Regulation

Up to now, the way forward for roadways-based, commercial automated mobility remained somewhat of a mystery. Surely, we would not see AVs in the hand of individual owners anytime soon – too expensive. “Robotaxi” fleets commanded by the likes of Uber and Lyft seemed the most plausible option. There was, at least in appearance, a business case and that most industry players seemed to be putting their efforts towards an automated version of common passenger cars.

Over the course of 2019, the landscape slowly but steadily changed: public authorities started to worry more about safety and the prospects of seeing fleets of “robotaxis” beyond the roads of Arizona, Nevada or California seemed remote. This is how automated shuttles found their way to the front of the race towards a viable business model and a large-scale commercial deployment.

Many now mock these slow-moving “bread loafs,” ridiculing their low speed and unenviable looks. However, some of these comments appear slightly disingenuous. The point of the shuttles is not “to persuade people to abandon traditional cars with steering wheels and the freedom to ride solo.” I don’t see any of these shuttles driving me back home to Montreal from Ann Arbor (a 600 miles/1000km straight line). But I see them strolling around campuses or across airport terminals. The kind of places where I don’t quite care about the good looks of whatever is carrying me around, and also the kind of place where I wouldn’t take my car to anyway. There might be much to say about how certain electric vehicles marketed directly to the end-user failed because of their unappealing design, but I don’t plan to buy a shuttle anytime soon.

Looks aside, these automated “turtles” have a major upside that the “hare” of, say, Tesla (looking at you, Model 3!) may not dispose of. Something which happens to be at the top of the agenda these days: safety. While notoriously hard to define in the automated mobility context (what does safety actually imply? When would an AV be safe?) removing speed from the equation immediately takes us into a safer territory; public authorities become less concerned, and more collaborative, agreeing to fund early deployment projects. Conversely, scooters irked a lot of municipal governments because they go too fast (among other things). As a result, there was little public appetite for scooters and operators were forced to withdraw, losing their license or failing to become commercially viable.

As a result, it is the safe vein that various industry players decided to tap. Our turtles are indeed slow, with a top speed of 25mph, usually staying in the range of 15 to 20 mph. This is no surprise: that is the speed after which braking means moving forward several dozen if not hundreds of feet. Within that lower bracket, however, a vehicle can stop in a distance of about two cars (not counting reaction time) and avoid transforming a collision into a fatality. Hence, it goes without saying that such shuttles are only suitable for local transportation. But why phrase that as an only? Local transportation is equally important. Such shuttles are also suitable for pedestrian environments. Outside of the US, pedestrians have their place on the road – and many, many roads, across the globe, are mostly pedestrian. Finally, they can also be usefully deployed in certain closed environments, notably airports. In many places, however, deployment of such shuttles on roadways might require some additional work – creation of lanes or changes to existing lanes – in order to accommodate their presence. Yet the same observation can also be made for “robotaxis,” however, and the adaptations required there may be much more substantial. The limited applications of automated shuttles may be what, ultimately, makes them less appealing than our Tesla Model 3 and its promises of freedom.

Overall, turtle shuttles appear closer to a marginal development from widely used rail-based automated driving systems, rather than a paradigm shift. That might precisely be what makes them a good gateway towards more automation in our mobility systems; there is wisdom in believing that we will have a better grasp of the challenges of automated mobility by actually deploying and using such systems, but it is not written anywhere that we need to break things to do so.

The California DMV recently released several 2019 reports from companies piloting self-driving vehicles in California. Under state law, all companies actively testing autonomous vehicles on California public roads must disclose the number of miles driven and how often human drivers were required to retake control from the autonomous vehicle. Retaking control is known as “disengagement.” The DMV defines disengagements as:

“[D]eactivation of the autonomous mode when a failure of the autonomous technology is detected or when the safe operation of the vehicle requires that the autonomous vehicle test driver disengage the autonomous mode and take immediate manual control of the vehicle.”

Because of the proprietary nature of autonomous vehicle testing, data is not often publicly released;  this is one of the few areas where progress data is made publicly available. The 60 companies actively testing in California cumulatively traveled 2.88 million miles in 2019. The table below reports the various figures for some of the major testers in California.

Company Vehicles Active in CA Miles Driven in 2019 Engagements Engagements per 1,000 miles Average Miles Between Engagements
Waymo 153 1.45 Million 110 0.076 13,219
GM Cruise 233 831,040 68 0.082 12,221
Apple 66 7,544 64 8.48 118
Lyft 20 42,930 1,667 38.83 26
Aurora ? 13,429 142 10.57 95
Nuro 33 68,762 34 0.494 2,024
Pony.ai 22 174,845 27 0.154 6,493
Baidu 4 108,300 6 0.055 18,181
Tesla 0 0 0 0 0

What these numbers make clear is that there are several contenders who have made significant progress in the autonomous vehicle space, and there are some contenders which are not yet so competitive. Companies like Waymo, GM Cruise, and Baidu (which also tests extensively in China) have made incredible progress in decreasing the frequency at which a driver must engage with an automated vehicle. Others, like Apple, Lyft, and Aurora, while making progress, are nowhere near as sophisticated in avoiding engagements yet. Noticeably Tesla, the manufacturer frequently in the news for its “Autopilot” feature, does not test on public roads in California. The company says it conducts tests via simulation, on private test tracks, public roads around the world, and “shadow-tests” by collecting anonymized data from its customers during normal driving operations.

What these numbers seem to illustrate is that the autonomous vehicle industry is not all on par, as many often believe. It is often said that Henry Ford did not conceive the idea of an automobile; he perfected it. Similarly, companies like Waymo or GM may be the first to perfect autonomous vehicles, and gain an incredible market advantage once they do so. They are striving to be the Ford’s in this space, while others look like they’re still manufacturing carriages. However, despite these impressive numbers from a select few, the companies themselves think these metrics “do[] not provide relevant insights” (per Waymo) and that the idea that they give any “meaningful insight . . . is a myth” (per GM Cruise).

Why are the head and shoulder leaders on these metrics saying that they provide very little indication of progress on the technology? Disengagement reports may not be the best way for these companies to build trust and credibility in their products. They are only transparent in that they provide some data with no detail or context.

I was having a conversation about these disengagement numbers with a colleague* this week, and the topic of driver distraction arose. In the CA tests, the driver is constantly alert. Once these vehicles are in use for the general public, a notification to engage may not be effective if the driver is distracted. One reason these numbers do not provide particularly useful information is that for the metrics to be useful, at least two things must be true:

  • If the vehicle does not indicate it needs to disengage, no technical errors have been made; and
  • The driver is paying attention and can quickly engage when necessary.

In California testing, the drivers behind the vehicle are always alert and ready to take over. They may take over when the vehicle indicates they must, because of a malfunction or poor conditions. The driver can also engage when the vehicle has done something incorrectly, yet does not indicate that the driver needs to take over. This could include veering into a lane or failing to recognize a pedestrian.

One of the allures of autonomous vehicles is that a driver may not need to be 100 percent engaged for the vehicle to function correctly. However, current technology has not yet achieved this  result, as reiterated this past week by the National Transportation Safety Board (NTSB). The NTSB is an independent federal agency, which lacks enforcement power, but makes recommendations which are considered thorough and are taken seriously by policymakers.

The NTSB put forward many findings on Tuesday, February 25th regarding a Tesla crash that killed a California driver in March 2018. (A synopsis of the NTSB report and findings can be found here.) The facts of the crash involved driver of a Tesla in Autopilot mode, which struck a barrier between the highway and a left exit lane. NTSB found that the Tesla briefly lost sight of the lines marking the highway lane, and started to follow the right-most lane marker of the exit lane (because of fading on the highway lines) caused the vehicle to enter the “gore area.” This same action had apparently occurred several times in this exact vehicle, but the driver on previous trips was paying attention and was able to correct the vehicle. This time, the driver was playing a mobile game and did not correct the vehicle, causing the crash. Here was how NTSB presented three of their findings:

The Tesla’s Autopilot lane-keeping assist system steered the sport utility vehicle to the left into the neutral area of the gore, without providing an alert to the driver, due to limitations of the Tesla Autopilot vision system’s processing software to accurately maintain the appropriate lane of travel. (emphasis added)

The driver did not take corrective action when the Tesla’s Autopilot lane-keeping assist system steered the vehicle into the gore area, nor did he take evasive action to avoid the collision with the crash attenuator, most likely due to distraction by a cell phone game application. (emphasis added)

The Tesla Autopilot system did not provide an effective means of monitoring the driver’s level of engagement with the driving task.

Here we see a combined failure of both (1) and (2) presented above, combined with an inability to adequately monitor driver engagement. The vehicle took an action which it assumed to be correct, and thus did not notify the driver to take over. This combined with the driver not paying attention, failing to notice the need to disengage, and resulted in the crash. This tragic accident highlights that the AV industry still has many areas to improve before higher SAE level vehicles are ready for mass adoption. (The ADAS on the Tesla was SAE Level 2)

As I discussed last week, the federal Department of Transportation has taken a rather hands-off approach to regulation of automated vehicles, preferring to issue guidance rather than mandatory regulations. The  National Transportation Safety Board (NTSB) criticized this approach in their Tesla crash findings. The NTSB wrote that there has been “ Insufficient Federal Oversight of Partial Driving Automation Systems.”

The US Department of Transportation and the National Highway Traffic Safety Administration (NHTSA) have taken a nonregulatory approach to automated vehicle safety. NHTSA plans to address the safety of partial driving automation systems through enforcement and a surveillance program that identifies safety-related defect trends in design or performance. This strategy must address the risk of foreseeable misuse of automation and include a forward-looking risk analysis.

Because the NTSB lacks enforcement power, it cannot compel industry actors or other government agencies to take any action. It can only perform investigations and make recommendations. NTSB Chairman Robert Sumwalt had much to say regarding distracted driving, the AV industry, and the lack of government regulations in the hearing on Tuesday, February 25th.

“In this crash we saw an over-reliance on technology, we saw distraction, we saw a lack of policy prohibiting cell phone use while driving, and we saw infrastructure failures, which, when combined, led to this tragic loss,”

“Industry keeps implementing technology in such a way that people can get injured or killed . . . [I]f you own a car with partial automation, you do not own a self-driving car. Don’t pretend that you do.”

“This kind of points out two things to me. These semi-autonomous vehicles can lead drivers to be complacent, highly complacent, about their systems. And it also points out that smartphones manipulating them can be so addictive that people aren’t going to put them down,”

Chairman Sumwalt is right to be frustrated. The DOT and NHTSA have not regulated the AV industry, or ADAS as they should. Tragic accidents like this can be avoided through a variety of solutions; better monitors of driver engagement than torque-sensing steering wheels, lock-out functions for cell-phones when driving, stricter advertising and warning regulation by companies offering ADAS. Progress is being made in the AV industry, and automated vehicles are getting smarter and safer every day. But incidents like this that combine a failure of technology, regulation, and consumer use, do not instill public confidence in this incredible technology that will be beneficial to society. It only highlights how much farther we still have to go.

*I would like to thank Fiona Mulroe for the inspiration to take this approach to the disengagement report

In January of this year, the United States Department of Transportation and the National Science & Technology Council released Automated Vehicles 4.0: Ensuring American Leadership in Automated Vehicles Technologies (“AV 4.0”). The report is intended to act as a set of unifying principles across 38 federal departments, agencies, commissions, and Executive offices. It offers guidance and an overarching vision to state and local government agencies, as well as technical experts and industry participants. AV 4.0 builds on AV 3.0, which was released in 2018, and AV 2.0, which was released in 2017.

Consistent across the three iterations of Automated Vehicle reports produced under the Trump administration has been the wholly restrained voluntary/guidance approach, without mandates or true regulation laid down. This “light touch” approach recognizes that much of the regulatory action is taking place at the state level, and voluntarily by industry and other AV stakeholders. The lack of federal enforceability removes the hope of any near-term consensus or consistency to the coordination of states and industry approach to automated vehicles.

As in AV 3.0, AV 4.0 begins with a discussion of guidelines and broad overarching principles that the federal government will recognize when developing AV technology. The three Principles and associated sub-areas are:

  1. Protect Users and Communities
    • (a) Prioritize Safety
    • (b) Emphasize Security and Cyber Security
    • (c) Ensure Privacy and Data Security
    • (d) Enhance Mobility and Accessibility
  2. Promote Efficient Markets
    • (a) Remain Technology Neutral
    • (b) Protect American Innovation and Creativity
    • (c) Modernize Regulations
  3. Facilitate Coordinated Efforts
    • (a) Promote Consistent Standards and Practices
    • (b) Ensure a Consistent Federal Approach
    • (c) Improve Transportation System-Level Effects

While these broader principles are new to AV 3.0, the sub-areas within each principle are a mixture of old principles from AV 3.0, combined with some new government focuses. (The new components are italicized  in the above list) These new components center mainly around the Trump administration’s desire to “Buy American, Hire American,” and bring in new focuses for security, cybersecurity, and privacy. The report does indicate that DOT will establish manufacturing, performance, and operational standards to increase safety in AV testing and integration. Still, the parameters of these standards remain unclear.

However, the majority of the report is devoted to Section III: U.S. Government Activities and Opportunities for Collaboration. The  driving purpose of the report is to provide general descriptions of the vast array of government agencies that are responsible (or will be responsible) for some level of AV-related policies or subjects. The report detail both the big and small ways that federal agencies, departments, offices, etc. will play a role in the development and commercialization of AVs. However, there is no real substantive or specific policy discussion.

The survey of government agency activity (and an appendix with links to government websites and contacts for agencies responsible for AV-related policies) are the real substance added. There is no description or plan of how interagency cooperation will occur, nor is there an overarching plan for the government’s approach to implementation. AV 4.0 is useful as a catalog for the various ways the federal government could interact with AV-policy but gives no further direction to how industry and states should regulate AVs. The DOT continues to kick the can down the road but has thankfully provided a clearinghouse of information on which agencies may be responsible for what activities, and the current efforts underway at the federal level, particularly on research and funding.

This restrained approach could be a good thing, given the rapid pace at which the AV industry is developing. However, there is a great deal more work that needs to be done at the federal level before any of the 10 core principles articulated can be realized. The Department of Transportation has requested public comment on AV 4.0.

There is no doubt that unmanned aerial vehicles (UAVs), i.e. drone aircraft or drones, are an increasingly popular and strangely normal aspect of our everyday lives in 2020. And how could they not be? When there is a product that can appeal to pretty much any and every one – from farmers wanting to efficiently monitor their crops, to those of us just looking to take the perfect selfie – it’s going to be explosively popular. Even military forces around the world are getting in on the action. The innovative uses for drones seem borderline infinite, and there is no questioning their utility even when applied in ways that may come as a surprise. 

One use that many people are likely familiar with is that of commercial delivery. A number of companies within the United States have been eyeing the drone delivery market for some time now, particularly UPS and Alphabet’s Wing. Typically, the Federal Aviation Administration’s (FAA) rules governing drone flight in the United States require, among other things, that the drone remain in the operator’s line of sight for the entirety of the flight. This generally goes for both hobbyists and commercial operators. However, the FAA, in an effort to encourage and not stifle innovation, created the Unmanned Aircraft Systems (UAS) Integration Pilot Program (IPP).

To promote continued technological innovation and to ensure the global leadership of the United States in this emerging industry, the regulatory framework for UAS operations must be sufficiently flexible to keep pace with the advancement of UAS technology, while balancing the vital Federal roles in protecting privacy and civil liberties; mitigating risks to national security and homeland security; and protecting the safety of the American public, critical infrastructure, and the Nation’s airspace.

Presidential Memorandum for the Secretary of Transportation, Unmanned Aircraft Systems Integration Pilot Program

Additionally, the FAA has in place one particular process that allows operators to obtain exemption from specific rules governing drone flight: Part 135 certification process. All IPP participants go through the Part 135 certification process, including those companies looking to dive into the package delivery market. Currently, “Part 135 certification is the only path for small drones to carry the property of another for compensation beyond visual line of sight.” Both UPS and Alphabet’s Wing are IPP participants and have been granted Part 135 certificates, although not for the same type of operations – you can check out the four types operations for which operators can be granted a Part 135 certificate here.

It was announced on October 1, 2019 that UPS subsidiary UPS Flight Forward was awarded a Part 135 Standard certification, the first ever. Flight Forward, in partnership with drone manufacturer Matternet, started in and has continued to hone its operation model for drone delivery within the healthcare industry, with WakeMed Hospital in Raleigh, NC as the starting point. It has been reported that one goal of the program is to test delivery of healthcare necessities in area where roads may not be a viable option – think natural disasters. 

“This is history in the making, and we aren’t done yet. . . . We will soon announce other steps to build out our infrastructure, expand services for healthcare customers and put drones to new uses in the future.”

David Abney, UPS chief executive officer

Recently, the Flight Forward drone delivery service program has expanded its services to the University of California San Diego (USCD) Health system where the company’s drones will be used to transport things like blood samples and documents short distances between centers.

Interestingly enough, a proposed rule from the FAA was just recently (February 3, 2020) published in the Federal Register. The proposal, titled Type Certification of Unmanned Aircraft Systems, essentially wants to open the door to more companies who want to get involved in small-package delivery via drone fleets. This type of regulatory framework for delivery drones should work much in the same way that the type certification process operates for other aircraft, a model-by-model certification process that allows approved models to then operate throughout the US. If you feel particularly strongly about this, the FAA is accepting public comment on the proposed rule until March 4, 2020.

This seems to be just the tip of the iceberg of what needs to be and may soon be done to promote widespread use of and explosive growth within the commercial drone delivery world, but it is definitely a big step toward getting that goal off the ground – no pun intended. If nothing else, this change is a good example of how the law is attempting to keep up with innovations in technology and increases in demand for such services, and how policymakers are remaining flexible in their approaches.

The past few weeks have shown the intricate connection that access to transportation has with human health and the global economy. The outbreak of Coronavirus in Wuhan China, leading to mass international transportation restrictions, is a case study in the effects that transportation has on our daily lives and on the global economy.

Coronavirus Timeline

  • China first alerted the World Health Organization or several cases of pneumonia in Wuhan at the end of December 2019.
  • The first death in China, which occurred on January 9th,  wasn’t announced until January 11th.
  • The first WHO reported case outside of China, in Thailand, occurred on January 13th.
  • The United States announced it would start screening passengers arriving in airports from Wuhan, after a second death was announced on January 17th. Many European countries followed suit on January 22nd
  • On January 23rd, China quarantined Wuhan, suspending air and rail departures
  • On January 24th, China shut down 13 more cities, affecting 41 million people. Several entertainment venues, including Shanghai Disneyland and sections of the Great Wall, were also shut down.
  • On January 25th, five more cities were placed under travel restrictions, increasing the total number of persons affected to 56 million. Hong Kong canceled Lunar New Year celebrations and restricted travel to mainland China.

In less than 4 weeks, China went from reporting pneumonia-like symptoms to restricting the travel of over 50 million people. Wuhan, a city of more than 11 million people, was shut down right before the beginning of the Chinese New Year, one of the busiest travel weeks in the world. The travel restrictions are meant to prevent the spread of the Coronavirus, a necessary tactic with more than 100 people dead, and more than 6,000 cases of infection.

The U.S., Europe, and Asia began enforcing new regulations to block visitors from China. At the same time, major airlines suspended flights to the country for the foreseeable future. The Chinese authorities shut down commercial flights and prohibited people from leaving Wuhan using buses, subways, or ferries. The restrictions also included blocking expressways. The reason for the shutdown: evidence suggests that the virus passes from person to person through close contact. One unintended consequence of the travel restrictions: stock market crashes.

The primary difficulty in shutting down Wuhan is that it is a central hub for industry and commerce in Central China. It is home to the region’s biggest airport and a deep-water port. Tens of thousands of travelers enter and depart Wuhan every day.

