, but the individual would own and register the car. This has the effect of “compelling” vehicle manufacturers, or some other entity, to declare themselves to be the entity legally defined as the driver for any consequences that arise from the vehicles actions on public roads. The comments to Section 6 clarify:

To become an automated driving provider, an entity must make an affirmative declaration that includes specific representations. This means that, first, an entity does not become an automated driving provider against its will and, second, not every entity can become an automated driving provider. Subsection (a) identifies three basic qualifications, at least one of which a provider must satisfy, and subsection (c) identifies four key requirements, all of which the provider must satisfy.

To qualify as an ADP, an entity must have either participated substantially in the development of the system, submitted safety self-assessments with NHTSA, or be a registered manufacturer with NHTSA. The purpose of these sections is to require registration with the state, ensuring that every automated vehicle on a state’s roads has an entity associated with it, against whom the state can credibly enforce relevant provisions of the state vehicle code.

Manufacturers are not required to register as an ADP. But they will be incentivized to declare themselves as ADP’s for the simple reason that if they do not, their customers will be unable to register or use their vehicles in a state that has adopted the Act. If customers in one state were unable to register Ford vehicles but could register Honda vehicles, then everyone in that state would buy Honda automated vehicles and nobody would buy Ford. Under Section 7, once an ADP has designated an associated automated vehicle, the association remains until the ADP is not recognized by the state agency, ceases to exist under principles of corporate law, or affirmatively withdraws the designation.

This approach is a great way to allow manufacturers of automated vehicles to select the states in which they wish to be responsible for their vehicles. If they register as an ADP in Arizona, but not New Mexico, then their customers will be able to register and drive their vehicles on the public roads in Arizona, but not New Mexico. This can allow manufacturers to choose where they accept liability for the automated features of their vehicles.

However, this could cause problems. Assuming uniform adoption of the Act (which is unlikely), if manufacturers are selective with the states where they register as ADP’s then there could be adjacent states where a manufacturer is an ADP in state X, and not in state Y. If customers in state X drive their automated vehicle across the border into state Y, there could be legal questions if the manufacturer is liable for accidents that occur in state Y, especially if they specifically chose not to register there. This could lead to geofencing at state borders, requirements that shift control back to the human driver as they cross state borders, or a whole host of other potential solutions. These solutions could also cause problems. What if a driver is asleep as the vehicle crosses into a state where that manufacturer has not registered? What if the driver overrides and continues allowing the vehicle to drive? Has liability shifted from the manufacturer to the owner given the owner’s conscious choice?

Questions of tort liability, jurisdiction over manufacturers, and technological work-arounds could abound if OEM’s are selective with their registration as ADPs. But they should be allowed to select where they want to sell their automated vehicles if they will be required to legally be identified as the responsible entity. Sections 5, 6, and 7 of the Automated Vehicle Act will likely cause much debate in states that consider adopting the Act.

On Thursday, January 16, 2020, the Official Report of the Special Committee to review the Federal Aviation Administration’s Aircraft Certification Process was released, and it seems like quite a few people – i.e. very vocal critics of Boeing and the FAA – are not likely to be pleased by the lack of lambasting language in the report. This is only the most recent development in the still-unfolding story of the Boeing 737 MAX passenger airliner, the aircraft at the center of the two fatal crashes in October 2018 and March 2019 that killed 346 people in total. The committee’s report has been released amid outcry over recently disclosed internal documents diplomatically labeled as “troubling” and reports of impending job cuts and layoffs from companies within the Boeing 737 MAX supply chain. “Troubling” may be putting it mildly.

“The Committee applauds the remarkable gains in safety achieved by U.S. aviation and recognizes the safety benefits provided to the worldwide aviation system. However, each member of the Committee fully acknowledges the two foundational premises that risk will always exist in aviation and that no fatality in commercial aviation is acceptable.”

Official Report of the Special Committee to review the FAA’s Aircraft Certification Process, Executive Summary, page 6

With all of this currently happening, now is a good time for a bit of background to get up to speed. On October 29, 2018, Indonesian Lion Air Flight 610 departed from Jakarta and crashed into the Java Sea twelve minutes later, killing all 189 passengers and crew on board. Less than five months later on March 10, 2019, Ethiopian Airlines Flight 302 departed from Addis Ababa and flew for only six minutes before plummeting directly into a field at almost 700 miles per hour. Once again, all passengers and crew on board, totaling 157 people, were killed in the crash.