Access to hospitals is one of the most significant concerns about the outbreak. The power of the Chinese government to shut down transportation is perhaps most starkly seen in their goal to build a hospital in Wuhan in less than two weeks.

Restricting travel on the world’s second-largest economy on the eve of the busiest travel week in China caused the single largest day drop in U.S. stocks since September 2019. Millions of Chinese residents would typically make hundreds of millions of trips during the Chinese New Year to visit loved ones, celebrate the beginning of a new year, and enjoy time away from work. Last year, consumers in China spent $148 billion on retail and catering and generated $74 billion in domestic tourism on 415 million trips. China’s movie sector also brought in 10% of its annual revenue during the Chinese New Year. In response to the travel restrictions on January 25th, stocks like Disney, AMEX, and American Airlines all plummeted when markets opened Monday the 27th.

Limits on mobility and transportation affect things much more important than the U.S. stock market. The Chinese New Year is the most important celebration in the Chinese Calendar. It is a time to celebrate family, ancestors, and togetherness. Those affected by travel restrictions decided to forgo trips to see loved ones and visits to important cultural sites, as well as museums, galleries, and other sources of entertainment. The need to protect human health and prevent the spread of Coronavirus is paramount. But other than the Coronavirus affecting people’s physical health, the restrictions on mobility will prevent spiritual and familial connections that underpin Chinese society.

The impact transportation and mobility have on economics, and human health is clearly demonstrated in the Chinese travel restrictions. With 50 million citizens under “city-arrest” and the rest of the country reticent to travel, shockwaves have been felt across the globe. I hope the Coronavirus crisis can be solved quickly and efficiently, and that the Chinese can return to a sense of normalcy and free mobility.

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 labelled 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.

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.

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.

Over the last few years, emerging mobility technologies from CAVs to e-scooters have become the targets of malicious hackers. CAVs, for example, are complicated machines with many different components, which opens up many avenues for attack. Hackers can reprogram key fobs and keyless ignition systems. Fleet management software used worldwide can be used to kill vehicle engines. CAV systems can be confused with things as simple a sticker on a stop sign. Even the diagnostic systems within a vehicle, which are required to be accessible, can be weaponized against a vehicle by way of a $10 piece of tech.

For mobility-as-a-service (“MaaS”) companies, the security of their networks and user accounts is also at threat. In 2015 a number of Uber accounts were found for sale on the “dark web,” and this year a similar market for Lime scooter accounts popped up. Hacking is not even required in some cases. Car2Go paused service in Chicago after 100 vehicles were stolen by people exploiting the company’s app (the company is now ending service in the city, though they say it’s for business reasons).

The wireless systems used for vehicle connectivity are also a target. On faction in the current battle over radio spectrum is pushing cellular technology, especially 5G tech as the future of vehicle-to-vehicle communication. While 5G is more secure than older wireless networks, it is not widespread in the U.S., leaving vulnerabilities. As some companies push for “over-the-air” updates, where vehicle software is wirelessly updated, unsecure wireless networks could lead to serious vehicle safety issues.

So what can be done to deal with these cybersecurity threats? For a start, there are standard-setting discussions underway, and there have been proposals for the government to step up cybersecurity regulation for vehicles. A California bill on the security of the “internet-of-things” could also influence vehicle security. Auto suppliers are putting cybersecurity into their development process. Government researchers, like those Argonne National Labs outside Chicago, are looking for vulnerabilities up and down the supply chain, including threats involving public car chargers. Given the ever-changing nature of cybersecurity threats, the real solution is “all of the above.” Laws and regulations can spark efforts, but they’ll likely never be able to keep up with evolving threats, meaning companies and researchers will always have to be watchful.

P.S. – Here is a good example of how cybersecurity threats are always changing. In 2018, security researchers were able to hack into a smartphone’s microphone and use it to steal user’s passwords, using the acoustic signature of the password. In other words, they could figure out your password by listening to you type it in.

Last month FCC Chairman Ajit Pai announced a plan to allow unlicensed use of a 45-megahertz (MHz) chunk of the mid-band spectrum. How is this even close to related to mobility or transportation? In 1999, the FCC dedicated 75 MHz of the 5.9GHz band to vehicle-related communications and transportation safety, specifically to dedicated short-range communications (DSRC). Guess where that 45MHz portion is right now; you only get one try.

That’s right. Aiming for a 40-60 split in favor of unlicensed use, the FCC is cutting into the dedicated DSRC MHz to make room for what Chairman Pai likened to a “teenage phenom”. This reduction of the so-called “safety band” has garnered a healthy mix of responses, with the two opposing ends of the spectrum being vigorous support and scathing disbelief. For example:

“There’s always going to be something new just around the corner. If we’re going to be afraid to take advantage of the technology that’s available today to save lives, then we’re not doing our jobs.”

Carlos Braceras, Executive Director of Utah Department of Transportation

“The FCC is prepared to trade safer roads for more connectivity by giving away much of the 5.9GHz safety spectrum, and it proposes to make such an inexplicable decision in the absence of data. The Commission is prepared to put not just drivers but pedestrians and other vulnerable users, particularly first responders and those in work zones, at grave risk, and for what?”

Shailen Bhatt, President and CEO of ITS America

Let’s take a quick step back. What is actually is the DSRC spectrum? The DSRC spectrum addresses transportation safety via on-board and roadside wireless safety systems allowing vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communications. Essentially, it wants cars to talk to other cars and to traffic lights. However, the FCC has its sights set on a much larger goal: vehicle-to-everything communications (V2X).

Specifically, the plan proposes going beyond the practice of using short-wave technology, such as radios, in favor of prioritizing V2X using cellular technology (C-V2X), which is incompatible with DSRC.

“If it were a medicine, V2X might be considered a miracle drug capable of slowing down a public-health epidemic of U.S. traffic fatalities that last year numbered more than 36,000.”

Jeff Plungis, ConsumerReports.org

So you might assume that C-V2X tech would be getting a shot in the arm in the form of a 45MHz dedication. However, you’d be wrong. Chairman Pai’s remarks in November announced that the lower 45MHz are for unlicensed use. In particular, this would work toward addressing the ever-increasing demand for WiFi bandwidth. It was also proposed that the remaining 30MHz of the spectrum be dedicated to Intelligent Transportation Systems (ITS), with 20MHz to C-V2X and the remaining 10MHz potentially left to DSRC. Faster internet and lower chances of being hit by a car while crossing the road? It seems like finally being able to have our cake and eat it, too.

“So moving forward, let’s resist the notion that we have to choose between automotive safety and Wi-Fi. My proposal would do far more for both automotive safety and Wi-Fi than the status quo.”

Ajit Pai, FCC Chairman

But, of course, there are some drawbacks. Critics have pointed to a number of issues that they claim will come from splitting the safety band. For one, what about DSCR? Cities and municipalities may be sent back to square one in terms of smart transportation infrastructure developments and advancements is they focused their efforts on DSRC systems. Additionally, some auto-manufacturers may prefer C-V2X, but a number have already been installing DSCR systems, a potentially unworkable endeavor should this plan be put into action. The proposed plan doesn’t go as far as to kill DSCR, but some argue that it may as well.

The FCC’s concerns and proposed answers are admirable, but I can’t help but wonder how much of it is simply shiny paint covering tired wallpaper. For one, is the FCC’s true motivation actually addressing the lack of movement within the safety band for V2V, V2I, and V2X? Or, is it convenient? Chairman Pai indicated that this proposal came into being when the FCC was looking for contiguous swathes of the spectrum that it could open up for different types of unlicensed operations. While there is no doubt that jump starting transportation-related communications is important, the FCC’s dedication to transportation safety comes across as secondary.

I clearly don’t have answers, but these questions and others will hopefully be addressed as the FCC concludes the notice and comment period for the proposal and the next steps are taken.

As audiences worldwide await the release of Star Wars: The Rise of Skywalker, a few recent developments in transportation technology are taking cues (directly or indirectly) from the technology of a galaxy far, far away.

Last week, the opening ceremony of a new ride at Star Wars: Galaxy’s Edge, the Star Wars themed land at Walt Disney World, included actual flying X-Wing starfighters, built from Boeing-made drones. There are two important things to take from this development: (1) Boeing is apparently now a supplier for General Leia Organa’s Resistance, and; (2) Boeing is confident enough in their “Cargo Air Vehicle” drone to allow a highly-publicized public display. The all-electric Cargo Air Vehicle flew for the first time earlier this year, and is designed to carry up to 500 lbs. of cargo at a time. I’ve written about aerial delivery drones before, in October and September, but this new Boeing vehicle has a much higher carrying capacity than the smaller drones those articles focused on. Of course, a highly controlled environment like a major theme park is perhaps not as challenging an environment as the vehicles would face elsewhere, the visibility of this deployment raises interesting questions about Boeing’s future plans for the testing and deployment of the vehicles.

Another emerging technology that is attempting to recreate the Star Wars universe here on Earth is flying taxis. A number of prototype flying taxis have been revealed over the past few years, though none have the smooth lines of those seen in Star Wars, or the retro-styling of another sci-fi mainstay, the Jetson’s car. In June, Uber showed off the design of their proposed air taxi, an electric vehicle they will be testing in LA and Dallas in 2020. Industry boosters see a future with many such vehicles crisscrossing major metro areas (hmmm…where have I seen that before…). However, there are a number of challenges:

  • How do you make them cost-effective? Aircraft are expensive, and the proposed air taxis are no different. So how do you make them efficient enough to justify their cost? Will making them electric do the trick, or will the cost of batteries and other equipment sink the concept?
  • What is the economy of scale for this type of transportation? Right now, Uber offers helicopter flights from Manhattan to JFK Airport for $200-225 a person. If an air taxi ride has similar costs, how many people will really take advantage of them?
  • What infrastructure will they need? Where are they going to land? Uber has mocked-up glossy “skyport” designs, which they say will combine street-level mobility with their aerial offerings, but how many of these will be necessary if more than one company operates in a given metro area? Will skyports proliferate? In some cities, like London, there is already a scramble for roof space to transform into landing pads for air taxis and drones.
  • How do we regulate these vehicles? Between the aerial taxis and delivery drones, the skies would seem to be primed for traffic jams. Does the FAA retain full control over everything flying, or will states and even municipalities have to step in to help regulate a proliferation of flying vehicles?

Just like connected and automate vehicles, air taxes mix promising new technology with a sci-fi edge. It remains to be seen if air taxis will actually prove cost-effective enough to function for anyone other than the wealthy, but if Disney World’s use of drone X-Wings is any indication, a new hope for aerial vehicles may be just around the corner.

P.S. – Those who are skeptical of self-driving vehicles may have found a new patron saint in The Mandalorian, who turns down a droid-piloted speeder in favor of one driven by a person (also, apparently Uber service in the Outer Rim involves flutes?). To be fair, Mando later has some issues with his adorable companion playing with the controls of his ship, proving that humanoid controlled vehicles are still prone to problems (Han could have told him that).

Last time I wrote about platooning, and the potential economic savings that could benefit the commercial trucking sector if heavy duty trucks were to implement the technology. This week, I’m writing about one of the current barriers to implementing platooning both as a commercial method, and in the larger scheme of highway driving.

One of the most readily identifiable barriers to the widespread implementation of truck platooning is the ‘Following Too Close’ (“FTC”) laws enforced by almost every state. There is currently a patchwork of state legislation which prevents vehicles from following too closely behind another vehicle. Violating these laws is negligence per se.

For those who don’t quite remember 1L torts, negligence per se essentially means “if you violate this statute, that proves an element of negligence.” Therefore, if one vehicle is following too closely behind another vehicle in violation of an FTC statute, that satisfies the breach element of negligence and is likely enough to be fined for negligent driving.

These laws are typically meant to prevent vehicles from following dangerously close or tailgating other vehicles. The state laws that regulate this conduct can be divided into roughly four categories. Some states prescribe the distance or time a driver must remain behind the vehicle in front of them; others impose a more subjective standard. The subjective standards are far more common than the objective standards.

Subjective Categories

  • Reasonable and Prudent” requires enough space between vehicles for a safe stop in case of an emergency. This FTC rule is the most common for cars and seems to be a mere codification of common-law rules of ordinary care.
  • “Sufficient space to enter and occupy without danger” requires trucks and vehicles with trailers to leave enough space that another vehicle may “enter and occupy such space without danger.” This is the most common rule for trucks.

Objective Categories

  • Distance-Based: Some states prescribe the distance at which a vehicle may follow another vehicle; others identify a proportionate interval based on distance and speed. These are the most common rules for heavy trucks and frequently set the minimum distance between 300 and 500 feet.
  • Time: Timing is the least common FTC, but the two jurisdictions that impose this rule require drivers to travel “at least two seconds behind the vehicle being followed.”

It is easy to see how, given the close distance at which vehicles need to follow to benefit from platooning, any of these laws would on their face prohibit platooning within their borders. However, several states have already enacted legislation which exempts the trailing truck in a platoon from their “Following Too Close” laws. As of April 2019, 15 states had enacted legislation to that effect. Additional states have passed legislation to allow platoon testing or pilot programs within their states.

However, despite some states enacting this legislation, a non-uniform regulatory scheme does not provide  the level of certainty that will incentivize investment in platooning technology. Uncertain state regulation can disincentivize interstate carriers from investing in platooning, and could lead to a system where platooning trucks only operate within single state boundaries.

Although the exemptions are a step in the right direction, non-uniformity will likely result in an overall lower platooning usage rate, limiting the wide-spread fuel efficiency and safety benefits that are derived when platooning is implemented on a large, interstate scale. Without uniform legislation that allows platooning to be operated consistently across all the states, the need for different systems will hinder the technology’s development, and the rate at which trucking companies begin to adopt it.

However, even if not all states pass legislation exempting platooning vehicles from their FTC laws, there could be a way around the subjective elements. The most common subjective law, “Reasonable and Prudent” requires only enough space that the vehicles can safely stop in case of an emergency. When considering a human driver this distance is likely dozens of feet, given the speed at which cars travel on the interstate. However, recall from last week that platooning vehicles are synchronized in their acceleration, deceleration, and braking.

If the vehicles travel in tandem, and brake at the same time and speed, any distance of greater than several feet would be considered “reasonable and prudent.” Perhaps what needs to be developed is a “reasonable platooning vehicle” standard, rather than a “reasonable driver” standard, when it comes to autonomous vehicle technology. Then again, considering the ever-looming potential for technological failure, it could be argued that following that close behind another heavy vehicle is never reasonable and prudent, once again requiring an exemption rather than an interpretive legal argument for a new “reasonableness” standard.

Either way, to ensure certainty for businesses, more states should exempt platooning vehicles from their “Following Too Close” laws. Otherwise, the technology may never achieve a scale that makes it worth the early investment.

2018 was the year of the electric scooter. They appeared unexpectedly, lined up on sidewalks, often without enough time for city regulators and officials to prepare for their arrival. Their spontaneous presence and practically unregulated use provoked outrage from consumers, city councils, and sidewalk users everywhere.

If 2018 was the year of the electric scooter, 2020 might be the year of the electric moped. Revel, the New York-based electric moped start-up, has placed more than 1,400 mopeds across Washington, D.C., and Brooklyn and Queens, New York, with plans to expand to 10 cities by mid-2020.

Revel’s mopeds operate in much the same manner as the many electric scooters offered by companies like Spin, Lime, and Bird. Riders sign up, pay for, and lock/unlock the vehicles through an app. But where scooters are suitable for last-mile travel, mopeds may fill a medium-trip sized gap in micro-mobility. Mopeds are better for longer trips where being able to sit down and travel at faster speeds is desirable. They are a good compliment, not a rival, to other micro mobility services. The more mobility services available to the public, the more comfortable people will be using them. Overcoming the threshold is important to increasing the use of alternative transportation services.

However, in stark contrast to the drop and run business method initially employed by many electric scooter companies, Revel differentiates itself by emphasizing safety and garnering regulatory approval before deploying. When Washington D.C. announced in August that the city was launching a demonstration pilot for “motor-driven cycles” (“mopeds”), Revel CEO Frank Reig expressed immediate interest in participation:

“We share their goals of providing new, reliable transportation options that work seamlessly in the city’s current regulatory, transportation, and parking systems and help the District meet its aggressive carbon emissions goals.”

Revel’s policy is not just to work with regulators when required; they seek to foster a cooperative environment that sets the company up for long term success and partnership with the cities where the mopeds eventually deploy. Whereas many cities have banned scooters, temporarily or permanently, working upfront with city officials may benefit Revel in the long-term — potentially protecting them from being required to pull their vehicles from city streets.

The cooperative method should provide an example of conduct to other micro-mobility companies seeking to expand their operations; sometimes, it is better to ask permission rather than forgiveness. The goodwill from the city may pay off in the long run if local governments decide to limit how many companies may operate in the city. They also avoid the potential regulatory gap that electric scooter fall into; mopeds are definitely a motor vehicle, CEO Reig has made sure to emphasize:

These mopeds are motor vehicles. This means there is no regulatory gray area: you have to have a license plate. To get that license plate, you have to register each vehicle with the Department of Motor Vehicles in each state and show third-party auto liability insurance. And then because it’s a motor vehicle, it’s clear that it rides in the street, so we’re completely off sidewalks.

Another area of differentiation is safety and employment. Revel’s mopeds are limited to riders aged 21 and older, capped at speeds of 30 miles-per-hour, provide riders with two helmets, and require riders to submit their driver’s license for a safe history driving check. Moreover, unlike electric scooter companies that rely on people working in the so-called “gig-economy” to charge their scooters, Revel relies on full-time employees to swap out batteries on the vehicles. This employment structure is another selling point for cities: full-time jobs and payroll taxes. The company is making an investment that other mobility companies that operate on an independent contractor model do not make. The relationship provides benefits for the cities and Revel, according to CEO Reig:

Our biggest lesson from New York and Washington is that Revel works for cities as they exist today. They work for our riders. They work for our regulators who are seeking ways to enhance their transportation networks, not disrupt them.

After receiving nearly $27 million in Series A funding, including an investment by Toyota AI Ventures, Revel could potentially increase its vehicle fleet 10-fold, aiding them in meeting their ambitious expansion plans by the middle of next year.

Earlier this week, Raphaël wrote about the role for no-fault insurance in an age of automated vehicles. The post raised several important questions about the future of the auto insurance industry as technology advances:

Who do we want to protect? Passengers, for sure. But drivers? There is no driver! Or rather, there are many drivers. To some extent, at least under a layman’s understanding of the term “driver,” all the actors along the supply chain are driving the AV. Or, to be more precise, it is difficult to pinpoint a single driver: the “operator”? The software designer? And that is already assuming that there is a single entity who designed the software or operates what may be a fleet of AVs. And there may be others, as the AV industry continues to evolve

While Raphaël’s questions will be extremely important for the industry going forward, I want to pose a slightly different question here: Should drivers of Level 4 or Level 5 automated vehicles be required to purchase insurance at all?

Today, every US state except New Hampshire and Virginia require vehicle owners to purchase auto insurance. In a world where human drivers are in control of the vehicle, this makes sense. While flawed product designs or other manufacturer errors may contribute to car accidents today, many if not most accidents also involve some element of operator error.

In a world of fully autonomous vehicles however, this will no longer be the case. The human sitting in what is today the driver’s seat will not be in control of the vehicle in any meaningful way. Every movement such a vehicle makes will have been designed and programmed by the manufacturer or some company along its supply chain.

Given the extent of manufacturer control, would it be reasonable to have accident payouts determined by the law of products liability? Or perhaps, as Michigan Law professor Kyle Logue argued in a recent article, liability should be apportioned through a scheme of strict enterprise liability, in which automakers would be “unconditionally responsible for the economic losses resulting from any crashes of their vehicles.”

Even with the heightened manufacturer liability that may accompany highly autonomous vehicles, some room may be left for owner error, and thus for traditional insurance. Owners may be held responsible for routine maintenance of their vehicles, for ensuring software is upgraded in a timely fashion, or for actions taken if the vehicle is ever taken out of autonomous mode. But even if some minimal level of owner responsibility leads lawmakers to reject Professor Logue’s theory of enterprise liability in favor of maintenance of insurance requirements for owner/operators, insurance’s role will surely be different than it is today.

Which brings me back to a version of Raphaël’s questions that I started with. Who is the true operator of an AV, and what are they responsible for? Answering these background questions will go a long way towards determining the future of auto insurance in the era of automated vehicles.

I recently wrote about a renewed federal push to regulate automated vehicles. I’ve previously highlighted a range of state regulatory schemes, including California’s relatively strict set of regulations. Meanwhile, the advent of truly automated vehicles, which seemed imminent when Waymo announced its driverless shuttle service in Phoenix, now may be farther away than we expected. Waymo’s shuttle’s still have human safety drivers, and the technology has not advanced as quickly as expected to handle all the vagaries of the road.

But as Congress and the states struggle to get a regulatory handle on this new technology, a recent Tesla update raises an important question. Is the regulatory state agile enough to adapt when the automated vehicle market evolves in unexpected ways?

Last week, Tesla unveiled “Smart Summon,” a feature in some vehicles that allows the user to summon the car to their location. With a range of 200 feet, Smart Summon is primarily designed for use in parking lots. At least one video shows its successful use in a Costco parking lot, avoiding pedestrians and other vehicles to meet its owner at the storefront. However, the feature is not limited to use in parking lots, and videos have emerged of users trying out Smart Summon on public roads, and even running in front of their vehicle to try and make the car chase them. Despite the potential dangers this technology presents, no one has yet been injured or hit by a driverless Tesla being summoned.

Despite the seriousness with which California takes automated vehicle regulation, state authorities have determined that Teslas equipped with Smart Summon are not autonomous, and thus do not need to meet California’s AV standards. Based on regulatory definitions, this is probably the correct. A state DMV spokesperson said the state defines AVs as vehicles able to drive without active physical control or monitoring by a human. Smart Summon requires a user to be attentive to their smartphone. Furthermore, its inability to operate more than 200 feet from a human controller means that it would not satisfy SAE autonomous driving level four or five.

Despite not being a true AV though, it’s clear that Smart Summon presents many of the same dangers as one. It operates in unpredictable parking lots, filled with pedestrians and vehicles and shopping carts all moving around each other in unpredictable ways. It is the sort of environment that can get dicey for a human driver, with our experience and understanding of the subtle signals humans give off to make an otherwise unexpected move a little bit more predictable. And despite a small-print company warning that Smart Summon requires “active driver supervision,” the amount of supervision anyone can truly give a moving vehicle from 200 feet away is certainly questionable.

And yet, these vehicle are not AVs. Instead, they seem to fall within an increasingly muddled gray area of transportation that is something short of fully automated, but requires much less than full and active driver attention. In California’s current regulatory environment, this technology fits neatly into a gap.

A year ago, many people assumed we were rapidly approaching the rise of Level 4 automated vehicles that could operate smoothly on city streets. Regulations developed at the time are written with that sort of technology in mind. Even one year out, legislators were not thinking of how to assure the safety of something like Smart Summon.

So how should something like Smart Summon be regulated? What will autonomous—or semi-autonomous—technology look like a year from now, and how can government agencies prepare for it? Given the unpredictable nature of an early stage technology, regulators will continue struggling to answer these questions.

The European Union recently adopted new rules to help consumers repair household appliances like refrigerators and televisions. The rules require manufacturers to provide spare parts for years after sale – the number of years depending on the device. The “Ecodesign Directive” is intended to help protect the environment by extending the life of consumer appliances. The regulation also applies to servers, requiring firmware updates for 7 years post-production. These regulations are part of a larger battle over consumers’ right to repair their belongings, including vehicles. Vehicles are already part of the right to repair discussion, and the deployment of technically complicated CAVs will ramp up that conversation, as some manufacturers seek to limit the ability of individuals to repair their vehicles.

One current battle over the right to repair is taking place in California. In September of last year, the California Farm Bureau, the agricultural lobbying group that represents farmers, gave up the right to purchase repair parts for farm equipment without going through a dealer. Rather than allowing farmers to buy parts from whomever they’d like, California farmers have to turn to equipment dealers, who previously were unwilling to even allow farmer’s access to repair manuals for vehicles they already owned. A big part of the dispute stems from companies like John Deere placing digital locks on their equipment that prevent “unauthorized” repairs – i.e. repairs done by anyone other than a John Deere employee. The company even made farmers sign license agreements forbidding nearly all repairs or modifications, and shielding John Deere from liability for any losses farmers may suffer from software failures. Some farmers resorted to using Ukrainian sourced firmware to update their vehicle’s software, rather than pay to hire a John Deere technician. The California case is especially ironic, as the state has solid right to repair laws for other consumer goods, requiring companies to offer repairs for electronics for 7 years after production (though companies like Apple have been fighting against the state passing even more open right to repair laws).

In 2018, supporters of the right to repair were boosted by a copyright decision from the Librarian of Congress, which granted an exception to existing copyright law to allow owners and repair professionals to hack into a device to repair it. The exception is limited, however, and doesn’t include things like video game consoles, though its’ language did include “motorized land vehicles.”

So how could battles over the right to repair influence the deployment of CAVs? First off, given the amount of complicated equipment and software that goes into CAVs, regulations like those recently adopted in the EU could help extend the lifespan of a vehicle. Cars last a long time, with the average American vehicle being 11.8 years old. Right to repair laws could require manufactures to supply the parts and software updates needed to keep CAVs on the road. New legislation could protect consumer access to the data within their vehicle, so they don’t have to rely on proprietary manufacturer systems to know what’s going on inside their vehicle. A 2011 study of auto repair shops showed a 24% savings for consumers who used a third-party repair shop over a dealership, so independent access to data and spare parts is vital to keeping consumer maintenance costs down. People are very used to taking their cars to independent repair shops or even fixing them at home, and many consumers are likely to want to keep their ability to do so as CAVs spread into service.

P.S. – Two updates to my drone post from last week:

Update 1 – University of Michigan (Go Blue!) researchers have demonstrated a drone that can be used to place shingles on a roof, using an interesting system of static cameras surrounding the work-site, rather than on-board cameras, though it remains to be seen how many people want a nail gun equipped drone flying over their head…

Update 2 – UPS has been granted approval to fly an unlimited number of delivery drones beyond line-of-sight, though they still can’t fly over urban areas. They have been testing the drones by delivery medical supplies on a North Carolina hospital campus.

A write-up of the afternoon sessions is now available here!

March 15, 2019 – 10:00 AM – 5:30 PM

Room 1225, Jeffries Hall, University of Michigan Law School 

In the case of automated driving, how and to whom should the rules of the road apply? This deep-dive conference brings together experts from government, industry, civil society, and academia to answer these questions through focused and robust discussion.

To ensure that discussions are accessible to all participants, the day will begin with an introduction to the legal and technical aspects of automated driving. It will then continue with a more general discussion of what it means to follow the law. After a lunch keynote by Rep. Debbie Dingell, expert panels will consider how traffic law should apply to automated driving and the legal person (if any) who should be responsible for traffic law violations. The day will conclude with audience discussion and a reception for all attendees.

(Re)Writing the Rules of the Road is presented by the University of Michigan Law School’s Law and Mobility Program, and co-sponsored by the University of South Carolina School of Law.

Schedule of Events

Morning Sessions 

  • 10:00 am – 10:45 am

Connected and Automated Vehicles – A Technical and Legal Primer

Prof. Bryant Walker Smith

Professor Bryant Walker Smith will provide a technical and legal introduction to automated driving and connected driving with an emphasis on the key concepts, terms, and laws that will be foundational to the afternoon sessions. This session is intended for all participants, including those with complementary expertise and those who are new to automated driving. Questions are welcome. 

  • 10:45 am – 11:15 am
Drivers Licenses for Robots? State DMV Approaches to CAV Regulation

Bernard Soriano, Deputy Director for the Califorina DMV and James Fackler, Assistant Administrator for the Customer Services Administration in the Michigan Secretary of State’s Office, discuss their respective state’s approaches to regulating connected and autonomous vehicles.

  • 11:15 am – 12:00 pm
Just What Is the Law? How Does Legal Theory Apply to Automated Vehicles and Other Autonomous Technologies?

Prof. Scott Hershovitz    

Human drivers regularly violate the rules of the road. What does this say about the meaning of law? Professor Scott Hershovitz introduces legal theory and relates it to automated driving and autonomy more generally.                  

Keynote & Lunch

  • 12:00 pm – 12:30 pm
Lunch

Free for all registered attendees!

  • 12:30 pm-1:30 pm

Keynote – Rep. Debbie Dingell

Rep. Dingell shares her insights from both national and local perspectives.  

Afternoon Sessions

(Chatham House Rule)

  • 1:30 pm – 3:00 pm
Crossing the Double Yellow Line: Should Automated Vehicles Always Follow the Rules of the Road as Written?

Should automated vehicles be designed to strictly follow the rules of the road? How should these vehicles reconcile conflicts between those rules? Are there meaningful differences among exceeding the posted speed limit to keep up with the flow of traffic, crossing a double yellow line to give more room to a bicyclist, and driving through a stop sign at the direction of a police officer? If flexibility and discretion are appropriate, how can they be achieved in law?

A panel of experts will each briefly present their views on these questions, followed by open discussion with other speakers and questions from the audience.

Featured Speakers:

Justice David F. Viviano, Michigan Supreme Court

Emily Frascaroli, Counsel, Ford Motor Company

Jessica Uguccioni, Lead Lawyer, Automated Vehicles Review, Law Commission of England and Wales

  • 3:15 pm – 4:45 pm
Who Gets the Ticket? Who or What is the Legal Driver, and How Should Law Be Enforced Against Them?

Who or what should decide whether an automated vehicle should violate a traffic law? And who or what should be responsible for that violation? Are there meaningful differences among laws about driving behavior, laws about vehicle maintenance, and laws and post-crash responsibilities? How should these laws be enforced? What are the respective roles for local, state, and national authorities?

A panel of experts will each briefly present their views on these questions, followed by open discussion with other speakers and questions from the audience.

Featured Speakers:

Thomas J. Buiteweg, Partner, Hudson Cook, LLP

Kelsey Brunette Fiedler, Ideation Analyst in Mobility Domain

Karlyn D. Stanley, Senior Policy Analyst, RAND Corporation

Daniel Hinkle, State Affairs Counsel, American Association for Justice

  • 4:45 pm – 5:30 pm 
 Summary and General Discussion                                     

Participants and attendees close out the day by taking part in wide discussion of all of the day’s panels.

This is the much-delayed second part in a series of posts I started earlier this year. In that first post I discussed how companies are experimenting with small delivery robots that crawl along sidewalks to deliver goods right to your door. However, the sidewalk is not the only place where delivery drones may soon be found, as many companies are interested in using aerial drones to bring their products right to consumers.

In April, Wing, a division of Google parent company Alphabet, was given approval to start delivering goods via drone in Canberra, Australia. At launch, the drones were delivering food, medicine, and other products from 12 local businesses. This formal launch came after a trial period that ran for 18 months and 3,000 deliveries. Also in April, Wing received an FAA certification typically used for small airlines, as they begin to plan U.S. based tests, again with the intent to partner with local businesses. Not to be left behind, in June Amazon revealed it’s own delivery drone, which is indented to bring good directly from their warehouses to nearby customers within 30 minutes. Also in June, Uber announced a plan to partner with McDonalds to test delivery drones in San Diego. In Ohio, a partnership between the Air Force and the state government will allow drones to test outside of line-of-sight (a range that most civilian drones are currently limited to by the FAA). One company that intends to take part in the Ohio testing is VyrtX, which is looking to use drones to deliver human organs for transplant. 

But just what would wider use of such delivery drones mean for society? What would it mean to live in a world with robots buzzing around above our heads? In the Australian tests there were complaints about noise, with some residents claiming the sound of the machines caused them significant distress. In January of this year an unidentified drone shut down London’s Heathrow Airport, showing what can happen when drones wander into places they’re not welcome. In February of this year NASA announced two tests of “urban drone traffic management,” one in Texas, and the other in Nevada. Such a system would no doubt be necessary before widespread deployment of any of the systems so far proposed – to prevent incidents like the one in London.   

There is also a major privacy concern with drones collecting data as they fly above homes and businesses. This concern extends beyond just what privately owned drones may find, but also what law enforcement could collect. In Florida v. Riley, a 1988 case, the Supreme Court found that there is not reasonable expectation of privacy from aircraft (in that case, a police helicopter) flying in navigable airspace above a person’s home, when the air craft is flying within FAA regulations. So drones would provide a useful tool for investigations, and one that is limited only by FAA rules.

There are a lot of unanswered questions about delivery drones – and given the highly-regulated nature of all forms of air travel, the federal government, via the FAA, currently has a lot of power over just what can go on in U.S. airspace. What remains to be seen is if this regulatory structure will stifle drone development or instead insure that any market for delivery drones is developed deliberately, rather than ad hoc, with an emphasis on safety.

P.S. – A brief follow-up to my last article – Ford recently partnered with Agility Robotics on a new form of last mile delivery bot, a bipedal unit designed to carry up to 40 pounds. Could it become the C-3PO to the R2-D2-like bots already in testing?

Anyone currently living in a large city or an American college town has had some experiences with scooters – would that be the mere annoyance of having them zip around on sidewalks. Or, as a friend of mine did, attempt to use one without checking first where the throttle is…

Montréal, the economic and cultural capital of Québec province in Canada, has recently given temporary “test” licenses to micromobility scooters and bikes operators Bird, Lime and Jump, the latter two being owned by Google and Uber, respectively. 

Operations started late spring, among some skepticism from Montrealers. Not only in face of the strict regulations imposed by the city’s bylaw, but also the steep price of the services. As one article from the leading French language daily La Presse compares, a ride that takes slightly more than 20 minutes by foot would cost more than 4 Canadian dollars (about $3) with either Lime (scooters) or Jump (bikes), for a total ride time of 12 minutes. The subway and the existing dock-based bike-share service (BIXI) are cheaper, if not both cheaper and quicker. 

While Montréal’s young and active population segment can be understood as the perfect customer base for micromobility, its local government, like many others across the world who face a similar scooter invasion, really mean it with tough regulation. Closer to home, Ann Arbor banned Bird, Lyft and Lime earlier this spring for failure to cooperate; Nashville mayor attempted a blanket ban; Boulder is considering lifting its ban; several Californian cities are enforcing a strict geofencing policy; further away from the US, Amsterdam is also going to put cameras in place in order to better enforce its bikes-first regulation after having already handed out 3500 (!) individual fines over the course of a few months. As NPR reports, the trend is toward further tightening of scooter regulations across the board.

So is Montréal’s story any different? Not really. It faces the same chaotic parking situation as everywhere else, with misplaced scooters, found outside of their geofence or simply where they should not be. In its bylaw providing for the current test licenses, the city council came up with a new acronym: the unpronounceable VNILSSA, or DSUV in English. The English version stands for “dockless self-serve unimmatriculated vehicles”. The bylaw sets a high standard for operators: they are responsible for the proper parking of their scooters at all times. Not only can scooters only be parked in designated (and physically marked) parking areas, but the operator has two hours to deal with a misplaced scooter after receiving a complaint from the municipal government, with up to ten hours when such a complaint is made by a customer outside of business hours. In addition, customers must be 18 to ride and must wear a helmet. 

Tough regulations are nice, but are they even enforced? The wear-a-helmet part of the bylaw is the police’s task to enforce and there has not been much going on that front so far. As for the other parts, the city had been playing it cool, so far, giving a chance to the operators to adjust themselves. But that did not suffice: the mayor’s team recently announced the start of fining season, targeting both customers who misplace their scooter or bike if caught red-handed and the operators in other situations. The mayor’s thinly veiled expression of dissatisfaction earlier prompted Lime to send an email to all its customers, asking them in turn to email the mayor’s office with a pre-formatted letter praising the micromobility service. The test run was meant to last until mid-November, but it looks like may end early… The mobility director of the mayor’s team pledged that most of the data regarding complaints and their handling – data which operators must keep – would be published on the city’s open data portal at the end of the test run. 

If Chris Schafer, an executive at Lime Canada, believes that customers still need to be “educated” to innovative micro-mobility, Montréal’s story may prove once more that micromobility operators also need to be educated, when it comes to respecting the rules and consumers’ taste for responsible corporate behavior.

Cite as: Raphael Beauregard-Lacroix, (Re)Writing the Rules of The Road: Reflections from the Journal of Law and Mobility’s 2019 Conference, 2019 J. L. & Mob. 97.

On March 15th, 2019, the Journal of Law and Mobility, part of the University of Michigan’s Law and Mobility Program, presented its inaugural conference, entitled “(Re)Writing the Rules of The Road.” The conference was focused on issues surrounding the relationship between automated vehicles (“AVs”) and the law. In the afternoon, two panels of experts from academia, government, industry, and civil society were brought together to discuss how traffic laws should apply to automated driving and the legal person (if any) who should be responsible for traffic law violations. The afternoon’s events occurred under a modified version of the Chatham House Rule, to allow the participants to speak more freely. In the interest of allowing those who did not attend to still benefit from the day’s discussion, the following document was prepared. This document is a summary of the two panels, and an effort has been made to de-identify the speaker while retaining the information conveyed. 

Panel I: Crossing the Double Yellow Line: Should Automated Vehicles Always Follow the Rules of the Road as Written?

The first panel focused on whether automated vehicles should be designed to strictly follow the rules of the road. Questions included – How should these vehicles reconcile conflicts between those rules? Are there meaningful differences between acts such as exceeding the posted speed limit to keep up with the flow of traffic, crossing a double yellow line to give more room to a bicyclist, or driving through a stop sign at the direction of a police officer? If flexibility and discretion are appropriate, how can this be reflected in law? 

Within the panel, there was an overall agreement that we need both flexibility in making the law, and flexibility in the law itself among the participants. It was agreed that rigidity, both on the side of the technology as well as on the side of norms, would not serve AVs well. The debate was focused over just how much flexibility there should be and how this flexibility can be formulated in the law.

One type of flexibility that already exists is legal standards. One participant emphasized that the law is not the monolith it may seem from the outside – following a single rule, like not crossing a double yellow line, is not the end of an individual’s interaction with the law. There are a host of different laws applying to different situations, and many of these laws are formulated as standards – for example, the standard that a person operating a vehicle drives with “due care and attention.” Such an approach to the law may change the reasoning of a judge when it would come to determining liability for an accident involving an AV. 

When we ask if AVs should always follow the law, our intuitive reaction is of course they should. Yet, some reflection may allow one to conclude that such strict programming might not be realistic. After all, human drivers routinely break the law. Moreover, most of the participants explicitly agreed that as humans, we get to choose to break the law, sometimes in a reasonable way, and we get to benefit from the discretion of law enforcement. 

That, however, does not necessarily translate to the world of AVs, where engineers make decisions about code and where enforcement can be automatized to a high degree, both ex ante and ex post. Moreover, such flexibilities in the law needs to be tailored to the specific social need; speeding is a “freedom” we enjoy with our own, personal legacy cars, and this type of law breaking does not fulfill the same social function as a driver being allowed to get on the sidewalk in order to avoid an accident. 