In the interim between the two crashes, partial fault was tentatively attributed to malfunctions in one of the aircraft’s Angle of Attack (AOA) sensors (check out these sources for a relatively clear and more in-depth explanation of the technical side of this).The MAX was equipped with the Maneuvering Characteristics Augmentation System (MCAS), an automated system designed to activate and correct the problem when the AOA began to reach unsafe levels. Unfortunately, it didn’t quite work out that way. Erroneous AOA readings during both flights led to MCAS automatically activating, pitching the nose of the aircraft down while pilot and co-pilot fought to right the aircraft. This happened repeatedly until the planes ultimately crashed.

Today, in the aftermath of the two planes crashing, it’s understood that the single faulty AOA sensor and MCAS are among a number of factors that caused the accidents. Since then, Boeing and the FAA have had no shortage of critics. Going into the entire timeline of events would take quite a while, so here are some highlights: the MAX was grounded around the world and the grounding remains in effect today; Boeing reportedly misled FAA regulators as to the full extent of MCAS’s abilities and failed to mention the system in pilots’ manuals; and the international aviation community has come down hard on the FAA’s certification process, with some countries demanding changes before it will allow the MAX to return to service. (A timeline of pretty much everything can be found here.)

“The FAA’s certification system is a process sanctioned by Congress, driven by regulation, directed by the FAA, and implemented by certified organizations and individuals. It is an iterative, comprehensive process grounded in the cumulative expertise of the FAA gained through over a half century of process management and oversight.”

Official Report of the Special Committee to review the FAA’s Aircraft Certification Process, Executive Summary, page 6

Clearly, Boeing and the FAA are ready for the plot twists to come to an end and the Special Committee’s report must seem like a small point of light in an incredibly long, bleak, and dark night. My personal flair for dramatics aside, the report does seem to come to different conclusions than most. The Committee, made up of five aviation safety experts chosen by Secretary of Transportation Elaine Chao, was formed to review: 1) “the FAA’s product certification process, the use of delegated authority, and the approval and oversight of designees”, and 2) “the certification process applied to the Boeing 737 MAX 8, which occurred from 2012 to 2017.” While the report does provide a number of recommendations, the Committee ultimately came to the conclusions that the FAA’s current certification process based on delegated authority is good one and that the FAA and Boeing followed the required process in certifying the MAX.

“As reflected by the safety statistics cited above, the Committee found that the FAA’s certification system is effective and a significant contributor to the world’s safest aviation system.”

Official Report of the Special Committee to review the FAA’s Aircraft Certification Process, Executive Summary, page 6

The report also cautions against a complete overhaul of the FAA’s delegation of authority framework for the certification process. However, members of Congress couldn’t seem to disagree more, especially after a slew of internal communications showing Boeing employees saying some pretty damning things were released earlier this month – calling regulators ‘clowns’ is never a good call. One particularly vocal FAA critic and crusader for legislative action is Peter DeFazio (D-Ore.), Chair of the House Committee on Transportation and Infrastructure. Pulling no punches, DeFazio has stated that “the FAA rolled the dice on the safety of the traveling public” in allowing the MAX to fly despite knowing the risks.

“Any radical changes to this system could undermine the collaboration and expertise that undergird the current certification system, jeopardizing the remarkable level of safety that has been attained in recent decades.”

Official Report of the Special Committee to review the FAA’s Aircraft Certification Process, Executive Summary, page 8

The question now is how, or even if, this report will impact the calls for change. Recent plot twists caution that there’s no telling what will happen next.

Here you will find more information on the Expert Participants who are taking part in our 2020 Conference, including bios and links to their websites and work:

  • Silvia Stuchi Cruz – Founder, CorridaAmiga (Brazil)

Silvia Stuchi Cruz is a Postdoc in Sustainability at the University of Sao Paulo, with emphasis on active mobility. She has previously served as an environmental manager at the University of Sao Paulo, and holds a PhD in Scientific Policy and Technology from State University of Campinas. While completing her PhD she interned at the University of Science and Technology in Lille/ France, and was a visiting student researcher at the VTT Technical Research Centre of Finland. Silvia has 8 years of experience in sustainability and climate change, along with 6 years of work on pedestrian mobility. A passionate active transportation advocate, she is the founder of the NGO “Corrida Amiga” which works with Brazilian communities (public schools, as wel as institutions for elderly people and people with disabilities) to promote pedestrian mobility and to develop projects, campaigns and tools related to walkability, accessibility and right to the city.   

  • Dr. Rohit Baluja – Chairman, Institute of Road Traffic Education (India)

Rohit Baluja has a PhD in Civil Engineering from the University of Birmingham. Rohit is now a visiting faculty at the School of Civil Engineering, University of Birmingham as well as at the Sardar Vallabhai Patel –Indian National Police Academy, Hyderabad.

Rohit established the Institute of Road Traffic Education (IRTE)as a not for profit organization in New Delhi  1991, which has led to the establishment of the College of Traffic Management in the NCR Delhi which is the only single umbrella facility for research and training in all the areas of traffic management. The College of Traffic Management has now been recognized as the Centre for Excellence in Road Safety for the South East Asian Region.

Rohit is a Member at the United Nations Road Safety Collaboration. As President IRTE, he is Observer at the United Nations Global Forum for Road Traffic Safety (Working Party 1). The IRTE has been granted the Roster Consultative Status by the United Nations Economic and Social Council and have recently signed an MOU with the United Nations towards promoting road safety in South East Asia.

  • He Shanshan – Partner, Anli Partners (China)

He Shanshan is the head of Autonomous Driving Law Centre of Intelligent & Connected Mobility Academy, and leader of Automobile and Artificial Intelligence Group of Anli Partners. Ms. He Shanshan is also the member of Autonomous Driving Expert Committee of Beijing.

Shanshan has been closely working on the automated driving projects and conducting research and advice on law, policy, ethics and standards regarding AI and autonomous driving. She also keeps close communication and cooperation with industry field, academic field and relevant authorities domestically and overseas on AI and autonomous vehicles. 

Shanshan obtained the bachelor of law degree and master of law degree from Tsinghua University School of Law, the master of law degree from Columbia University in New York. She is both qualified in P.R. China and New York.  Her previous experience includes work in an international law firm and the legal department of an international automobile company.

  • Luiz Otávio Maciel – Miranda Advisor, Traffic Department of State of Pará (Brazil)

Luiz Otávio Maciel Miranda is an advisor at the Traffic Department of the State of Pará – DETRAN/PA, where he has worked since 1983. He is the Brazilian delegate at the Global Forum for Road Traffic Safety (WP.1) of the United Nations Economic Commission for Europe (UNECE) since 2016. Counselor at the National Traffic Council (CONTRAN) representing the Ministry of Health, working on the drafting of National Road Safety Regulations and the enforcement of the Brazilian Traffic Code. He worked as a consultant at the Global Road Safety Partnership (GRSP) at the Bloomberg Philanthropies Global Road Safety Programme (BPGRSP) and the Bloomberg Initiative for Global Road Safety (BIGRS) for Brazil. He worked as an advisor at the National Traffic Department (DENATRAN), Technical Consultant at the Ministry of Health and Counselor at the State Traffic Council (CETRAN/PA)

Mr. Miranda graduated from Federal University of Pará with degrees in Civil Engineering (1985), Mathematics (1983) and Science (1982).

  • Pramanand Gopaldu – Lead Engineer, Traffic Management and Road Safety Unit (Mauritius)

Pramanand Gopaldu is a Lead Engineer for Traffic Management and Road Safety, a department under the aegis of the Ministry of Land Transport and Light Rail in Mauritius. For the past 15 years he has devoted much of his practice to maximize road safety and to address road traffic issues.

Mr Gopaldu graduated from the University of Mauritius, with a bachelor degree in Civil Engineering in 1994. He then earned his Master’s degree in Traffic from Monash University, Australia, in 2012.

  • Phil Monture – (Six Nations of the Grand River)

Beginning in 1975, Phil developed a long-term research program and supervised the research for the Six Nations of the Grand River as relates to lands which are no longer used for their benefit or legal surrender obtained under prevailing legislation. He was the principle architect of the ongoing 1995 litigation against Canada and Ontario for an accounting of all Six Nations Lands, resources and assets supposedly held and managed on Six Nations behalf by the Crown(s). 

Phil has also been active in taking Six Nations unresolved Land Rights issues to the United Nations and working with developer proponents utilizing the legal duty to consult and accommodate; implementing the UN Declaration on the Rights of Indigenous Peoples and its requirement to obtain our free, prior and informed consent. This has enabled the Six Nations Peoples to have partnerships and beneficiaries of over 1,000 MGW of Green Energy developments within Six Nations Treaty lands.

Utilizing Six Nations’ Sovereign Treaty relations with the Crown, Six Nations have undertaken protective measures through the Climate Development Mechanism of the UN to assert certain initiatives to counter climate change and to enhance their environment.

  • Raymond Hess – Transportation Manager, City of Ann Arbor (US)

Raymond Hess is Transportation Manager for the City of Ann Arbor, Michigan. Alongside a passionate team, he implements transportation initiatives that aim to improve safety and the livability of the community. Previously, he was Director of Planning Services at the Regional Transportation Commission of Southern Nevada and oversaw the Metropolitan Planning Organization for the greater Las Vegas Valley as well as a regional sustainable communities initiative known as Southern Nevada Strong. Prior to joining the RTC, Raymond worked for the City of Bloomington (IN), the City of Brooksville (FL) and was a Peace Corps Volunteer in the Ivory Coast West Africa.