One participant suggested that in order to reduce frustrating interactions with AVs, and to overall foster greater safety, AVs need the flexibility not to follow the letter of the law in some situations. Looking to the specific example of the shuttles running on the University of Michigan’s North Campus – those vehicles are very strict in their compliance with the law. 1 1. Susan Carney, Mcity Driverless Shuttle launches on U-M’s North Campus, The Michigan Engineer (June 4, 2018), https://news.engin.umich.edu/2018/06/mcity-driverless-shuttle-launches-on-u-ms-north-campus/. × They travel slowly, to the extent that their behavior can annoy human drivers. When similar shuttles from the French company Navya were deployed in Las Vegas, 2 2. Paul Comfort, U.S. cities building on Las Vegas’ success with autonomous buses, Axios (Sept. 14, 2018), https://www.axios.com/us-cities-building-on-las-vegas-success-with-autonomous-buses-ce6b3d43-c5a3-4b39-a47b-2abde77eec4c.html. × there was an accident on the very first run. 3 3. Sean O’Kane, Self-driving shuttle crashed in Las Vegas because manual controls were locked away, The Verge (July 11, 2019, 5:32 PM), https://www.theverge.com/2019/7/11/20690793/self-driving-shuttle-crash-las-vegas-manual-controls-locked-away. × A car backed into the shuttle, and when a normal driver would have gotten out of the way, the shuttle did not.

One answer is that we will know it when we see it; or that solutions will emerge out of usage. However, many industry players do not favor such a risk-taking strategy. Indeed, it was argued that smaller players in the AV industry would not be able to keep up if those with deeper pockets decide to go the risky way. 

Another approach to the question is to ask what kind of goals should we be applying to AVs? A strict abidance to legal rules or mitigating harm? Maximizing safety? There are indications of some form of international consensus 4 4. UN resolution paves way for mass use of driverless cars, UN News (Oct. 10, 2018), https://news.un.org/en/story/2018/10/1022812. × (namely in the form of a UN Resolution) 5 5. UN Economic Commission for Europe, Revised draft resolution on the deployment of highly and fully automated vehicles in road traffic (July, 12, 2018), https://www.unece.org/fileadmin/DAM/trans/doc/2018/wp1/ECE-TRANS-WP.1-2018-4-Rev_2e.pdf × that the goal should not be strict abidance to the law, and that other road users may commit errors, which would then put the AV into a situation of deciding between strict legality and safety or harm. 

In Singapore, the government recently published “Technical Reference 68,” 6 6. Joint Media Release, Land Transport Authority, Enterprise Singapore, Standards Development Organization, & Singapore Standards Council, Singapore Develops Provisional National Standards to Guide Development of Fully Autonomous Vehicles (Jan. 31, 2019), https://www.lta.gov.sg/apps/news/page.aspx?c=2&id=8ea02b69-4505-45ff-8dca-7b094a7954f9. × which sets up a hierarchy of rules, such as safety, traffic flow, and with the general principle of minimizing rule breaking. This example shows that principles can act as a sense-check. That being said, the technical question of how to “code” the flexibility of a standard into AV software was not entirely answered. 

Some participants also reminded the audience that human drivers do not have to “declare their intentions” before breaking the law, while AV software developers would have to. Should they be punished for that in advance? Moreover, non-compliance with the law – such as municipal ordinances on parking – is the daily routine for certain business models such as those who rely on delivery. Yet, there is no widespread condemnation of that, and most of us enjoy having consumer goods delivered at home.

More generally, as one participant asked, if a person can reasonably decide to break the law as a driver, does that mean the developer or programmer of AV software can decide to break the law in a similar way and face liability later? Perhaps the answer is to turn the question around – change the law to better reflect the driving environment so AVs don’t have to be programmed to break it. 

Beyond flexibility, participants discussed how having multiple motor vehicle codes – in effect one per US State – makes toeing the line of the law difficult. One participant highlighted that having the software of an AV validated by one state is big enough a hurdle, and that more than a handful of such validations processes would be completely unreasonable for an AV developer. Having a single standard was identified as a positive step, while some conceded that states also serve the useful purpose of “incubating” various legal formulations and strategies, allowing in due time the federal government to “pick” the best one. 

Panel II: Who Gets the Ticket? Who or What is the Legal Driver, and How Should Law Be Enforced Against Them?

The second panel looked at who or what should decide whether an automated vehicle should violate a traffic law, and who or what should be responsible for that violation. Further questions included – Are there meaningful differences among laws about driving behavior, laws about vehicle maintenance, and laws and post-crash responsibilities? How should these laws be enforced? What are the respective roles for local, state, and national authorities?

The participants discussed several initiatives, both public and private, that aimed at defining, or helping define the notion of driver in the context of AVs. The Uniform Law Commission worked on the “ADP”, or “automated driving provider”, which would replace the human driver as the entity responsible in case of an accident. The latest report from the RAND Corporation highlighted that the ownership model of AVs will be different, as whole fleets will be owned and maintained by OEMs (“original equipment manufacturers”) or other types of businesses and that most likely these fleet operators would be the drivers. 7 7. James M. Anderson, et. al., Rethinking Insurance and Liability in the Transformative Age of Autonomous Vehicles (2018), https://www.rand.org/content/dam/rand/pubs/conf_proceedings/CF300/CF383/RAND_CF383.pdf. ×

Insurance was also identified as a matter to take into consideration in the shaping up of the notion of AV driver. As of the date of the conference, AVs are only insured outside of state-sponsored guarantee funds, which aim to cover policy holders in case of bankruptcy of the insurer. Such “non-admitted” insurance means that most insurers will simply refuse to insure AVs. Who gets to be the driver in the end may have repercussions on whether AVs become insurable or not. 

In addition, certain participants stressed the importance of having legally recognizable persons bear the responsibility – the idea that “software” may be held liable was largely rejected by the audience. There should also be only one such person, not several, if one wants to make it manageable from the perspective of the states’ motor vehicle codes. In addition, from a more purposive perspective, one would want the person liable for the “conduct” of the car to be able to effectuate required changes so to minimize the liability, through technical improvements for example. That being said, such persons will only accept to shoulder liability if costs can be reasonably estimated. It was recognized by participants that humans tend to trust other humans more than machines or software, and are more likely to “forgive” humans for their mistakes, or trust persons who, objectively speaking, should not be trusted.

Another way forward identified by participants is product liability law, whereby AVs would be understood as a consumer good like any other. The question then becomes one of apportionment of liability, which may be rather complex, as the experience of the Navya shuttle crash in Las Vegas has shown. 

Conclusion

The key takeaway from the two panels is that AV technology now stands at a crossroads, with key decisions being taken as we discuss by large industry players, national governments and industry bodies. As these decisions will have an impact down the road, all participants and panelists agreed that the “go fast and break things” approach will not lead to optimal outcomes. Specifically, one line of force that comes out from the two panels is the idea that it is humans who stand behind the technology, humans who take the key decisions, and also humans who will accept or reject commercially-deployed AVs, as passengers and road users. As humans, we live our daily lives, which for most of us include using roads under various capacities, in a densely codified environment. However, this code, unlike computer code, is in part unwritten, flexible and subject to contextualization. Moreover, we sometimes forgive each others’ mistakes. We often think of the technical challenges of AVs in terms of sensors, cameras and machine learning. Yet, the greatest technical challenge of all may be to express all the flexibility of our social and legal rules into unforgivably rigid programming language. 

By Wesley D. Hurst and Leslie J. Pujo*

Cite as: Wesley D. Hurst & Leslie Pujo, Vehicle Rental Laws: Road Blocks to Evolving Mobility Models?, 2019 J. L. & Mob. 73.

I.          Introduction

The laws and regulations governing mobility are inconsistent and antiquated and should be modernized to encourage innovation as we prepare for an autonomous car future. The National Highway Traffic Safety Administration (“NHTSA”) has concluded that Autonomous Vehicles, or Highly Automated Vehicles (“HAVs”) may “prove to be the greatest personal transportation revolution since the popularization of the personal automobile nearly a century ago.” 8 8. Federal Automated Vehicles Policy, NHTSA 5 (2016), https://www.transportation.gov/sites/dot.gov/files/docs/AV%20policy%20guidance%20PDF.pdf. × Preparation for a HAV world is underway as the mobility industry evolves and transforms itself at a remarkable pace. New mobility platforms are becoming more convenient, more automated and more data driven—all of which will facilitate the evolution to HAVs. However, that mobility revolution is hindered by an environment of older laws and regulations that are often incompatible with new models and platforms.

Although there are a number of different mobility models, this article will focus on carsharing, peer-to-peer platforms, vehicle subscription programs, and rental car businesses (yes, car rental is a mobility platform). All of these mobility models face a host of inconsistent legal, regulatory and liability issues, which create operational challenges that can stifle innovation. For example, incumbent car rental, a mobility platform that has been in place for over 100 years, is regulated by various state and local laws that address everything from driver’s license inspections to use of telematics systems. Although physical inspection of a customer’s driver’s license at the time of rental is commonplace and expected in a traditional, face-to-face transaction, complying with the driver’s license inspection for a free-floating carsharing or other remote access mobility model becomes more problematic.

Part B of this article will review current federal and state vehicle rental laws and regulations that may apply to incumbent rental car companies and other mobility models around the country, including federal laws preempting rental company vicarious liability and requiring the grounding of vehicles with open safety recalls, as well as state laws regulating GPS tracking, negligent entrustment, and toll service fees. Part C poses a series of hypotheticals to illustrate the challenges that the existing patchwork of laws creates for the mobility industry. 9 9. Note: This article focuses on existing laws applicable to short-term rentals of vehicles, rather than long-term leases (including the federal Consumer Leasing regulations, known as “Regulation M,” which are set forth in 12 C.F.R., Part 213). For a more detailed discussion of long-term vehicle leasing laws, see Thomas B. Hudson and Daniel J. Laudicina, The Consumer Leasing Act and Regulation M, in F&I Legal Desk Book (6th edition 2014). × For instance, whether a mobility operator can utilize GPS or telematics to monitor the location of a vehicle is subject to inconsistent state laws (permitted in Texas, but not California, for example). And vehicle subscription programs are currently prohibited in Indiana, but permitted in most other states. Similarly, peer-to-peer car rental programs currently are prohibited in New York, but permitted in most other states. Finally, Part D of the article will offer some suggested uniform rules for the mobility industry.

First, however, we offer the following working definitions for this article:

  • Carsharing” – a membership-based service that provides car access without ownership. Carsharing is mobility on demand, where members pay only for the time and/or distance they drive. 10 10. About the CSA, Carsharing Ass’n., https://carsharing.org/about/ (last visited May 7, 2019). ×
  • Peer-to-peer Carsharing” or “Rentals” – the sharing of privately-owned vehicles in which companies, typically for a percentage of the rental charge, broker transactions among car owners and renters by providing the organizational resources needed to make the exchange possible (i.e., online platform, customer support, driver and motor vehicle safety certification, auto insurance and technology). 11 11. Car Sharing State Laws and Legislation, Nat’l Conf. of St. Legislatures (Feb. 16, 2017), http://www.ncsl.org/research/transportation/car-sharing-state-laws-and-legislation.aspx. Since most personal auto policies do not cover commercial use of personal vehicles, if the peer-to-peer platform does not provide liability and physical damage coverage, there likely will be no coverage if the vehicle is involved in an accident during the rental period. As noted above, peer-to-peer carsharing platforms currently do not operate in New York, based, in part, on the New York Department of Insurance’s findings that a peer-to-peer platform operator’s insurance practices (including sale of group liability coverage to vehicle owners and renters) constituted unlicensed insurance producing. See RelayRides, Inc. Consent Order (N.Y. Dep’t of Fin. Serv., 2014). Although a detailed discussion of insurance-related issues is beyond the scope of this article, the Relay Rides experience in New York illustrates the need for the insurance industry and insurance laws to evolve to accommodate new mobility models. See Part B.2.d. for a discussion of legislative approaches that several states have taken to address the insurance issues implicated by the peer-to-peer model (including a 2019 New York bill). ×
  • Subscriptions” – a service that, for a recurring fee and for a limited period of time, allows a participating person exclusive use of a motor vehicle owned by an entity that controls or contracts with the subscription service. 12 12. See Ind. Code § 9-32-11-20(e) (2018). The prohibition on vehicle subscription services in Indiana originally expired on May 1, 2019, but was recently extended for another year through May 1, 2020. The Indiana definition also provides that “[Subscription] does not include leases, short term motor vehicle rentals, or services that allow short terms sharing of a motor vehicle.” A bill pending in North Carolina uses similar language to define “vehicle subscription” for purposes of determining highway use tax rates. See H.B. 537 (N.C. 2019). As further discussed in Part C below, it is not clear whether other states would take the same approach and classify a subscription model as distinct from rental or leasing instead of applying existing laws. × Typically, the subscriber is allowed to exchange the vehicle for a different type of vehicle with a certain amount of notice to the operator. This is a developing model with a number of variations, including whether the subscription includes insurance, maintenance, a mileage allowance, or other features and services.
  • Vehicle Rental” – a customer receives use of a vehicle in exchange for a fee or other consideration pursuant to a contract for a period of time less than 30 days. 13 13. See Cal. Civ. Code § 1939.01 (Deering 2019). Although for purposes of this article, we use a traditional 30-day period to define short-term rentals, we note that the time period for rentals varies by state (or even by statute for a particular state) with some defining a short-term rental for periods as long as 6 months or even one year. See, e.g., Md. Code Ann., Transportation § 18-101 (LexisNexis 2019) (defining “rent” as a period of 180 days or less). Compare 35 Ill. Comp. Stat. 155/2 (2019) (defining “rent” as a period of one year or less for purposes of the Illinois Automobile Renting Occupation and Use Tax), with 625 Ill. Comp. Stat. 27/10 (defining “rental company” as one that rents vehicles to the public for 30 days or less for purposes of the Illinois damage waiver law). ×
  • Mobility Operators” – any person or entity that provides access to a vehicle to another person whether by an in-person transaction, an app-based or online platform, or any other means and whether the entity providing the access is the owner, lessee, beneficial owner, or bailee of the vehicle or merely facilitates the transaction.

II.          Existing Laws: Lack of Uniformity and Certainty

As noted above, a patchwork of federal, state (and in some cases city or county) laws regulate short-term car rentals (in addition to generally applicable laws affecting all businesses, such as privacy and data security laws, 14 14. In addition to general privacy and data security concerns applicable to all businesses, the advent of HAVs and connected vehicles may trigger additional privacy and data security issues for mobility operators. For example, issues surrounding the control, access, and use of vehicle-generated data is still unsettled and the subject of much debate. See, e.g. Ayesha Bose, Leilani Gilpin, et al., The Vehicle Act: Safety and Security for Modern Vehicles, 53 Willamette L. Rev. 137 (2017) for additional information on this topic. × the Americans with Disabilities Act (“ADA”), employment law, and zoning laws). Car rental laws have developed over time and typically address:

  1. State and local taxes and surcharges;
  2. Licensing and operational requirements, including airport concessions and permits for picking-up and dropping-off passengers;
  3. Public policy issues, such as liability insurance and safety recalls; and
  4. Consumer protection matters, like rental agreement disclosures, restrictions on the sale of collision damage waivers, prohibitions on denying rentals based on age or credit card ownership, and restrictions on mandatory fees. 15 15. See, e.g., Final Report and Recommendations of the National Association of Attorneys General Task Force on Car Rental Industry Advertising and Practices, 56 Antitrust & Trade Regulation Report No. 1407 (March 1989) at S-3 (“NAAG Report”). The NAAG Report includes “guidelines,” which were intended for use by states in providing guidance to car rental companies on compliance with state unfair and deceptive practice laws, Id. at S-5. ×

As is often the case with regulated industries, state and local vehicle rental laws vary considerably, which can lead to uncertainty and inefficiency. For example, a multi-state operator may need to vary product offerings and pricing, customer disclosures, and agreement forms, depending upon the state in which the rental commences. 16 16. Typically, a state law will apply to a transaction if the renter accepts delivery of the vehicle in that state, regardless of where the rental company’s physical offices are located, where the vehicle is typically parked, or where the vehicle is returned. See, e.g., 24 Va. Code Ann. § 20-100-10 (2019) (“The term [rental in this State] applies regardless of where the rental agreement is written, where the rental terminates, or where the vehicle is surrendered.”). × The uncertainty and inefficiency increases dramatically when considering whether and how existing vehicle rental laws apply to new mobility platforms and services since many of the existing laws do not address or even contemplate modern technology like self-service, keyless access to vehicles, digital agreements, or telematics fleet management.

The following paragraphs provide a brief overview of some of the existing laws.

A.         Federal Law

1. Graves Amendment

The federal Graves Amendment, 17 17. 49 U.S.C.S. § 30106 (LexisNexis 2019). × passed in 2005, preempts any portion of state law that creates vicarious liability for a vehicle rental company based solely on ownership of a vehicle. Specifically:

An owner of a motor vehicle that rents or leases the vehicle to a person . . . shall not be liable . . . by reason of being the owner of the vehicle . . . for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if– (1) the owner . . . is engaged in the trade or business of renting or leasing motor vehicles; and (2) there is no negligence or criminal wrongdoing on the part of the owner . . . 18 18. Before passage of the Graves Amendment, many car leasing and renting companies ceased activities in states with unlimited vicarious liability laws based solely on ownership, such as New York. See Graham v Dunkley, 852 N.Y.S.2d 169 (App. Div. 2008); see also Susan Lorde Martin, Commerce Clause Jurisprudence and the Graves Amendment: Implications for the Vicarious Liability of Car Leasing Companies, 18 U. FLA. J.L. & Pub. Pol’y 153, 162 (2007). ×

Determining whether the Graves Amendment applies to a particular case involves an analysis of both factual and legal issues. The factual issues include a determination of whether:

(A) the claim involves a “motor vehicle”;

(B) the individual or entity is the “owner” of the motor vehicle (which may be a titleholder, lessee, or bailee) or an affiliate of the owner;

(C) the individual or entity is “engaged in the trade or business of renting or leasing motor vehicles”; and

(D) the accident occurred during the rental period. 19 19. Johnke v. Espinal-Quiroz, No. 14-CV-6992, 2016 WL 454333 (N.D. Ill. 2016). ×

    The legal issues include:

(A) whether the owner is being sued in its capacity as owner (as opposed to the employer or other principal of another party); and

(B) whether there are allegations that the owner was negligent or criminal. 20 20. Id. ×

Perhaps not surprisingly, the Graves Amendment has been highly litigated, from early challenges to its constitutionality, 21 21. See, Rosado v. Daimlerchrysler Fin. Servs. Trust, 112 So. 3d 1165 (2013); Garcia v. Vanguard Car Rental USA, Inc., 540 F.3d 1242 (2008); Rodriguez v. Testa, 993 A.2d 955 (Conn. 2009); Vargas v. Enter. Leasing Co., 60 So. 3d 1037 (Fla. 2008). × to later assertions that it does not apply to a particular case because the vehicle’s owner was not “engaged in the business of renting or leasing,” 22 22. See e.g., Minto v. Zipcar New York, Inc., No. 15401/09 (N.Y. Sup. Ct., Queens County Mar. 17, 2010); Moreau v. Josaphat, et al., 975 N.Y.S.2d 851 (N.Y. Sup. Ct. 2013). × or that an accident did not occur during the “rental period.” 23 23. Currie V. Mansoor, 71 N.Y.S.3d 633 (App. Div. 2018); Chase v. Cote, 2017 Conn. Super. LEXIS 3533 (2017); Marble v. Faelle, 89 A.3d 830 (R.I. 2014). ×

Two New York cases are instructive to operators of newer mobility models. In Minto v. Zipcar New York, Inc. 24 24. See Minto v. Zipcar New York, Inc., No. 15401/09. × and Moreau and Duverson v. Josaphat, et al., 25 25. See Moreau, 975 N.Y.S.2d 851. × a New York court examined whether carsharing company Zipcar was “engaged in the trade or business of renting or leasing motor vehicles” for purposes of the Graves Amendment – despite the fact that it touted itself as an alternative to car rental.