  • Ellen Partridge – Policy and Strategy Director at Shared-Use Mobility Center (US)
Ellen Partridge has nearly 20 years of work in public transit administration and operations at both the federal and transit agency levels. She was appointed Chief Counsel for the USDOT Research and Innovative Technology Administration and also served as Deputy Assistant Secretary for Research and Technology and Chief Counsel for the FTA. She is intimately familiar with the legal and regulatory landscape of public transit, including the nuances of public agency partnerships with private mobility providers.
 
At the Chicago Transit Authority, she focused on policy initiatives – first as Deputy General Counsel for Policy and Appeals and then in the Strategic Operations unit that deployed new technology and trained supervisors on how to use it to improve bus service. Before joining the nation’s second-largest transit agency, she practiced environmental law with the firms of Jenner & Block in Chicago and Van Ness Feldman in Washington, D.C. She lived in the Republic of Palau, serving as counsel to its government as it transitioned from being a United Nations Trust Territory to independence.
 
While practicing law, she taught environmental and natural resources law as an adjunct professor at Northwestern University and DePaul University Law Schools. Ellen is a fellow with Leadership Greater Chicago, was awarded a fellowship with the German Marshall Fund and was a Senior Fellow with the Environmental Law and Policy Center. She earned her law degree at Georgetown University Law School and an MBA from the University of Chicago.
 
  • Daniel Arking – Counsel, Department of Law, City of Detroit (US)

Daniel Arking is an Assistant Corporation Counsel in the City of Detroit Law Department. In this role, Daniel works on a variety of regulatory and transactional matters related to land use and zoning, recreation, transportation and mobility, and public private partnerships. In the mobility space, Daniel has worked with the City’s mobility innovation team to expand access to a variety of transportation options, including the development of guidelines for the operation of dockless electric scooters in Detroit. Since then, multiple scooter operators have deployed over 1,000 scooters in neighborhoods across the City with notable success.

Prior to joining the Detroit Law Department in 2015, Daniel served as an Associate in the Washington DC office of Holland & Knight LLP and as an aide in the New York City Mayor’s Office under the Bloomberg Administration. Daniel holds a Juris Doctor from the Georgetown University Law Center and a Bachelor of Arts in Physics from the University of Chicago.

  • Jeff P. Michael, EdD – Distinguished Scholar and Leon S. Robertson Faculty Development Chair in Injury Prevention, Health Policy and Management, Johns Hopkins University (US)

Dr. Michael is an accomplished national and international leader with demonstrated leadership in analysis, development and implementation of programs to improve road safety – both in the United States and in other nations. As the Leon S. Robertson Faculty Development Chair in Injury Prevention, Dr. Michael’s current research focuses on the development of strategies for utilizing emerging mobility technologies to improve safety and reduce health disparities. The combination of artificial intelligence, shared rides and electric vehicles is predicted to transform mobility patterns in the next decade.  Inherent in this transformation is the potential to deliver mobility services to populations that have historically suffered from limited access to health care, nutritious food and economic opportunities. However, the prevailing market-driven mobility movement is unlikely to reach these underserved populations absent a deliberate scientific and policy initiative dedicated to this purpose.

As Coordinator of the New Mobility Initiative at the Center for Injury Research and Policy, Dr. Michael is leading an effort to develop evidence-based policy models to steer the deployment of New Mobility products and services for public health benefit. The New Mobility Initiative is working closely with the City of Baltimore to conduct and evaluate mobility experiments and policy evaluations.  

  • Emily Frascaroli – Managing Counsel, Product Litigation Group, Ford Motor Company (US)

Emily Frascaroli is managing counsel of the Product Litigation Group at Ford Motor Company, including the product litigation, asbestos, and discovery teams. She also advises globally on automotive safety, regulatory, and product liability issues, including a focus on autonomous vehicles and mobility. She has extensive experience handling complex product litigation cases, regulatory matters with the National Highway Traffic Safety Administration and other governmental entities, and product defect investigations. She also is co-chair of the Legal and Insurance Working Group for the University of Michigan’s Mcity. In 2017, she was appointed by Gov. Rick Snyder to the Michigan Council on Future Mobility, and in 2019 she was appointed by Ohio Gov. John Kasich to the DriveOhio Expert Advisory Board.

She earned her JD, cum laude, from Wayne State University and was an editor of the Wayne Law Review. She received her BS in aerospace engineering from the University of Southern California and her MEng in aerospace engineering from the University of Michigan. Prior to practicing law, she worked in engineering at both Ford and NASA.