In the 2010 Minto case (which the Moreau case closely followed), the court stated that Zipcar’s advertising, which contrasted the company to “‘traditional car rental cars’, d[id] not foreclose the possibility that it is nevertheless also in the rental car business, although not of a traditional sort.” 26 26. See Minto v. Zipcar New York, Inc., No. 15401/09 at 2. × The court then noted that the Graves Amendment did not define “trade or business of renting or leasing motor vehicles.” 27 27. Id. × As a result, it analyzed the “constituent terms” of “renting” and “leasing” to determine whether Zipcar was a rental company for purposes of the Graves Amendment 28 28. Id. See also Moreau, 975 N.Y.S.2d at 855-856. × and concluded that the key features of a “lease” or rental” were the “transfer of the right to possession and use of goods for a term in return for consideration.” 29 29. See Minto v. Zipcar New York, Inc., No. 15401/09 at 2-3. × With these definitions in mind, the court focused on the requirement that Zipcar members pay fees in exchange for the right to use Zipcar vehicles, which it found to be “little different from ‘traditional rental car’ companies, notwithstanding Zipcar’s marketing statements that contrast it with those companies” and held that Zipcar was covered by the Graves Amendment. 30 30. Id. at 3. × As further support of its conclusion, the Minto court noted that the Zipcar marketing “shows that the company competes with traditional car-rental companies and serves a similar consumer need.” 31 31. Minto v. Zipcar New York, Inc., No. 15401/09 at 4. ×

2. Safe Rental Car Act

The Raechel and Jacqueline Houck Safe Rental Car Act of 2015 (“Safe Rental Car Act”) 32 32. Raechel and Jacqueline Houck Safe Rental Car Act of 2015, S. 1173, 114th Cong. (2015) (codified as amended in scattered sections of 49 U.S.C.). × places limits on the rental, sale, or lease of “covered rental vehicles”. 33 33. 49 U.S.C.A. § 30120(i) (2017). × A “covered rental vehicle” is one that: (A) has a gross vehicle weight rating (“GVWR”) of 10,000 pounds or less; (B) is rented without a driver for an initial term of less than 4 months; and (C) is part of a motor vehicle fleet of 35 or more motor vehicles that are used for rental purposes by a rental company. 34 34. 49 U.S.C.A. § 30102(a)(1) (2017). × A “rental company” is any individual or company that “is engaged in the business of renting covered rental vehicles,” and “uses, for rental purposes, a motor vehicle fleet of 35 or more covered rental vehicles, on average, during the calendar year.” 35 35. 49 U.S.C.A. § 30102(a)(11) (2017). ×

Under the Safe Rental Car Act, after receiving notice by electronic or first class mail of a NHTSA-approved safety related recall, a rental car company may not rent, sell, or lease an affected vehicle in its possession at the time of notification, until the defect has been remedied. The rental car company must comply with the restrictions on rental/sale/lease “as soon as practicable,” but no later than 24 hours after the receipt of the official safety recall notice (or within 48 hours if the notice covers more than 5,000 vehicles in its fleet). 36 36. 49 U.S.C.A. § 30120(i)(1) and (3) (2017). The 24-hour/48-hour time requirement applies only to vehicles in the possession of the rental company when the safety recall is received, and does not require rental companies to locate and recover vehicles that are on rent at that time. × If the safety recall notice indicates that a remedy is not immediately available, but specifies interim actions that an owner may take to alter the vehicle and eliminate the safety risk, the rental company may continue to rent (but not sell or lease) the vehicle after taking the specified actions. 37 37. 49 U.S.C.A. § 30120(i)(3)(C) (2017). Once a permanent remedy becomes available, the rental company may not rent affected vehicles until those vehicles have been repaired. ×

Despite the federal recall legislation, several states have introduced bills for similar legislation with California passing a law in 2016 that extends the restrictions on rental, sale, and lease to fleets of any size, as well as to cars loaned by dealers while a customer’s own vehicle are being repaired or serviced. 38 38. Cal. Veh. Code § 11754 (Deering 2019). × Effective January 1, 2019, the California prohibitions on the rental, lease, sale, or loan of vehicles subject to safety recalls also apply to “personal vehicle sharing programs,” which are defined as legal entities qualified to do business in the State of California that are “engaged in the business of facilitating the sharing of private passenger vehicles for noncommercial use by individuals within the state.” 39 39. Cal. Veh. Code § 11752 (West 2019); Cal Ins. Code § 11580.24(b)(2) (West 2011). ×

B.         State Law

Several states, including California, 40 40. Cal. Civ. Code §§ 1939.01 – 1939.37 (West 2017). × Hawaii, 41 41. Haw. Rev. Stat. Ann. §437D (West 2019). × Illinois, 42 42. 625 Ill. Comp. Stat. 27 (West 2019); 625 Ill. Comp. Stat. 5/6-305 (West 2019). × Nevada, 43 43. Nev. Rev. Stat. Ann. §§ 482.295–482.3159 (West 2019). × and New York, 44 44. N.Y. Gen. Bus. Law § 396-z (McKinney 2019). × have comprehensive vehicle rental laws that regulate a variety of issues, including minimum age requirements; sales of damage waivers; limitations on amounts recoverable from renters, fees that a vehicle rental company may charge; recordkeeping practices; general licensing or permit requirements; 45 45. See, e.g., Conn. Gen. Stat. Ann. § 14-15 (West 2018); D.C. Code § 50-1505.03 (2019); Del. Code Ann. Tit. 21 § 6102 (West 2019); Haw. Rev. Stat. Ann. § 251-3 (West 2019); Minn. Stat. Ann. § 168.27 (West 2019); Nev. Rev. Stat. Ann. § 482.363 (West 2019); N.J. Stat. Ann. § 45:21-12 (West 2019); Okla. Stat. tit. 47, § 8-101 (2004); 31 R.I. Gen. Laws Ann. § 31-5-33 (West 2019); W. Va. Code Ann. § 17A-6D-1 (West 2019); Wis. Stat. Ann. § 344.51(1m) (West 2018). × imposition of short-term rental taxes and surcharges; airport concession and permit requirements; limitations on the use of telematics; deposit and credit card restrictions; required display of counter signs; and required disclosures on rental agreements (including specified language, font size/style, and placement on written agreements). California even requires rental companies to warn their customers that operation of a passenger vehicle can expose individuals to certain chemicals that are known to cause cancer and birth defects, and therefore the customers should avoid breathing exhaust and take other precautions. Other states regulate one or more of these issues, with most states varying the specific requirements. For example, approximately 21 states regulate the sale of damage waivers with states taking different approaches on several key issues, including the permissibility of selling partial or deductible waivers, customer disclosures, and the permissible bases for invalidation of a waiver. 46 46. The typical damage waiver statute requires vehicle rental companies to disclose the optional nature of the waiver on the front of the rental agreement form and/or signs at the rental counter. Some statutes also regulate the content of the waiver and its exclusions. See, e.g., Cal. Civ. Code § 1939.09 (Deering 2019). Hawaii, Illinois, Maryland, New York, and Wisconsin require the distribution of brochures summarizing the damages waiver and its terms, and rental companies selling damage waivers in Louisiana and Minnesota must file a copy of the rental agreement before using it. Haw. Rev. Stat. Ann. § 437D-10 (LexisNexis 2019); 625 Ill. Comp. Stat. Ann. 27/20 (LexisNexis 2019); La. Stat. Ann. § 22:1525 (2018); Md. Code Ann. Com. Law § 14-2101 (LexisNexis 2019); Minn. Stat. Ann. § 72A.125 (West 2019); N.Y. Gen. Bus. Law § 396-z(4) (Consol. 2019); and Wis. Stat. Ann. § 344.576 (West 2018). ×

In addition to the issues noted above, most states prohibit rental of a vehicle without first inspecting the renter’s driver’s license to confirm that it is “facially valid” and (1) comparing the signature on the license with the renter’s signature written at the time of rental; and/or (2) comparing the photo with renter. 47 47. See, e.g., Fla. Stat. Ann. § 322.38(1-2) (LexisNexis 2018); 625 Ill. Comp. Stat. Ann. 5/6-305(b) (LexisNexis 2019); Nev. Rev. Stat. Ann. § 483.610 (LexisNexis 2019); Md. Code Ann. Transp. § 18-103(a), (b) (LexisNexis 2019); Wash. Rev. Code Ann. § 46.20.220 (LexisNexis 2019); W. Va. Code Ann. § 17B-4-6 (LexisNexis 2019). × Moreover, case law from various states provide guidance on what may or may not constitute negligent entrustment (which is excluded from the Graves Amendment). Finally, some states have begun to recognize the emergence of new mobility models and have either amended existing laws or passed new legislation to address the new models.

The paragraphs below summarize typical state laws (and how they vary) on several of these issues, including use of telematics systems; tolls and other fees, negligent entrustment, and peer-to-peer car sharing programs.

2. Telematics Systems and Vehicle Technology

Many mobility operators equip their rental vehicle fleet with global positioning systems (GPS) or other telematics systems (collectively “Telematics Systems”) to track vehicles for a variety of purposes, including fleet management; locating and recovering vehicles that are not returned by the due-in date (or that have been reported missing); calculating information related to the use of the vehicle, such as mileage, location, and speed; and providing services to renters, such as roadside assistance, maintenance, and navigation. Connected cars and HAVs will provide even more data that mobility operators can use to manage their fleets and enhance the user’s experience. 48 48. See, e.g., Avis Budget Group Boosts Fleet of Connected Cars with 75,000 In-Vehicle Telematics Units From I.D. Systems, Avis Budget Group (Dec. 17, 2018), https://avisbudgetgroup.com/avis-budget-group-boosts-fleet-of-connected-cars-with-75000-in-vehicle-telematics-units-from-i-d-systems-2/. (last visited May 8, 2019). ×

At the same time, mobility operators that use Telematics Systems to impose fees related to vehicle use (e.g., fees for traveling outside a geographic area or excess speeding), may face customer complaints or even litigation. For example, rental companies have been subject to suit in the past when they used GPS to collect location or speed information about a vehicle while on rent and impose additional fees on customers who violated geographic limitations of the rental agreement or state speed limits. 49 49. See Turner v. American Car Rental 884 A.2d 7 (Ct. App. Ct. 2005); Proposed Judgement, People v. Acceleron Corp., (Cal. Super. Ct. 2004), https://oag.ca.gov/system/files/attachments/press_releases/04-129_settle.pdf. ×

Four states, including California, Connecticut, Montana, and New York, currently have laws that specifically regulate “rental company” use of Telematics Systems. Specifically:

CaliforniaCalifornia generally prohibits rental companies from using, accessing, or obtaining information about a renter’s use of a rental vehicle that was obtained from “electronic surveillance technology” (“a technological method or system used to observe, monitor, or collect information, including telematics, . . . GPS, wireless technology, or location-based technology”), including for the purpose of imposing fines or surcharges.  However, electronic surveillance technology may be used if:

(1) The rented vehicle is missing or has been stolen or abandoned;

(2) the vehicle is 72 hours past the due-in date (and the company notifies the renter and includes required disclosures in the rental agreement);

(3) the vehicle is subject to an AMBER Alert; or

(4)  in response to a specific request from law enforcement pursuant to a subpoena or search warrant. 50 50. See Cal. Civ. Code § 1939.23(a) (West 2019). ×

Rental companies that use electronic surveillance technology for any of the reasons identified above also must maintain certain records of each such use for one year from date of use. 51 51. Id. The records must include any information relevant to the activation of the GPS, including: (1) the rental agreement; (2) the return date; (3) the date and time the electronic surveillance technology was activated; and (4) if relevant, a record any communication with the renter or the police. The record must be made available to the renter upon request, along with any explanatory codes necessary to read the record. × Rental companies may also use telematics at the request of renters, including for roadside service, navigation assistance, or remote locking/unlocking – as long as the rental company does not use, access or obtain information related to the renter’s use of the vehicle beyond that which is necessary to render the requested service. 52 52. See Cal. Civ. Code § 1939.23(b) (West 2019).  In addition, rental companies may obtain, access, or use information from electronic surveillance technology for the sole purpose of determining the date and time of the start and end of the rental, total mileage, and fuel level. × Like most of the other provisions of the California Vehicle Rental law, customers cannot waive these requirements. 53 53. See Cal. Civ. Code § 1939.29 (West 2019). The only provisions of the California vehicle rental law that a customer may waive are those related to business rentals, rentals of 15-passenger vans, and driver’s license inspection exceptions for remote access programs. ×

ConnecticutConnecticut’s non-uniform version of UCC Article 2A, 54 54. Conn. Gen. Stat. § 42-2A-702 (2013). × (which applies to both short-term and long-term consumer and commercial leases) regulates the use of “electronic self-help,” including the use of GPS devices to track and locate leased property to repossess the goods (or render them unusable without removal, such as remotely disabling the ignition of a vehicle). Before resorting to electronic self-help, a lessor must give notice to the lessee, stating:

      • That the lessor intends to resort to electronic self-help as a remedy on or after 15 days following notice to the lessee;
      • The nature of the claimed breach which entitled the lessor to resort to electronic self-help; and
      • The name, title, address and telephone number of a person representing the lessor with whom the lessee may communicate concerning the rental agreement.

In addition, the lessee must separately agree to a term in the lease agreement that authorizes the electronic self-help. A commercial lease requires only that the authorization is included as a separate provision in the lease, which implies that a consumer lease requires the express, affirmative consent of the lessee. 55 55. Conn. Gen. Stat. § 42-2A-702(e)(2)-(3) (2013). Lessees may recover damages, including incidental and consequential damages, for wrongful use of electronic self-help (even if the lease agreement excludes their recovery). Conn. Gen. Stat. § 42a-2A-702(e)(4). In addition, a lessor may not exercise electronic self-help if doing so would result in substantial injury or harm to the public health or safety or “grave harm” to third parties not involved in the dispute – even if the lessor otherwise complies with the statute. Conn. Gen. Stat. § 42a-2A-702(e)(5). ×

Montana Montana requires a “rental vehicle entity” providing a rental vehicle equipped with a GPS or satellite navigation system to disclose in the rental agreement (or written addendum) the presence and purpose of the system. 56 56. See Mont. Code Ann. 61-12-801(1)(a) (2019). For purposes of the Montana law, a “rental vehicle entity” is a business entity that provides the following vehicle to the public under a rental agreement for a fee: light vehicles, motor-driven cycles, quadricycles, or off-highway vehicles. Mont. Code Ann. 61-12-801(2)(b)-(c) (2019). A “rental agreement” is a written agreement for the rental of a rental vehicle for a period of 90 days or less. Mont. Code Ann. 61-12-801(2)(a) (2019). × If the GPS or satellite navigation system is used only to track lost or stolen vehicles, disclosure is not required.

New York – New York prohibits a “rental vehicle company” from using information from “any” global positioning system technology to determine or impose fees, charges, or penalties on an authorized driver’s use of the rental vehicle. 57 57. N.Y. Gen. Bus. Law 396-z(13-a). New York defines a “rental vehicle company” as “any person or organization . . . in the business of providing rental vehicles to the public from locations in [New York]. NY Gen. Bus. Law 396-z(1)(c). × The limitation on use of GPS, however, does not apply to the rental company’s right to recover a vehicle that is lost, misplaced, or stolen.

More recently, vehicle infotainment systems, which may include Telematics Systems like GPS, have come under scrutiny. In a putative class action filed against Avis Budget Group in December 2018, the plaintiff asserted that:

(a) a customer’s personal information may be collected and stored automatically by a vehicle each time the customer pairs his or her personal mobile device to the vehicle infotainment system to access navigation, music streaming, voice dialing/messaging, or other services; and

(b) failure to delete the customer data after each rental violated customers’ right to privacy under the California constitution, as well as the California rental law electronic surveillance technology provisions.

As of the date of this article, the defendant had removed the case to federal court and filed a motion to compel arbitration based on the terms and conditions of the rental agreement. 58 58. See Complaint, Kramer v. Avis Budget Group, Inc., Case No. 37-2018-00067024-CU-BT-CTL (Ca. Super. Ct., San Diego County 12/31/2018). The federal case number is 3:19cv421 (S.D. Cal.). Similar claims have been filed against other companies in California and all were initially removed to federal court, however, one of the cases has been remanded to state court. ×

2. Tolls and Other Fees

Several states, including California, Nevada, and New York, limit the types and even the amounts of fees that rental companies can charge. For example, California prohibits additional driver fees, and Nevada and New York cap those fees. In other states, a fee that appears to be excessive or punitive may be unenforceable. Generally, a fee is more likely to be enforced if it is fully disclosed, and the customer can avoid paying it by either not selecting a particular product or service (such as supplemental liability insurance or an additional driver) or not engaging in a particular behavior (such as returning the car late or with an empty gas tank). 59 59. See, e.g., Blay v. Zipcar, Inc., 716 F. Supp. 2d (D. Mass. 2010); Reed v. Zipcar, Inc., 883 F. Supp. 2d 329 (D. Mass. 2012). Cf. Bayol v. Zipcar, Inc., 78 F.Supp.3d 1252 (N.D. Cal. 2015). ×

Although disgruntled customers may complain about any fee that they believe is excessive or “hidden,” over the past several years, toll program charges have been among the most disputed in the car rental industry. Indeed, several class action claims have been filed against rental companies alleging inadequate disclosure of toll payment terms, failure to disclose use of third parties, unauthorized charges to the customer’s credit card, breach of contract, and similar claims. 60 60. See Doherty and Simonson v. Hertz, No 10-359 (NLH/KMW) 2014 WL 2916494 (D.N.J. Jun. 25, 2014) (approving over $11 million settlement of class action case based on assertions that inadequate disclosure of a rental company’s toll program violated consumer protection laws and breached the rental agreement); see also Mendez v. Avis Budget Group, Inc., No. 11-6537(JLL), 2012 WL 1224708 (D. N.J. Apr. 10, 2012); Readick v. Avis Budget Group, Inc., No. 12 Civ. 3988(PGG), 2013 WL 3388225 (S.D. N.Y. Jul. 3, 2013); Sallee v. Dollar Thrifty Automotive Group, Inc., et al., 2015 WL 1281518 (N.D. Okla. Mar. 20, 2015); Maor v. Dollar Thrifty Automotive Group, Inc., 303 F.Supp.3d 1320 (S.D. Fla. 2017). × State and local attorneys general have also investigated or filed civil claims against rental companies based on similar allegations. 61 61. See infra, note 55. ×

The increase in customer complaints and litigation likely stems from innovations in both toll collection methods and rental car toll payment processing (both of which seem likely to become an integral part of the connected car/HAV ecosystem). For example, an increasing number of toll roads and bridges are all-electronic. At the same time, many rental companies have introduced optional toll service products that permit renters to use electronic toll roads and lanes during the rental, some of which are provided by third parties. Often, a renter who declines to purchase the toll service at the time of rental will be subject to higher fees if he or she incurs toll charges by driving on an all-electronic road or lane during the rental.

The typical complaint focuses on alleged lack of or inadequate disclosure of the toll payment-processing program. For example, in recent settlement agreements with the Florida Attorney General, Avis Budget Group, Inc., and Dollar Thrifty Automotive Group, Inc. both agreed to disclose that Florida has cashless tolls, along with details about the rental company’s toll service options, and how the toll service charges can be avoided (such as by paying in cash, programming a GPS to avoid toll roads, contacting local authorities for other payment options, or using a personal transponder that is accepted on the toll road). 62 62. In February 2019, Hertz settled a case with the City Attorney of San Francisco for $3.65 million. The case alleged that the Hertz toll fee program as applied to the Golden Gate Bridge (an all-electronic toll road) failed to adequately disclose the fees or to provide customers the ability to opt-out. See Julia Cheever, Hertz Reaches $3.65 Million Settlement with SF over Golden Gate Bridge Tolls, San Francisco Examiner (Feb. 19, 2019), http://www.sfexaminer.com/hertz-reaches-3-65-m-settlement-sf-golden-gate-bridge-toll-fees/. See also Office of the Att’y Gen. of Fla.v. Dollar Thrifty Automotive Group, Inc., No. 16-2018-CV-005938 (Fla. Cir. Ct Jan. 7, 2019), https://myfloridalegal.com/webfiles.nsf/WF/TDGT-B8NT5W/$file/Final+Signed+DT AG+Settlement+Agreement+1+11+19.pdf.; In re Investigative Subpoena Duces Tecum to Avis Budget Group, Inc. and Payless Car Rental System, Inc., No 2017 CA 000122 (Fla. Cir. Ct. Jul. 7, 2017), http://myfloridalegal.com/webfiles.nsf/WF/JMAR-AP6LZQ/ $file/Settlement+Agreement+Avis.pdf. ×

Finally, state legislatures are taking notice of the tolling issues with several states proposing new legislation to regulate rental company toll programs and fees. As of January 1, 2019, Illinois became the first state to directly regulate toll programs by establishing maximum daily fees for toll programs if the rental company fails to notify the customer of the option to use a transponder or other device before or at the beginning of the rental. 63 63. See 625 Ill. Comp. Stat. 5/6-305. ×

3. Negligent Entrustment.

As noted above, the federal Graves Amendment protects “rental” or “leasing” companies from vicarious liability for their customers’ accidents based solely on ownership of the vehicle; however, the rental or leasing company is still liable for its own negligence or criminal wrongdoing. As a result, one common challenge to a rental or leasing company’s assertion of the Graves Amendment as an affirmative defense is a claim that the rental or leasing company somehow negligently entrusted the vehicle to the customer.

A vehicle owner may be liable for negligent entrustment if: (1) it provides a vehicle to a person it knows, or should know, is incompetent or unfit to drive; (2) the driver is in an accident or otherwise causes injury; and (3) that injury is caused by that person’s incompetence. 64 64. See Osborn v. Hertz Corp., 205 Cal.App.3d 703, 708-709 (1989). × To be found liable for negligent entrustment in the vehicle renting or leasing context, the rental or leasing company generally must have some special knowledge concerning a characteristic or condition peculiar to the renter that renders that person’s use of the vehicle unreasonably dangerous. Plaintiffs’ counsel typically allege that negligent entrustment is at issue where the driver appears to be intoxicated at the time of the rental or has a known substance abuse problem; where a renter is known by the rental company and its agents to be a reckless driver; or  where the rental company has reason to know that the renter may cause injury to others.

On the other hand, courts around the country have found that the following circumstances did not constitute negligent entrustment:

(1) failure to research the renter’s driving record; 65 65. See Flores v. Enterprise Rent-A-Car Co., 116 Cal. Rptr. 3d 71, 78 (2010). ×

(2) failure to recognize the signs of habitual drug use (when renter was not under the influence at the time of rental); 66 66. See Weber v Budget Truck Rental, 254 P.3d 196 (Wash. Ct. App. 2011). ×

(3) renting to an individual whose license had been suspended, but who had not yet received notification of the suspension; 67 67. See Young v. U-Haul, 11 A.3d 247 (D.C. Cir. 2011). ×

(4) failure to administer a driving test or to ensure that the driver is capable of actually operating the vehicle; 68 68. See Reph v. Hubbard, No. 07-7119, 2009 WL 659910 at *3 (E.D. La. 2009). ×

(5) renting to an individual who does not speak English fluently; (6) renting to an individual with an arm splint who did not indicate that the splint would interfere with his ability to drive; 69 69. See Mendonca v. Winckler and Corpat, Inc., No 1-5007-JLV, 2014 WL 1028392 (D.S.D. 2014). ×  and

 (7) renting to a former customer who previously reported an accident in a rental car and also allegedly returned a car with illegal drugs left behind. 70 70. See Maisonette v. Gromiler, No. FSTCV176031477S, 2018 WL 3203887 (Conn. Super. Ct. 2018). ×

4. State Laws Addressing New Mobility Platforms

More recently, some states have begun to recognize the emergence of new mobility models and have amended existing laws or passed new laws to address some of the issues. For example:

  • In 2011, California amended its insurance code to include a “personal vehicle sharing” statute, which regulates insurance aspects of “personal vehicle sharing programs” that facilitate sharing of private passenger vehicles (i.e., vehicles that are insured under personal automobile policies insuring a single individual or individuals residing in the same household) for non-commercial purposes, as long as the annual revenue received by the vehicle’s owners from the personal vehicle sharing does not exceed the annual expenses of owning and operating the vehicle (including the costs associated with personal vehicle sharing). 71 71. See Cal. Ins. Code 11580.24 (West 2018). Oregon and Washington have similar laws. ×
  • In 2012, California amended its driver’s license inspection statute to exempt membership programs permitting remote, keyless access to vehicles from driver’s license inspection requirements. 72 72. Cal. Civ. Code § 1939.37 (Deering 2019). × As of the date of this article, a similar draft bill is pending in Massachusetts. 73 73. H.D. 4139 (Mass. 2019). A similar bill came into effect in Florida on July 1, 2019. See Fla. Stat. Ann. § 322.38 (West 2019). ×
  • In 2015, Florida and Hawaii amended their laws to impose modified car rental surcharges on “carsharing organizations” (i.e., membership programs providing self-service access to vehicles on an hourly or other short-term basis). 74 74. Fla Stat. Ann. § 212.0606 (LexisNexis 2019); Haw. Rev. Stat. Ann. § 251 (LexisNexis 2019). ×
  • Maryland passed the first comprehensive “Peer-to-Peer Car Sharing Program” law in 2018. The Maryland law defines a “peer-to-peer car sharing program” as, “a platform that is in the business of connecting vehicle owners with drivers to enable the sharingof motor vehicles for financial consideration” 75 75. Md. Code Ann., Ins. § 19-520(a)(9) (LexisNexis 2019). Illinois also passed a peer-to-peer car sharing/rental law in 2018, but that law was vetoed by then-Governor Rauner. Michael J. Bologna, Illinois Governor Pumps the Brakes on Car-Sharing Taxes, Bloomberg; Daily Tax Report: State (August 31, 2018), https://www.bna.com/illinois-governor-pumps-n73014482161/ (last visited May 15, 2019). × and extends a number of vehicle rental law requirements, including those related to safety recalls, 76 76. Md. Code Ann., Transp., § 18.5-109 (LexisNexis 2019). ×  collision damage waiver sales, 77 77. Md. Code Ann., Com. Law, § 14-2101 (LexisNexis 2019). ×  limited lines licensing in connection with the sale of car rental insurance, 78 78. Md. Code Ann., Ins., § 10-6A-02 (LexisNexis 2019). × airport concession agreements, 79 79. Md. Code Ann., Transp. § 18.5-106 (LexisNexis 2019). ×  and recordkeeping requirements, to peer-to-peer car sharing programs. 80 80. Md. Code Ann., Ins. § 19-520 (LexisNexis 2019). × It also exempts the Peer-to-Peer Car Sharing Program operator and the shared vehicle’s owner from vicarious liability based solely on vehicle ownership in accordance with the Graves Amendment. 81 81. Md. Code Ann., Ins. § 19-520(e) (LexisNexis 2019). ×

 As of June 2019, the following states have pending, or have passed, peer-to-peer car sharing/car rental (or personal motor vehicle sharing) legislation: Arizona, California, Colorado, Georgia, Hawaii, Indiana, Iowa, Massachusetts, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, Washington, and West Virginia. 82 82. Arizona H.B. 2559 (Ariz. 2019) and S.B. 1305 (Ariz. 2019); A.B. 1263 (Cal. 2019); S.B. 090 (Colo. 2019); H.B. 378 (Ga. 2019); H.B. 241 HD2 SD 1 (Haw. 2019) and S.B. 662 SD2 (Haw. 2019); Pub. L. No. 253 (Ind. 2019) (to be codified at Ind. Code § 9-25-6-3); H.F. 779 (Ia. 2019); H.D. 4139 (Mass. 2019); L.B. 349 (Neb. 2019); S.B. 478 (Nev. 2019); H.B. 274 (N.H. 2019); A.B. 5092 (N.J. 2019); S.B. 556 (N.M. 2019); S.B. 5995 (N.Y. 2019); H.B. 2071 (Wash. 2019); H.B. 2762 (W. Va. 2019). × The scope of the pending bills ranges from extension of rental tax obligations to peer-to peer rentals to more comprehensive schemes similar to that passed in Maryland in 2018.

III.          The Challenge of Compliance

As demonstrated in the brief survey of existing rental laws above incumbent vehicle rental companies (especially those that operate in several states) must navigate numerous and often-inconsistent federal and state laws in their day-to-day operations. In addition to the challenges created by inconsistencies in the substantive requirements of the laws, not all of the laws use the same definition of “vehicle rental company” (which may vary depending upon the length of the transaction and the type of vehicle rented), so it is possible for an entity or transaction to be considered a “rental” in some, but not all, states or for some, but not all, purposes. 83 83. See Minto v. Zipcar New York, Inc., No. 15401/09 (N.Y. Super. Ct., Queens County Mar. 17, 2010). ×

In recent years, the challenge of compliance with existing laws – most of which did not contemplate anything other than a face-to-face handover of vehicle and keys — has increased as new entrants and incumbent operators attempt to innovate and take advantage of new technology to improve operations and customer experience. For example, use of kiosks, keyless access and GPS fleet management are all innovations that can improve the customer experience, which existing vehicle rental laws fail to facilitate. Enter the newer mobility operators, and things become even more interesting, with a close analysis of the definition of “rental company,” “rental vehicle,” and other key terms becoming even more important. To provide some context, consider a few hypotheticals:

Hypothetical 1 A 26-year old driver with a facially valid, but recently suspended driver’s license, rents a car in Arizona and is involved in an accident injuring a third party. Under Arizona law and indeed the law of all states, the rental car operator meets its statutory obligations by inspecting the driver’s license and confirming that it is facially valid. There is no duty to conduct any further investigation into the status of the driver’s license or the driving record of the prospective renter. Under this simple fact pattern, the rental car company has no liability to the injured third party for the negligence of the renter (beyond any state mandated minimum financial responsibility limit). Should the outcome be the same for a carsharing operation where the user accesses the vehicle through an app without any direct in-person contact with personnel of the operator? What about an owner of small fleet of cars who “rents” his vehicles through a peer-to-peer rental platform? How about a subscription program where an employee delivers a vehicle to a “lessee” or “renter” who has elected to switch the model of car being used?

Hypothetical 2 A California carshare member has had possession of a vehicle for three days and the operator receives notice that the member’s credit card is expired. The member has not responded to inquiries from the operator. If the carsharing transaction is considered to be a rental, as noted above, in California and a few other states, the mobility operator is precluded by statute from utilizing the vehicle’s GPS to locate the vehicle (at least until certain time periods have expired). Should that same limitation apply to the carshare operator? What if the purpose was to make sure that vehicles are properly distributed around a region so that it can serve its members’ anticipated demands? What about the renter of a peer-to-peer vehicle who is late with the car – can either the owner of the car or the peer-to-peer platform assist in locating the car via the vehicle’s GPS system? Can the operator of a subscription program utilize GPS to track the location of vehicles?

Hypothetical 3 A 30-year old renter with a valid license rents a vehicle through a peer-to-peer platform and two days later causes an accident resulting in substantial property damage and injuries. Pursuant to the federal Graves Amendment, if a peer-to-peer rental is characterized as a car rental transaction, the vehicle owner might argue there is no vicarious liability for the actions of the driver (assuming there was no negligence in how the transaction was handled). It is possible the arguments would vary if the owner of the vehicle operated a small fleet of cars, which it placed on a peer-to-peer platform. A few courts have concluded that the Graves Amendment protection extends to carshare operations. 84 84. See id. × Should that protection extend to the individual or small fleet owner that utilizes a peer-to-peer platform? Is there any basis to extend the Graves Amendment protection to the platform operator given that it typically does not own the vehicles?

Currently, the answers to many of the questions raised above are unclear with scant guidance from state legislatures or courts. As a result, a mobility operator generally must look to the definition of “rental company” to determine whether its model is or may be covered by a particular law. And that inquiry may lead an incumbent car rental operator to argue that it should no longer be subject to the outdated vehicle rental laws and regulations either.

IV.          Proposal

There is an ongoing debate in the mobility industry as to the extent that some models need to comply with existing laws and regulations related to the rental car industry. In particular, some peer-to-peer companies resist the application of those rules to their operations and argue that they are merely a technology company providing a platform to connect drivers with cars, and therefore are not subject to taxes, licensing requirements, or consumer protection laws governing incumbent rental companies. 85 85. See Turo, Inc. v. City of Los Angeles, 2019 U.S. Dist. LEXIS 6532 (C.D. Cal. 2019) (dismissing as unripe a peer-to-peer platform provider’s claim that it is immune from liability for state law violations under Section 230 of the Communications Decency Act and denying motions to dismiss claims that the City of Los Angeles misclassified the peer-to-peer platform provider as a rental company). × However, others urge that if all mobility operators are offering essentially the same services (use of a non-owned vehicle), then it seems more accurate to consider all mobility operators in the same business – mobility. As the New York Supreme Court noted in the Zipcar cases discussed in Part B, the services provided by a carsharing company (Zipcar) served a similar consumer need and were “little different from ‘traditional rental car’ companies, notwithstanding marketing statements that contrast it with those companies.” 86 86. See Minto v. Zipcar New York, Inc., No. 15401/09; see also Orly Lobel, “The Law of the Platform,” 101 Minn. L. Rev. 87, 112 (November 2016). ×

Setting aside those differences, there is some value to the mobility industry as a whole in consistent laws and regulations on some issues across the country and, of course, in protecting the safety and privacy of users. What follows are a few recommendations that could form the basis for a set of uniform laws applicable to the mobility industry. 87 87. The authors are unaware of any existing model laws for car rental or the broader mobility industry. Although the National Association of Attorneys General issued the NAAG Report on car rental practices and “guidelines” in 1989, those Guidelines were not intended to serve as model and uniform law, but rather guidance on compliance with state unfair and deceptive trade practice laws. See supra note 8. In addition, the NAAG Guidelines are now 30 years’ old and somewhat outdated in light of the changes in technology and the evolution in the mobility industry discussed in this article. ×

A.         Standardized Terms and Definitions 

Mobility operators, consumers, and regulators would benefit if federal and state laws used more consistent definitions for key terms and phrases. The definitions of the different platforms at the beginning of this article could be a starting point (which we repeat here without citations for ease of reference):

  • “Carsharing” – a membership-based service that provides car access without ownership. Carsharing is mobility on demand, where members pay only for the time and/or distance they drive.
  • “Peer-to-Peer Carsharing or Rentals” – the sharing of privately-owned vehicles in which companies, typically for a percentage of the rental charge, broker transactions among car owners and renters by providing the organizational resources needed to make the exchange possible (i.e., online platform, customer support, driver and motor vehicle safety certification, auto insurance and technology).
  • “Subscriptions” – a service that, for a recurring fee allows a participating person exclusive use of a motor vehicle owned by an entity that controls or contracts with the subscription service. Typically, the subscriber is allowed to exchange the vehicle for a different type of vehicle with a certain amount of notice to the operator. The term of the subscription can vary, but should be subject to a periodic renewal by the subscriber (user).
  • “Vehicle Rental” – a customer receives use of a vehicle in exchange for a fee or other consideration pursuant to a contract for an initial period of time less than 30 days.
  • “Mobility Operators” – any person or entity that provides access to a vehicle to another person whether by an in-person transaction, an app-based or online platform, or any other means and whether the entity providing the access is the owner, lessee, beneficial owner, or bailee of the vehicle or merely facilitates the transaction.

In addition, standard definitions for the terms, “rental” and “rental company” would provide additional clarity for all mobility operators, and to the extent feasible, the more narrow term “rental” and its derivatives should be replaced with “mobility.”

“Rental” should focus on the service provided and be distinguished from long-term leases (which are subject to additional laws and regulations, including federal Regulation M). As a starting point, “rental” could be defined as the right to use and possess a vehicle in exchange for a fee or other consideration for an initial period of less than 90 days. 88 88. Although the definition of “consumer lease” is a transaction for a period exceeding 4 months, we note that other federal laws, such as Graham-Leach-Bliley impose additional requirements on leases of at least 90 days. See 12 C.F.R. § 213.2(e)(1) (2011); 16 C.F.R. § 313.3(k)(2)(iii) (2000). ×

“Rental Company” or “Mobility Company” should be defined as “any corporation, sole proprietorship or other entity or person who is engaged in the business of facilitating vehicle rental transactions.” 89 89. See, e.g., H.B. 2762 (W. Va. 2019). × A de minimis exemption for individuals renting private vehicles through a peer-to-peer or other private vehicle program could apply (e.g., no more than X vehicles available for rent during a 12-month period). 90 90. See id. ×

A more uniform definition for “Rental Vehicle” or “Mobility Vehicle” also could produce more consistency across or even within states since some existing vehicle rental laws currently apply only to “private passenger vehicles,” while others apply more broadly to “motor vehicles.” Before proposing model language, however, we believe that regulators and industry experts need to consider several important (and somewhat thorny) issues.

For example, consider the rental of a pick-up truck to a contractor for use at a construction site. If a law applies only to rentals of “private passenger vehicles,” then the pick-up truck likely would not be subject to the law. On the other hand, if the law applies more broadly to “motor vehicles,” then the pick-up truck rental likely would be covered. The policy argument for covering our hypothetical pick-up truck rental may be weaker for consumer protection statutes, like required disclosures for sales of damage waiver or child safety seat rules. On the other hand, using a broader definition of “rental vehicle,” which would include the hypothetical pick-up truck, may better serve the general public policy goals of the Graves Amendment, the Safe Rental Act, and laws related to liability and insurance.

B.         Use of GPS and Telematics Technology

The use of this technology for locating and monitoring vehicles for a legitimate business, operational, maintenance or safety purpose should be permitted. Those states that have restricted the use of GPS tracking have done so to protect the privacy of renters. Operators in states where there is no statutory limitation often provide a full disclosure to users that vehicle location and other data may be monitored. We believe there are certain mobility models and circumstances where location and other data should be monitored – as long as there is full disclosure. For example, a free-floating carshare operator should be allowed to monitor vehicle location for the purpose of serving anticipated demand. Similarly, an operator of an EV fleet should be allowed to monitor a vehicle’s battery charge and location to ensure an adequate charge level for the next user. Finally, mobility operators should have the right to use GPS or other technology to locate vehicles that have not been returned on time or when the operator otherwise has reason to believe that the vehicle has been abandoned or stolen, or to track mileage driven or fuel used for purposes of charging associated fees (provided there is appropriate notice and full disclosure to the user). On a broader scale, uniform regulation that permits some vehicle monitoring, as long as done in a manner to protect the privacy of a user and with full disclosure, should be adopted across all mobility platforms.

C.         Vehicle Access

Provided there is an initial verification of a driver’s license, a mobility operator that either allows access to vehicles without in-person contact or does not require signing of a rental agreement at the time of rental should be subject to a provision similar to the following:

If a motor vehicle rental company or private vehicle rental program provider facilitates rentals via digital electronic, or other means that allow customers to obtain possession of a vehicle without in person contact with an agent or employee of the provider, or where the renter does not execute a rental contract at the time of rental, the provider shall be deemed to have met all obligations to physically inspect and compare a renter’s driver license pursuant to this article when such provider:

  1. At the time a renter enrolls, or any time thereafter, in a membership program, master agreement, or other means of establishing use of the provider’s services, requires verification that the renter is a licensed driver; or
  2. Prior to the renter taking possession of the rental vehicle, the provider requires documentation that verifies the renter’s identity. 91 91. Id. ×

D.         Graves Amendment    

The Graves Amendment, by its language, applies to the business of “renting or leasing” vehicles. A few state court cases have confirmed that Graves applies to carsharing. That application should be expressly adopted on a national basis and extended to all mobility models that involve a vehicle “owner’s” grant of the right to possess and use a vehicle in exchange for a fee or other consideration (including loaner vehicles).