  • Jessica Robinson – President and Executive Director, Michigan Mobility Institute (US)

Jessica Robinson is President and Executive Director of the Michigan Mobility Institute where she works to accelerate the development of talent for the growing mobility industry. The Institute is the first initiative of the Detroit Mobility Lab which she co-founded to focus on building the mobility talent infrastructure necessary to shape the sector’s future within the City of Detroit. She has more than 10 years of operating experience with mobility businesses at Zipcar and Ford Smart Mobility and a background in technology and innovation launching startup accelerator programs at Techstars with industry-leading corporate partners.

The Uniform Law Commission (“ULC”) is a non-governmental body composed of state-selected lawyers who oversee the preparation of “Uniform Laws” to be proposed to the states for adoption. The group’s most well-known body of law will be familiar to any lawyer or law student who paid attention in first-year contracts: the Uniform Commercial Code (UCC). Not all projects of the ULC are as successful as the UCC. In fact, many are never adopted by any state.

The ULC appointed a Drafting Committee on Highly Automated Vehicles in 2017.  The Committee recently completed an Automated Vehicles Act, titled “The Uniform Automated Operation of Vehicles Act,” which is a “uniform law covering the deployment of automated driving systems (SAE levels 3 through 5).” The Act is intended to cover a vast array of issues likely to be faced by states in the coming decades as autonomous vehicles become more ubiquitous. The ULC description of the Automated Vehicles Act states:

The Uniform Automated Operation of Vehicles Act regulates important aspects of the operation of automated vehicles.  This act covers the deployment of automated vehicles on roads held open to the public by reconciling automated driving with a typical state motor vehicle code.  Many of the act’s sections – including definitions, driver licensing, vehicle registration, equipment, and rules of the road – correspond to, refer to, and can be incorporated into existing sections of a typical vehicle code.  This act also introduces the concept of automated driving providers (ADPs) as a legal entity that must declare itself to the state and designate the automated vehicles for which it will act as the legal driver when the vehicle is in automated operation.  The ADP might be an automated driving system developer, a vehicle manufacturer, a fleet operator, an insurer, or another kind of market participant that has yet to emerge.  Only an automated vehicle that is associated with an ADP may be registered.  In this way, the Automated Operation of Vehicles Act uses the motor vehicle registration framework that already exists in states – and that applies to both conventional and automated vehicles – to incentivize self-identification by ADPs.  By harnessing an existing framework, the act also seeks to respect and empower state motor vehicle agencies.

The final version of the act can be downloaded here.

This Act is a step in the right direction. It does much of the leg-work for state legislatures to exempt autonomous vehicles from a variety of state laws by providing language which can be easily inserted into various state vehicle codes. States can choose to enact certain parts of the Uniform Act, picking and choosing the sections or phrases they want and discarding the rest. This is beneficial because it will likely mean more states will enact some form of AV exemption. However, it also means there could be substantial variation between states that adopt some but not all of the Act. The passage of a Uniform Act by the ULC does not ensure there will be uniform adoption.

The act is not very long, only 28 pages including all the comments and legislative notes. There are many sections that deserve a more extensive dive, but I want to begin with a subsection that relates to a topic I’ve written about before: Platooning. The Act does not include a provision that would legalize platooning, but it does contain a single provision that addresses state laws regarding minimum following distance: Section 9 (h). Section 9 covers “Rules of the Road.” Subsection (h) states:

A provision of [this state’s vehicle code] imposing a minimum following distance other than a reasonable and prudent distance does not apply to the automated operation of an automated vehicle.

The comment to the section clarifies subsection h:

[T]his section provides that a numerical minimal following-distance requirement does not apply to the automated operation of automated vehicles. These numerical minimums may be unnecessarily large for automated vehicles that react faster than human drivers. However, the common “reasonable and prudent” following-distance requirement continues to apply. This bracketed subsection (h) differs in scope from following-distance legislation enacted in some states to facilitate the platooning of vehicles, particularly commercial trucks, that use advanced technologies but may not necessarily qualify as automated vehicles.

As I’ve written about before, platooning vehicles that follow at incredibly close distances could be considered “reasonable and prudent” given the connected nature and quick response times of the technology. If the Uniform Act were adopted in some states, it could present the opportunity to argue that there is, or should be, a reasonable car standard applied to autonomous vehicles. The act also solves the problems of states with 300-500-foot following distance requirements for trucks.

The passage of the Act is exciting for many reasons. It shows that the legal world is taking autonomous vehicles seriously, and is taking fundamental steps to create a legal framework within which these vehicles can operate. It also provides a baseline for states to modify their existing laws to allow autonomous vehicles to be exempted from many requirements that need not apply to autonomous vehicles. For example, there is no need for a steering wheel or gas pedals in an AV. There may be a need for a large touchscreen like in the various Tesla models, which would be distracting in traditional vehicles. The Act will hopefully spark discussions about the proper way to regulate autonomous vehicles at the state level, and may even spark debate over the merits of varied state or uniform federal regulation.