Similarly, subscription programs which operate somewhere between incumbent car rental and vehicle leasing programs, at their core involve the short-term use of a vehicle in exchange for payment. Provided the subscription program complies with state rental car laws or applicable subscription legislation, the operation should be subject to the Graves Amendment. For that reason, we recommend that state legislatures either refine the Indiana/North Carolina definition of “subscription” to clarify that the model is a rental or lease for purposes of the Graves Amendment or simply state that subscription models are exempt from state vicarious liability laws based on vehicle ownership.

Peer-to-Peer platforms raise some issues when considering the Graves Amendment. On the one hand, an end-user is paying money to use a vehicle that belongs to someone else much like an incumbent rental car operation. On the other hand, a true “peer”-or individual- who occasionally lists his or her personal vehicle for rent when not using it may not really be in the business of renting cars. Much of the recent Peer-to-Peer legislation addresses this and related issues. Our suggestion is that Peer-to-Peer be subject to express state legislation and that such legislation impose sufficient operational, safety and economic obligations on operators, including required insurance coverage. In the absence of Peer-to-Peer legislation, an operator should have to comply with existing state rental car regulations especially if the operator somehow claims it is subject to the Graves Amendment.

E.         Americans with Disabilities Act

    Compliance with and exceptions to the ADA is complex. However, we propose that all mobility operators with fleets above a certain size must provide adaptive driving devices for selected vehicles, as long as the customer provides advance notice (which may vary depending upon the operator’s location and fleet size) and the adaptive driving devices are compatible with vehicle design and do not interfere with the vehicle’s airbag or other safety systems.

F.         Disclosure Requirements

All operators must provide sufficient disclosures to users regarding the following matters: fees, charges, damage waivers, added insurance, and vehicle technology. However, typical requirements in the existing state rental laws, including specified placement and font size for disclosures and in-person acknowledgment of receipt of those disclosures, simply do not contemplate modern technology, including digital agreements and remote access.  We propose the 2018 amendment to the New York vehicle rental law as the model for addressing required disclosures and formatting in electronic and/or master, membership agreements. That amendment provides:

(a) Notwithstanding any other provision of this section, any notice or disclosure of general applicability required to be provided, delivered, posted, or otherwise made available by a rental vehicle company pursuant to this section shall also be deemed timely and effectively made where such notice or disclosure is:

(i)       provided or delivered electronically to the renter at or before the time required provided that such renter has given his or her expressed consent to receive such notice or disclosure in such a manner; or

(ii)      included in a member or master agreement in effect at the time of rental.

(b)  . . . Notices and disclosures made electronically pursuant to this subdivision shall be exempt from any placement or stylistic display requirements, including but not limited to location, font size, typeset, or other specifically stated description; provided such disclosure is made in a clear and conspicuous manner. 92 92. N.Y. Gen. Bus Law § 396-z(16). ×

G.         Other Issues

There are, of course, other issues the industry can consider. For example, some states (New York and Michigan) have laws requiring rental car companies to make vehicles available to younger drivers, subject to certain conditions. Some uniformity on the ability of mobility operators to set minimum age requirements would reduce risk. Additionally, there are inconsistent laws across the country regarding the amount of time a rental car company must wait after a renter fails to return a car before it can notify law enforcement. Appropriate and consistent rules as to when an operator can start to recover a valuable (and mobile) asset would help promote growth in the industry.

The mobility revolution involves a number of different players with disparate and sometimes competing interests. Not all the participants will agree on all the issues, however, we offer the above suggestions to encourage discussion and to advance some level of consistency on a few points.


Wes Hurst is an attorney with a nationwide Mobility and Vehicle Use Practice. He represents rental car companies, carsharing companies, automobile manufacturers and companies pursuing new and emerging business models related to mobility and the use of vehicles. Wes is a frequent speaker and author on mobility related topics. Wes is in the Los Angeles office of Polsinelli and can be reached at whurst@polsinelli.com.

Leslie Pujo is a Partner with Plave Koch PLC in Reston, Virginia. In her Mobility and Vehicle Use Practice, Leslie regularly represents mobility operators of all types, including car rental companies, RV rental companies, automobile manufacturers and dealers, carsharing companies and other emerging models. Leslie is a frequent speaker and author on car rental and other mobility topics and can be reached at lpujo@plavekoch.com.

* The authors wish to thank Naila Parvez for her assistance

“Safety.” A single word that goes hand-in-hand (and rhymes!) with CAV. If much has been said and written about CAV safety already (including on this very blog, here and there,) two things are certain: while human drivers seem relatively safe – when considering the number of fatalities per mile driven – there are still too many accidents, and increasingly more of them. 

The traditional approach to safely deploying CAVs has been to make them drive, drive so many miles, and with so few accidents and “disengagements,” that the regulator (and the public) would consider them safe enough. Or even safer than us!  

Is that the right way? One can question where CAVs are being driven. If all animals were once equal, not every mile can be equally driven. All drivers know that a mile on a straight, well-maintained road by a fine sunny day is not the same as a mile drive on the proverbially mediocre Michigan roads during a bout of freezing rain. The economics are clear; the investments in AV technology will only turn a profit through mass deployment. Running a few demos and prototypes in Las Vegas won’t cut it; CAVs need to be ready to tackle the diversity of weather patterns we find throughout the world beyond the confines of the US South-West.

Beyond the location, there is the additional question of whether such “testing” method is the right one in the first place. Many are challenging what appears to be the dominant approach, most recently during this summer’s Automated Vehicle Symposium. Their suggestion: proper comparison and concrete test scenarios. For example, rather than simply aiming for the least amount of accidents per 1000’s of miles driven, one can measure break speed at 35mph, in low-visibility and wet conditions, when a pedestrian appears 10 yards in front of the vehicle. In such a scenario, human drivers can meaningfully be compared to software ones. Furthermore, on that basis, all industry players could come together to develop a safety checklist which any CAV must be able to pass before hitting the road. 

Developing a coherent (and standardized?) approach to safety testing should be at the top of the agenda, with a looming push in Congress to get the AV bill rolling. While there are indications that the industry might not be expecting much from the federal government, this bill still has the possibility of allowing CAVs on the road without standardized safety tests, which could result in dire consequences for the industry and its risk-seeking members. Not to mention that a high-risk business environment squeezes out players with shallower pockets (and possibly innovation) and puts all road users, especially those without the benefit of a metal rig around them, at physical and financial risk were an accident to materialize. Signs of moderation, such as Cruise postponing the launch of its flagship product, allows one to be cautiously hopeful that “go fast and break things” mentality will not take hold in the automated driving industry.

*Correction 9/9/19 – A correction was made regarding the membership to 1958 Agreement and participation at the World Forum.

A European Commission plan to implement the connected car-specific 802.11p “Wi-Fi” standard for vehicle-to-vehicle (V2V) communication was scrapped early July after a committee of the Council of the European Union (which formally represents individual member states’ during the legislative process) rejected it. The standard, also known as ITS-G5 in the EU, operates in the same frequency range as domestic Wi-Fi, now most often deployed under the 802.11n specification.

The reason for this rejection were made clear by the opponents of “Wi-Fi V2V”: telecommunication operators, and consortia of IT equipment and car manufacturers (such as BMW and Qualcomm) would never allow locking out 5G and its ultra-low latency, “vehicle-to-everything” (V2X) solutions. In turn, countries with substantial industrial interest in those sectors (Germany and Finland, to name only two,) opposed the Commission plan.

Yet it appears that Commissioner Bulc had convincing arguments in favor of 802.11p. In her letter to the European Parliament’s members, she stresses that the technology is available now, and can be successfully and quickly implemented, for immediate improvements in road safety. In her view, failure to standardize now means that widespread V2V communication will not happen until the “5G solutions” come around.

5G is a polarizing issue, and information about it is often tainted with various industries’ talking points. It first matters to differentiate 5G as the follow-up on 4G, and 5G as the whole-new-thing-everyone-keeps-talking-about. As the follow up on 4G, 5G is the technology that underpins data delivery to individual cellphones. It operates mostly in higher frequencies than current 4G, higher frequencies which have a lower range and thus require more antennas. That in turn explains why most current cellphone 5G deployments are concentrated in large cities.

The “other” 5G is based on a promise: the higher the frequency, the higher the bandwidth and the lower the latency. Going into the hundreds of GHz, 5G theoretically delivers large bandwidth (in the range of 10 Gbps) in less than 1ms, with the major downside of a proportionally reduced range and ability to penetrate dense materials.

The logical conclusions of these technical limitations is that the high-bandwidth, low-latency 5G, set to revolutionize the “smart”-everything and that managed to gather some excitement will become a reality the day our cities are literally covered with antennas at every street corner, on every lamppost and stop sign. Feasible over decades in cities (with whose money, though?), a V2X world based on a dense mesh of antennas looks wholly unrealistic in lower density areas.

Why does it make sense, then, to kick out a simple, cheap and patent-free solution to V2V communication in favor of a costly and hypothetical V2X?

Follow the money, one would have said: what is key in this debate is understanding the basic economics of 5G. As the deployment goes on, it is those who hold the “Standard Essential Patents” (SEPs) who stand to profit the most. As reported by Nikkei in May 2019, China leads the march with more than a third of SEPs, followed by South Korea, the US, Finland, Sweden and Japan.

If the seat of the V2V standard is already taken by Wi-Fi, that is one less market to recoup the costs of 5G development. It thus does not come as a surprise that Finland was one of the most vocal opponents to the adoption of 802.11p, despite having no car industry – its telecom and IT sector have invested heavily in 5G and are visibly poised to reap the rewards.

Reasonable engineers may disagree on the merits of 802.11p – as the United States’ own experience with DSRC, based on that same standard, shows. Yet, the V2X 5G solutions are nowhere to be seen now, and investing in such solutions was and remains to this day a risky enterprise. Investments required are huge, and one can predict there will be some public money involved at some point to deploy all that infrastructure.

“The automotive industry is now free to choose the best technology to protect road users and drivers” said Lise Fuhr, director general of the European Telecommunications Network Operators’ Association (ETNO) after their win at the EU Council. I would rather say: free to choose the technology that will preserve telcos’ and some automakers’ risky business model. In the meantime, European citizens and taxpayers subsidize that “freedom” with more car accidents and fatalities, not to speak of other monetary costs 5G brings about. The seat will have been kept warm until the day their 5G arrives – if it does – at some point between 2020 and 2025. In the meantime, users will have to satisfy ourselves of with collision radars, parking cameras, cruise control and our good ol’ human senses.

One of the most persistent issues in public transportation is the so-called “last mile” problem. The essence of the problem is that, if the distance between the nearest transit stop and a rider’s home or office is too far to comfortably walk, potential riders will be more likely to drive than use public transit. The rise of smartphone enabled mobility options like ridesharing, bike-share, and e-scooters have been pitched as potential solutions to this problem. However, some cities have found that these technologies may create as many problems as they solve.

This post will focus in particular on the rise of e-scooters. Over roughly the last two years, e-scooters from companies like Bird and Lime have proliferated across American cities. Often appearing seemingly out of nowhere as companies frequently launch the product by dropping off a batch of scooters overnight without warning, they have been a source of angst for many city officials.

As the scooters spread, ridership has proliferated. Thanks to ease of use, the proliferation of smartphones, and increasing comfort with new forms of mobility, ridership has accelerated at a faster pace than ride-hailing apps, bikeshare programs, or other mobility platforms that have developed in recent years.

With this growth though has come challenges. In June, Nashville chose to ban e-scooters in the aftermath of the city’s first rider death. Last year, in response to concerns about safety and obstruction of sidewalks, Cleveland banned e-scooters. In the initial rollout period Cleveland was far from alone, as cities from St. Louis to San Francisco to Santa Monica also moved to ban or significantly reduce the number of scooters allowed.

Some of these bans, or at least use restrictions, may have been justified. Because they have no defined ports at which to be put away, scooters are often left blockading the sidewalk. At least 8 scooter riders have died in crashes, and users often remain confused about what laws apply to them and where they can ride. Hospitals across the country have seen a spike in emergency room visits related to scooter crashes, and the Centers for Disease Control has found that head trauma is the most common injury resulting from a scooter crash.

Slowly though, cities have begun experimenting with ways to let scooters in without letting them run wild. Last month Cleveland allowed scooters back in, with new limitations on where they are allowed to go and who is allowed to ride. Norfolk, VA recently contracted with e-scooter company Lime to allow them to have a local monopoly over scooter service in the city. The move may allow Norfolk greater control over how Lime operates within its borders, which could ultimately increase safety.

Given the obvious potential for e-scooters to increase mobility to parts of a city that aren’t within easy walking distance of transit stations, cities should continue working to find ways to allow them in while mitigating safety concerns. The results in cities like Norfolk and Cleveland that are working to introduce regulation to this new industry will be important to watch in the coming months.

Many have claimed that EU’s General Data Protection Regulation (GDPR) would “kill AI”. Shortly after its entry into force at the end of May 2018, the New York Times was already carrying industry concerns: “the new European data privacy legislation is so stringent that it could kill off data-driven online services and chill innovations like driverless cars, tech industry groups warn.” Following that train of thought, news outlets, general and specialized alike, have since then piled up on how such regulations on “data” would generally be harmful to innovation.

To be sure, other voices make themselves heard too. When trust in a technology is at stake, heralds of that technology understand that appearing to embrace regulation is a good PR move. Yet, beyond what could be seen as a cynical attitude, there are the pragmatists too. For them, regulation is a given, and with the right mindset, it can be transformed into an advantage.

This is such a mindset one could expect for European Union institutions. Speaking at a tech conference in Slovenia last April, EU Commissioner for Transport Violeta Bulc painted a rosy future for European transportation. Not only is Europe ready for automation, but it is embracing it. Already, car manufacturers must integrate certain automation components to all their new cars, such as lane assistance, distraction sensors and a black box used to “determine the cause of accidents.” And then not only cars, but ships, planes, trains, even drones are part of the EU’s vision for an integrated transportation system, as part of the “mobility as a service,” or MaaS vision. To support that MaaS (all-electric and paperless,) a “European GPS,” Galileo, and widespread 5G deployment, with even a priority on rural areas!

Is this all fluff? Far from seeking refuge from overbearing European red tape, most European AI and automation leaders see themselves in a “tortoise and the hare” paradigm: let the US innovators go fast and break things; we’ll take steady measured steps forward, but we’ll get there, and maybe even before the US. This is what a recent Bloomberg feature article on the booming European automation scene. Concretely, what are these steps? As far as AVs go, the first and main one is shared data sharing. Intense AV testing might be Arizona’s and California’s go-to model. But what is the use case for Waymo’s car beyond the dry, wide, and dunny streets of Phoenix? What about dense urban environments with narrow streets, like in Europe? Or snowy, low-density countryside roads, of which there are plenty in the US during the winter months? Safety in mass deployment will come from the capacity to aggregate everyone’s data, not just your own.

The most surprising part is that this push to open the “walled gardens” of the large OEMs does not even come from the government, but from tech firms. One of them, Austrian, is working an open AV operating system, with the intention to keep safety at the core of its business philosophy. As its founder told Bloomberg, “open to information sharing” is a requirement for safety. With such an angle, one is not surprised to read that the main challenge the company faces is the standardization of data flows; a tough challenge. But isn’t what innovation is about?

While the clever scientists won’t give the press all their tricks, many appear confident, stating simply that working with such regulations simply requires a “different approach.”

For the past several months, this blog has primarily focused on new legal questions that will be raised by connected and automated vehicles. This new transportation technology will undoubtedly raise novel concerns around tort liability, traffic stops, and city design. Along with raising novel problems, CAVs will also add new urgency to longstanding legal challenges. In some ways, this is best encapsulated in the field of privacy and data management.

In recent decades, the need to understand where our data goes has increased exponentially. The smartphones that most of us carry around every day are already capable of tracking our location, and recording a lot of our personal information. In addition to this computer/data generation machine in our pockets, the CAV will be a supercomputer on wheels, predicted to generate 4,000 gigabytes of data per day. Human driven vehicles with some automated features, such as Tesla’s with the company’s “Autopilot” functionality, already collect vast amounts of user data. Tesla’s website notes that the company may access a user’s browsing history, navigation history, and radio listening history, for example.

In response to this growing concern, California recently passed a sweeping new digital privacy law, set to take effect in 2020. Nicknamed “GDPR-Lite” after the European Union’s General Data Protection Regulation, California’s law “grants consumers the right to know what information companies are collecting about them, why they are collecting that data and with whom they are sharing it.” It also requires companies to delete data about a customer upon request, and mandates that companies provide the same quality and cost of service to users who opt out of data collection as those who opt in.

In comparison to the GDPR, California’s law is relatively limited in scope. The California Consumer Privacy Act (CCPA) is tailored to apply only to businesses that are relatively large or that are primarily engaged in the business of collecting and selling personal data. Furthermore, CCPA contains few limitations on what a business can do internally with data it collects. Instead, it focuses on the sale of that data to third parties.

In many ways, it remains too early to evaluate the effectiveness of California’s approach. This is in part because the law does not take effect until the beginning of next year. The bill also enables the California Attorney General to issue guidance and regulations fleshing out the requirements of the bill. These as-yet-unknown regulations will play a major role in how CCPA operates in practice.

Regardless of its uncertainties and potential shortcomings though, CCPA is likely to play a significant role in the future of American data privacy law and policy. It is the first significant privacy legislation in the US to respond to the recent tech boom, and it comes out of a state that is the world’s fifth largest economy. CCPA’s implementation will undoubtedly provide important lessons for both other states and the federal government as they consider the future of data privacy.

By David Redl

Cite as: David Redl, The Airwaves Meet the Highways
2019 J. L. & Mob. 32.

I applaud and congratulate the University of Michigan for launching the Journal of Law and Mobility. The timing is perfect. The information superhighway is no longer just a clever metaphor. We are living in an era where internet connectivity is a critical part of making transportation safer and more convenient.

Internet connectivity has powered the U.S. and global economies for years now. In the early stages, dial-up connections enabled users to access a vast store of digital information. As the internet and its usage grew, so did the demand for faster broadband speeds. Finally, wireless networks untethered the power of broadband Internet so consumers could have fast access when and where they want it.

We are now seeing technology advances in the automotive sector begin to better align with what has occurred in the communications space. The possibilities for what this means for human mobility are truly exciting. Challenges abound, however, with questions around the security and safety of self-driving vehicles and how to create the infrastructure and policies needed for vehicle connectivity. While many of these will be sorted out by the market, policy levers will also play a role.