Imagine that you and your friends go out for a night on the town. By the time you are well and tired, it seems as though everyone else simultaneously had the same idea. With everyone around you clamoring to call an Uber or Lyft, you and your friends take one look at the gridlocked streets and agree that the roads are just not the way to go tonight. However, the skies look clear and traffic-free, so why not take a helicopter across town? While this may seem like the start of a very odd joke, it’s a future that Los Angeles-based startup up Skyryse is looking to bring to the present and a reality that is closer than you might think.

“Skyryse is on a mission to get people where they want to be quickly, affordably and safely.”

Skyryse, Our Vision

While this may be enough to start stirring up the questions in your mind, here’s another twist to Skyrise’s plans for urban travel: fully automated flight. In mid-December Skyrise held a demonstration highlighting a helicopter that took off, flew for fifteen minutes, and then landed, all fully automated.

The demonstration showed a lot of what Skyryse has in mind for making urban air mobility a widely adopted norm for traveling short distances. For one, Skyryse unveiled its Skyryse Flight Stack, which “comprises of technology that automates flight in [Federal Aviation Administration]-approved helicopters, safety and communication systems, and a network of smart helipads to ultimately create a new transportation system.”

“Unlike other companies building autonomous vertical takeoff and landing (VTOL) aircraft from scratch or only for the military, Skyryse refits existing consumer-grade, dependable and certified aircraft and technologies with software and hardware innovations.”

PRNewswire.com

Simply put, Skyryse isn’t building new aircraft, it’s taking what already works and adding a little bit of spice. The company’s goal is to develop a fully autonomous VTOL flight system that can be installed in both legacy and future helicopter models, as well as helipads capable of communicating with the outfitted aircraft information such as changing weather conditions or low-flying objects. Skyryse aims to become the first fully operational air taxi service available to the public that doesn’t break the bank.

Now, you may be thinking that a self-flying helicopter is a ride on which you would rather not be a passenger but have no fear. Passengers on aircraft in Skyryse’s fleet are accompanied by a trained and certified pilot who oversees the flight system and can take over the controls in the event of an emergency or potential malfunction. While this does leave open the potential for awkward conversation, it does add an extra layer of safety and checks on the autonomous system.

I personally think this sounds incredible, if it can–no pun intended–get off the ground. Why not take to the skies to avoid the mad rush of cars and congestion of city streets? And why not use already available aircraft to do it? It all makes sense and seems pretty logical. However, we all know that logic does not always guarantee success.

My main concerns surround public perceptions and pricing. For perception, I am curious about the projected amount of time it will take before there is enough demand to justify a supply. How long will air taxi companies have to advertise and ultimately wait before enough people know about and trust their autonomous aircraft? As for pricing, the concerns and questions are probably pretty clear. How is this going to be affordable for everyone, and when? It has been reported that Skyryse plans to release the details of how it will achieve affordable pricing at some point this year. I for one am looking forward to the day when I can hop in line at a helipad and quickly fly across town, all without breaking the bank.

Tesla and the State of Michigan have settled Tesla’s constitutional challenge to Michigan’s refusal to grant Tesla’s request for a Class A license, which would have allowed Tesla to open a company-owned dealership in the state. The lawsuit, which was filed in federal court in the Western District of Michigan in 2016 and was scheduled to go to trial this year, grew out of a 2014 legislative amendment to Michigan’s automobile dealer law that made it unlawful for an automobile manufacturer to open its own retail store in the state, essentially forcing automobile manufacturers to distribute cars through franchised dealers. I detailed the nefarious circumstances and effects of the 2014 legislation in Tesla, Dealer Franchise Laws, and the Politics of Crony Capitalism, 101 Iowa L. Rev. 573 (2016).

There are two important terms to the settlement: (1) the state will not contest Tesla’s right to operate service centers in Michigan through a subsidiary; and (2) the state will not contest Tesla’s right to market cars to consumers in Michigan through a “gallery” model. This settlement  allows Tesla to sell and service cars in Michigan as it wants, and thus represents a total victory for Tesla in Michigan. It could also be a tipping point in Tesla’s ongoing battle for the right to engage in direct distribution in other states.

In my view, the service component is the more important aspect of the settlement. Tesla was already able to sell cars to customers in Michigan by marketing them over the Internet and delivering them out of state, so the agreement on the gallery marketing model is helpful but not essential. On the other hand, until today Tesla was prohibited from opening a service center in Michigan, which required Michigan Tesla owners to drive to Ohio for service. It will now be able to open service centers in Michigan through a subsidiary. (The subsidiary requirement will not impose any greater burden than a few hours of corporate lawyer time). Having access to service centers in Michigan will significantly increase the appeal of owning a Tesla in the Wolverine State.

The settlement also allows Tesla to open galleries in the state, although it still may not transact “sales” of its cars in the state. In effect, this means that Tesla can have sales people show its cars to potential customers in retail spaces (i.e., malls), arrange for test drives, help customers figure out what options they want on their car, and facilitate the paperwork. The customer will then have to complete the actual sales transaction over the Internet or telephone with Tesla in California (or wherever Tesla houses its sales function). The car will then be delivered to the customer in Michigan, which will increase the convenience of the buyer experience. The only remaining limit is that the sales contract needs to say that title will transfer out of state; otherwise, the customer can configure and order the car from within the state. 

There is no good reason to deny Tesla the right to open whatever sort of sales operation it wants in Michigan, but this remaining limitation will have relatively little effect on Tesla’s business model. Even in states where Tesla has complete freedom to sell cars as it wants, it doesn’t generally open traditional dealerships with lots of inventory sitting on a lot. The company operates on a custom order basis and usually uses the sort of galleries it will now be able to open in Michigan. So, while still arbitrary and annoying, the Michigan settlement gives Tesla everything it needs to compete in Michigan.

Tesla is clearly a big winner in this settlement. Who are the other winners? And who are the losers? 

Other new electric vehicle manufacturers, like Ford and Amazon-backed Rivian Motors (which will begin selling cars in 2020) and Faraday Future (which hopefully will be able to get to market eventually) will benefit from the trail Tesla has blazed. Having settled on these terms with Tesla, it would seem legally very difficult for the state to deny a similar arrangement to any other company situated like Tesla. 

The car dealer’s lobby, which has fought tooth-and-nail to stop Tesla from distributing directing on a state-by-state basis, is clearly a big loser. Michigan, the state with the most pro-dealer law on direct distribution, has now opened the doors for new EV companies to bypass the traditional dealer model entirely.

In the short run, traditional car companies like General Motors and Ford are also losers. GM, in particular, has backed the dealers politically in opposing the right to engage in direct distribution, apparently because forcing Tesla to distribute through the dated and increasingly inefficient dealer model will slow Tesla’s market penetration. Not only does the Michigan settlement allow Tesla to avoid the cumbersome dealer model and to start gaining significant market share in America’s car capital, but it’s far from clear that traditional car companies that do franchise independent dealerships would be eligible to operate their own direct distribution system on a similar model. In other words, the Michigan settlement may permit Tesla and other EV manufacturers to leapfrog traditional car companies on distribution.

Just as there is no good basis in public policy to limit Tesla’s right to engage in direct distribution, there is also no reasonable basis to prohibit it to traditional car manufacturers either. As I have previously detailed at length, there is simply no consumer protection reason that any car company shouldn’t be able to choose how it sells cars to consumers. As companies like Tesla and Rivian accustom car buyers to the benefits of dealing directly with the manufacturer, there will be increasing competitive pressure on GM, Ford, Chrysler, and foreign auto makers to seek legislative changes in hold-out states like Michigan that still prohibit direct distribution.

Finally, although the immediate consequences of the settlement will be felt only in Michigan, the settlement will put increasing pressure on other hold-out states that still block Tesla from selling to consumers. The more states that allow direct distribution and the more customers that experience it, the less credible the dealers’ lobby will be in arguing that direct distribution harms consumers. With new entry by other companies like Rivian on a direct distribution model, the political and legal battles over car distribution are at a tipping point. Although there will still be a place for franchised dealers to play a role in car distribution for some time, the inflexible and mandatory system created by the dealer laws of the mid-twentieth century is on its last legs.

If there are any ideas that the internet believes to be the truth in this modern day in age, I think that the following would at least make the list: the government is likely watching you through the camera in your laptop, and Facebook’s algorithm may know you better than anyone else. While the internet normalizes being surveilled – and George Orwell can be heard continuously rolling over in his grave – the collection, analysis, and sale of information and user data is something to, at the very least, keep in mind.

Target can predict when a shopper is due to give birth based on subtle changes in shopping habits (going from scented to unscented soap, for example); your phone tracks where you are and how often you go to the point that it recognizes your patterns and routines, suggesting certain destinations you visit regularly; and health insurance companies believe they can infer that you will be too expensive to cover simply from looking at your magazine subscriptions, whether you have any relatives living nearby, and how much time you spend watching television. It is both fascinating and startling in equal measure.

When we narrow our focus to transportation and mobility, there is still an entire world of information that is being collected, sold, and turned into, for example, new marketing strategies for companies purchasing that data from brokers. Other times, the actor using that data-turned-actionable intelligence is a government entity. Either way, it’s good know and understand some of what is being collected and how it may be used, even if it’s only the tip of the iceberg. Car insurance companies track and collect data on how often drivers slam on brakes or suddenly accelerate and offer rewards for not doing those things. People have been subjected to police suspicion or even been arrested based on incorrect geolocation data collected from their cell phones.

Despite the potentially grim picture I may have painted, user data isn’t always wielded for evil or surveillance. Recently, popular navigation app Waze added a feature that allows its users to report unplowed roads plaguing drivers during the winter months. The feature was developed through collaboration with the Virginia Department of Transportation (VDOT). Users in areas with inclement winter weather are now notified when they are coming upon a roadway that is reportedly in need of a snowplow. In addition to providing users with information and warnings, Waze also partners with transportation agencies across the U.S. and provides these agencies or local governments with this winter transportation information through the Waze for Cities Data program. The point is to make responsible parties aware of the areas that are still in need of a snowplow and assist them in prioritizing and deploying resources.

This sort of data collection is innocent enough and helpful in a person’s everyday life. According to Waze, the data is anonymized and contains no personally identifiable information (PII) when it becomes accessible to government agencies. However, as cars and cities become smarter the risk of an individual user’s data being used for more concerning purposes is likely to increase. This danger is in addition to the privacy risks that come from carrying around and depending upon personal devices such as cell phones.

“[Cars are] data-collecting machines that patrol the streets through various levels of autonomy. That means that our mobility infrastructure is no longer static either, that infrastructure is now a data source and a data interpreter.”

Trevor English, InterestingEngineering.com

Uber went through a phase of tracking users even while not using the app; a number of smart city technologies are capable of capturing and combining  PII and household level data about individuals; and the City of Los Angeles wants to collect real-time data on your individual e-scooter and bikeshare trips – California’s legislature doesn’t exactly agree. As these capabilities are advancing, so is the law, but that doesn’t necessarily mean that the race is a close one. So, while our cars and scooters and rideshare apps may not yet be the modern iteration of Big Brother, there’s always tomorrow.

Several major OEMs have recently announced scaling back of their shared or automated mobility ventures. Ford and Volkswagen are giving up investments in “robotaxis” – the CEO of their software partner, Argo, was quoted saying he “hates the word” anyway – and similar services operated by German automakers are withdrawing from various markets or shutting down altogether, after overextending themselves during the last 18 months.

Two separate trends seem to contribute to that movement. The first one, car ownership is still growing worldwide, albeit modestly – roughly 1% per year over the last ten years in Germany, for example – while sales of new cars is slumping. It is important to differentiate these two: while new car sales affect the revenues of OEMs, and may indicate changes in consumption patterns, car ownership rates indicate people’s attitude vis-à-vis car ownership better. In that sense, we see a continued attachment to personal car ownership, a cultural phenomenon that is much more difficult to displace or even disrupt than what some may have thought previously. Hence, the dreaded “peak car” that will relegate the iconic 20th century consumer good to museums may not materialize for a while.

The second trend has to do with an observation made time and again: OEMs are not naturally good at running mobility services: their business is making cars. As one bank analyst put it, no one expects Airbus or Boeing to run an airline. Why should it be any different with car OEMs? Thinking about the prospects of automation, it became commonplace for large industrial players to partner with specialized software developers to develop the automated driving system. That may result in a great product, but it does not give create a market and a business plan when it comes to the AVs themselves. As it turned out, the main business plan, which was to use these cars as part of large car-sharing services or sell them to existing mobility operators, ran into a some roadblocks: OEMs found themselves competing with already existing mobility operators in a difficult market; and putting an AV safely on the road is a much more daunting task than once thought. As 2019 comes to a close, we have yet to see an actual commercial “robotaxi” deployment outside of test runs.

This second trend puts a large question mark on the short and medium term financial viability of investments in “robotaxis” and automated mobility operations, generally. OEMs and their partners, looking for ways to put all those vehicle automation efforts to profitable use, look at other markets, such as heavy, non-passenger road and industrial vehicles. Nevertheless, no one seems poised to completely exit the automated passenger mobility market; they all keep a foot in the door, continuing their tests and “gathering more data,” in order to allegedly understand the mobility needs of road users. Beyond these noble intentions, however, there is an exit plan: if all else fails, they can monetize their data sets to data hungry software developers.

In the end, this comes back to a point frequently addressed on this blog, that of safety. Technological advances in automation (broadly speaking) are bringing increased safety to existing cars, and they will continue to do so. We might have become overly fixated by the golden goose of the “Level 5” robotaxi (or even Level 3), which may or may not come in the next ten years, neglecting the low-hanging fruit. While laugh at our ancestors dreaming about flying cars for the year 2000, our future selves scoff at us for chasing robotaxis by 2020.