In the late 1990s, the Federal Communications Commission (FCC) agreed to set aside radio frequencies for intelligent transportation systems (ITS), persuaded that emerging advances in communications technologies could be deployed in vehicles to increase safety and help save lives. 93 93. Amendment of Parts 2 and 90 of the Commission’s Rules to Allocate the 5.850-5.925 GHz Band to the Mobile Service for Dedicated Short Range Communications of Intelligent Transportation Services, Report and Order, 14 FCC Rcd. 18221 (Oct. 22, 1999). × Specifically, the FCC allocated the 75 megahertz of spectrum between 5850-5925 MHz (5.9 GHz band) for ITS. 94 94. Id. × The automobile industry’s technological solution was to rely primarily on a reconfiguration of IEEE Wi-Fi standards 95 95. The Working Group for WLAN Standards, IEEE 802.11 Wireless Local Area Networks, http://www.ieee802.org/11/ (last visited Oct. 31, 2018). × suitable for ITS (802.11p) so vehicles could “talk” to one another and to roadside infrastructure. 96 96. Accepted nomenclature for these communications include vehicle-to-vehicle (V2V), vehicle-to-infrastructure (V2I), or more generally vehicle-to-x (V2X). Other applications include vehicle-to-pedestrian. × The FCC in turn incorporated the Dedicated Short Range Communications (DSRC) standards into its service rules for the 5.9 GHz band. 97 97. Amendment of the Commission’s Rules Regarding Dedicated Short-Range Communication Services in the 5.850-5.925 GHz Band (5.9 GHz Band), 19 FCC Rcd. 2458 (Feb. 10, 2004). ×

The National Telecommunications and Information Administration (NTIA), by statute, is the principal advisor to the President of the United States on information and communications policies, including for the use of radiofrequency spectrum. NTIA also is responsible for managing spectrum use by federal government entities. As such, NTIA seeks to ensure that our national use of spectrum is efficient and effective. Over the past two decades, innovations in wireless technologies and bandwidth capacity have completely changed what is possible in connected vehicle technology. 2G wireless evolved to 3G, and then 4G LTE changed the game for mobile broadband. 5G is in the early stages of deployment. Meanwhile, Wi-Fi not only exploded in usage but in its capability and performance. Many vehicles in the market today are equipped with wireless connectivity for diagnostic, navigation and entertainment purposes. Yet DSRC as a technology remains largely unchanged, notwithstanding recent pledges from proponents to update the standard. 98 98. See IEEE Announces Formation of Two New IEEE 802.11 Study Groups, IEEE Standards Association (June 5, 2018), https://standards.ieee.org/news/2018/ieee_802-11_study_groups.html. × This stasis persists despite the technological leaps of advanced driver assistance systems, enhanced by innovations in vehicular radars, sensors and cameras.

This situation is not new or novel as traditional industries continue to grapple with the pace of technological change in the wireless sector.  In fact, the automotive sector has faced the challenge of wireless technological change before, struggling to adapt to the sunset of the first generation of analog wireless networks.  This leads to the question of whether, as some promise, DSRC effectively broadens a vehicle’s situational awareness to beyond line-of-site as the industry creeps toward autonomous driving – or has innovation simply left DSRC behind? The answer is important to the question of whether it makes sense to continue with DSRC for V2X communications.  Regardless of how the question is answered, we must address who should answer it.

One distinction between V2X communications for safety applications and most other communications standards choices is that a fragmented market could have drastic consequences for its effectiveness, given that vehicles must be able to talk to each other in real time for the entire system to work. This is why the National Highway Transportation Safety Administration (NHTSA) initially proposed a phased-in mandate of DSRC beginning with cars and light trucks. 99 99. See Federal Motor Vehicle Safety Standards; V2V Communications, 82 Fed. Reg. 3854 (Jan. 12, 2017). ×

This question of whether to mandate DSRC has also been complicated by inclusion in 3GPP standards of a cellular solution (C-V2X), first in Release 14 for 4G/LTE, 100 100. Dino Flore, Initial Cellular V2X Standard Complete, 3GPP A Global Initiative (Sept. 26, 2016), http://www.3gpp.org/news-events/3gpp-news/1798-v2x_r14. The updates to the existing cellular standard are to a device-to-device communications interface known as the PC5, the sidelink at the physical layer, for vehicular use cases addressing high speed and high density scenarios. A dedicated band is used only for V2V communications. × and continuing with Release 15 and especially Release 16 for 5G, targeted for completion in December 2019. 101 101. Release 16, 3GPP: A Global Initiative (July 16, 2018), https://www.3gpp.org/release-16. × It raises the legitimate question of whether leveraging the rapid innovation and evolution in wireless communication technology is the right way to ensure automotive safety technology benefits from the rapid pace of technological change, and what role the federal government should play in answering these questions.

Despite the federal government’s legitimate interest in vehicle safety, as is true in most cases I question whether the federal government should substitute its judgement for that of the market. A possible solution that strikes a balance between legitimate safety needs and technological flexibility are federal performance requirements that maintain technological neutrality.

Moreover, because the spectrum environment has changed drastically since the 1990s many are questioning whether protecting this 75 megahertz of mid-band spectrum for ITS use is prudent. The 5.9 GHz band is adjacent to spectrum used for Wi-Fi 102 102. Table of Frequency Allocations, 47 C.F.R. § 2.106 (2018). × , which makes it unsurprising that some are calling for access to 5.9 GHz spectrum as a Wi-Fi expansion band. Other still question whether V2V safety communications require protected access to all 75 megahertz. NTIA, the FCC, and the Department of Transportation continue to study the feasibility of whether and how this band might be shared between V2V and Wi-Fi or other unlicensed uses and remain committed to both the goal of increased vehicle safety and the goal of maximum spectrum efficiency.

While I am optimistic that wireless technologies will bring a new level of safety to America’s roadways, a number of other policy and legal issues, including user privacy and cybersecurity, will persist as challenges despite being addressed in current solutions. If we are to see the kind of adoption and reliance on V2X safety applications and realize the systemic improvements in safety they portend, Americans must have trust in the security and reliability of these technologies.

The marriage of communications technology with transportation will help define the 21st century, and potentially produce enormous benefits for consumers. A lot of work remains, however, to ensure we have the right laws, regulations and policy frameworks in place to allow private sector innovation to flourish. This forum can play an important role in moving the dialogue forward.


David Redl is the Assistant Secretary for Communications and Information at the U.S. Department of Commerce, and Administrator of the National Telecommunications and Information Administration.

The European Parliament, the deliberative institution of the European Union which also acts as a legislator in certain circumstances, approved on February 20, 2019 the European Commission’s proposal for a new Regulation on motor vehicle safety. The proposal is now set to move to the next step of the EU legislative process; once enacted, an EU Regulation is directly applicable in the law of the 28 (soon to be 27) member states.

This regulation is noteworthy as it means to pave the way for Level 3 and Level 4 vehicles, by obligating car makers to integrate certain “advanced safety features” in their new cars, such as driver attention warnings, emergency braking and a lane-departure warning system. If many of us are familiar with such features which are already found in many recent cars, one may wonder how this would facilitate the deployment of Level 3 or even Level 4 cars. The intention of the European legislator is not outright obvious, but a more careful reading of the legislative proposal reveals that the aim goes much beyond the safety features themselves: “mandating advanced safety features for vehicles . . .  will help the drivers to gradually get accustomed to the new features and will enhance public trust and acceptance in the transition toward autonomous driving.” Looking further at the proposal reveals that another concern is the changing mobility landscape in general, with “more cyclists and pedestrians [and] an aging society.” Against this backdrop, there is a perceived need for legislation, as road safety metrics have at best stalled, and are even on the decline in certain parts of Europe.

In addition, Advanced Emergency Braking (AEB) systems have been trending at the transnational level, in these early months on 2019. The World Forum for Harmonization of Vehicle Regulations (known as WP.29) has recently put forward a draft resolution on such systems, in view of standardizing them and making them mandatory for the WP.29 members, which includes most Eurasian countries, along with a handful of Asia-Pacific and African countries. While the World Forum is hosted by the United Nations Economic Commission for Europe (UNECE,) a regional commission of the Economic and Social Council (ECOSOC) of the UN, it notably does not include among its members certain UNECE member states such as the United States or Canada, which have so far refused to partake in World Forum. To be sure, the North American absence (along with that of China and India, for example) is not new; they have never partaken in the World Forum’s work since it started its operations in 1958. If the small yellow front corner lights one sees on US cars is not something you will ever see on any car circulating on the roads of a W.29 member state, one may wonder if the level of complexity involved in designing CAV systems will not forcibly push OEMs toward harmonization; it is one thing to live with having to manufacture different types of traffic lights, and it is another one to design and manufacture different CAV systems for different parts of the world.

Yet it is well known that certain North American regulators are not a big fan of such approach. In 2016, the US DoT proudly announced an industry commitment of almost all car makers to implement AEB systems in their cars, with the only requirement that such systems satisfy set safety objectives. If it seems like everyone would agree that limited aims are sometimes the best way to get closer to the ultimate, bigger goal, the regulating style varies. In the end, one must face the fact that by 2020, AEB systems will be harmonized for a substantial part of the global car market, and maybe, will be so in a de facto manner even in North America. And given that the World Forum has received a received a clear mandate from the EU – renewed as recently as May 2018 – to develop a global and comprehensive CAV standard, North American and other Asian governments who have so far declined to join the W.29 might only lose an opportunity to influence the outcome of such CAV standards by sticking to their guns.

Americans have traditionally had an understandable skepticism towards government collection of our data and monitoring of our private communications. The uproar caused by the Snowden leaks in 2013 was followed by increased public attention to data privacy. In a 2014-15 survey, 57% of respondents said that government monitoring of the communications of US citizens was unacceptable. Over 90% of respondents found it important to be able to personally control what data about them was shared, and with whom. The public has expressed similar concerns about data-sharing among private companies. Nearly 2/3 of Americans say that current laws do not go far enough to protect their privacy, and would support increased regulation of advertisers.

Limitations on government collection of private data are built into the Fourth Amendment, as applied to collection of digital data in Carpenter. But there is no analogous limitation on the ability of corporations to share our data far and wide, as anyone who has seen a targeted Facebook ad pop up minutes after searching for an item on Amazon knows. Indeed, First Amendment cases such as Sorrell v. IMS Health, in bolstering protections for commercial speech, may significantly restrict the ability of Congress to regulate private companies selling our data amongst themselves. While many targeted ads can make data sharing seem harmless (I see you just bought a watch. Perhaps I can interest you in these 73 similar watches?), at times it may be more nefarious. 

Public unease with data sharing may be especially warranted in the case of mobility data. The majority of Americans move about the world in cars. While many of those trips are innocuous, some may be trips to an unpopular church, to the home of a secret paramour, or to the scene of a crime. Even the innocuous trips may be simply embarrassing (maybe you ate at a fast food restaurant a few more times than you should have, or fibbed to your spouse once or twice about working late when you were actually getting an after-work drink with friends). These are the type of excursions that, if your car were continuously collecting data on its whereabouts, could easily be sold to a private actor that would be willing to use it against you.

The concern that a private company could abuse access to your personal data just as easily as the government has led legal scholar Jeffrey Rosen to propose a new Constitutional amendment. Such affronts to dignity, as Rosen describes this all-consuming data collection and sale, are problematic enough that we need an amendment to bar unreasonable searches and seizures by either the government or a private corporation. Mercatus Center Senior Research Fellow Adam Theirer has argued that Rosen’s proposal is ill-advised, but still supports making it easier for consumers to restrict access to their private data.

Under current doctrine, the path to heightened protections from abuse of our personal data by private companies is unclear. In Carpenter, the Court took account of the changing nature of technology to limit the government’s ability to collect our information from corporations under the Fourth Amendment. Going forward, the Court should bear in mind the public’s desire for privacy, and the increasing prominence of data collection companies such as Google, Amazon, and soon, CAV operators. As in Carpenter, they should adjudicate with changing technology in mind, and seek to enable Congress’ ability to legislate limits on the ability of private companies to sell our personal data.

Recently, I wrote about the prospects for federal legislation addressing connected and autonomous vehicles. While the subject will be taken up in the new Congress, the failed push for a bill at the end of 2018 is an indication of the steep hill any CAV legislation will have to overcome. Despite the lack of federal legislation, the Department of Transportation (DOT) has been active in this space. In October 2018, the Department issued Preparing for the Future of Transportation: Automated Vehicles 3.0, DOT’s most comprehensive guide to date outlining their plan for the roll-out of CAVs. The document indicates that the department expects to prioritize working with industry to create a set of voluntary safety standards over the development of mandatory regulations.

Given the Trump administration’s broad emphasis on deregulation as a driver of economic growth, this emphasis on voluntary standards is unsurprising. A handful of consumer groups focused on auto safety have raised the alarm over this strategy, arguing that mandatory regulations are the only way to both ensure safety and make the general public confident in automated driving technology.

The remainder of this post will discuss the effectiveness of voluntary safety standards relative to mandatory regulation for the CAV industry, and consider the prospects of each going forward. While little information is available about the response to either option in the CAV field, I will seek to draw lessons from experience with regulation of the traditional automobile industry.

The National Highway Transportation Safety Administration (NHTSA) has undergone a dramatic strategic shift over its half-century existence. In its early days, NHTSA was primarily devoted to promulgating technology-forcing regulations that sought to drive innovation across the industry. Jerry Mashaw and David Harfst have documented the agency’s shift away from adopting regulations in favor of an aggressive recall policy for defective products in the 1980s. As they write, the agency then returned to a regulatory policy in the 21st century. However, rather than attempt to force technology, they chose to mandate technologies that were already in use across most of the auto industry. While these new standards still took the form of mandatory regulation, they operated as virtually voluntary standards because they mandated technologies the industry had largely already adopted on its own. Mashaw and Harfst found that this shift was essentially a trade-off of slower adoption of new safety technology, and potentially lost lives, in favor of greater legitimacy in the eyes of the courts and industry. Particularly given the rise of pre-enforcement judicial review of regulations, this shift may be seen as a defensive mechanism to allow more regulations to survive court challenges.

Even as NHTSA has pulled back from technology forcing regulations, there has been no sustained public push for more aggressive auto safety regulation. This may be because the number of traffic fatalities has been fallen slightly in recent decades. This shift is likely due more to a reduction in drunk driving than improved technology. With studies showing that the public is particularly wary of CAV adoption, it remains to be seen whether NHTSA will seek to return to its technology-forcing origins. While the auto industry has traditionally preferred voluntary adoption of new technologies, it may be the case that government mandates would help ease public concern about CAV safety, speed the adoption of this new technology, and ultimately save lives.

To date, twenty-nine states have enacted legislation related to connected and autonomous vehicles (CAVs). Eleven governors have issued executive orders designed to set guidelines for and promote the adoption of CAVs. In response to this patchwork of state laws, some experts have argued that the federal government should step in and create a uniform set of safety regulations.

Partially responding to such concerns, the National Highway Traffic Safety Administration (NHTSA) issued A Vision for Safety 2.0 in September, 2018. The guidance document contains voluntary guidance for the automotive industry, suggesting best practices for the testing and deployment of CAVs. It also contains a set of safety-related practices for states to consider implementing in legislation.

The NHTSA document is likely to have some effect on the development of safety practices for the testing and deployment of automated vehicles. While not mandatory, the guidance does give the industry some indication of what the federal government is thinking. Some companies may take this document as a sign of what they will be required to do if and when the Congress passes CAV legislation, and begin to prepare for compliance now. Furthermore, this nudge from the federal government could influence state action, as legislators with limited expertise on the subject look to NHTSA for guidance in drafting their CAV bills.

Without new legislation however, the force of NHTSA’s guidance will be blunted. No manufacturer is required to follow the agency’s views, and state legislatures are free to continue passing conflicting laws. Such conflicts among states could make it difficult to design a vehicle that is able to meet all state standards and travel freely throughout the country. To date, this has not been an acute problem because CAVs, where they are deployed, operate only within a tightly limited range. As use of these vehicles expands however, uniform standards will begin to appear more necessary.

A late push for CAV legislation in the last Congress petered out in the December lame duck session. After unanimously passing the House in 2017, the bill stalled when Senate Democrats balked at what they saw as its lack of sufficient safety protections. With Congress’ schedule blocked by the government shutdown, CAV legislation has been put on the back burner so far in 2019. At some point though, Congress is likely to take up a new bill. The Senators who were key drivers of the CAV bill in the past Congress, Gary Peters (D-MI) and Jon Thune (R-SD) remain in the Senate. Both Senators retain their influential positions on the Committee on Commerce, Science, and Transportation. The key change from the previous Congress will be the dynamic in the newly Democratic-controlled House. While a bill passed unanimously last term, it remains to be seen whether the new House will be held back by the same consumer safety concerns that led the Senate to reject the bill last term.

As autonomous vehicle technology continues to march forward, and calls for a uniform nationwide regulatory system are expected to grow. We will be following major developments.

Welcome to 2019! Over the past several months, this page has focused a lot on deployment of connected and autonomous vehicles (CAVs) in US cities. 2018 was indeed a big year for CAVs in the United States. The vehicles were deployed commercially in Arizona, California began to allow testing of the technology without a safety driver, and policymakers and urban planners across the nation thought seriously about how to integrate CAVs into their existing transportation grid.

Running through much of this work is the fear that, if left unchecked, wide-scale deployment of CAVs will kick off an accelerated version of the problems associated with the initial popularization of the automobile – suburban sprawl, increased congestion, deeper economic inequality, and more. Most American cities have proposed addressing these issues – to the extent they have considered them at all – through modest incentive programs. To kick off the new year, I want to briefly examine a city that has taken a much more aggressive tack on curtailing the problems associated with sprawl and traffic.

Even before the widespread adoption of CAVs, Singapore is moving beyond modest incentives to combat congested roads. The city of nearly 6 million people charges commuters nearly $15,000 per year to own a vehicle and use it during rush hour. In 2017, Singapore took the extreme step of announcing a freeze in the growth rate of private car ownership. While such measures seem exorbitant from an American perspective, they have contributed to reduced congestion. Singapore in 2015 was less congested than the year before, and suffered less congestion than cities such as New York, London, or Beijing. Only around 11% of Singapore’s population owns a car, in comparison to 46% of New York City residents and nearly 90% of Angelenos.

The city is also taking steps to prepare for a future dominated by CAVs. Singapore recently removed a requirement that cars have human drivers, and has mandated that all new development meets standards that accommodate CAVs while discouraging car ownership. These new real estate requirements include narrow streets, road markings designed to be easily recognizable by CAVs, and fewer parking spaces.

Such aggressive maneuvers are out of sync with policy across the United States. Many US cities have created carpool lanes to encourage ride-sharing, and Oregon has experimented with a per-mile charge to reduce congestion and plug infrastructure funding gaps that have traditionally been filled with a gas tax. However, such programs have typically been modest. Perhaps most strikingly, in comparison to Singapore’s large yearly fees, the average annual tax levied on vehicle ownership in the US comes in at a little over $200.

In many parts of the US, abundant cheap land and low vehicle taxes set the stage for suburban sprawl and maddening levels of congestion brought on by the first automobile revolution. The same factors are aligned to accelerate these problems in the upcoming CAV revolution. None of this is to say that the Singaporean approach is right for the US. It is certainly possible that, as CAVs are deployed nationwide, their benefits will outweigh any social cost brought on by sprawl and congestion. When setting their own policy though, our cities should examine a full range of options, including places like Singapore that are modeling a more aggressive regulatory posture. Regardless of the approach we choose to take, there are valuable lessons to learn from countries that approach these challenges from a different governance tradition.

California has become the second state in the nation to permit connected and automated vehicles (CAVs) to operate on public roads without a safety driver. With the recent announcement that Waymo has obtained approval to test driverless CAVs in a handful of Northern California communities, the state joins Arizona on the leading edge of the driverless vehicle revolution. Similar to the Arizona experiment, which I wrote about recently, California has positioned itself to play a key role in shaping the speed and direction of growth in the CAV industry.

California’s regulatory apparatus, while not without its critics, will provide an interesting contrast to the relatively lax system enacted by Arizona. The remainder of this post will explore the key differences between these two approaches to governance of CAVs.

Arizona requires merely that CAV operators submit written confirmation to the State that each vehicle complies with all relevant federal law, that it is capable of reaching a “minimal risk condition” when necessary, and that it be capable of complying with traffic and safety laws. California, by contrast, has a handful of more specific requirements. In addition to the need to comply with federal law, California requires that driverless CAV operators:

  • Notify local authorities in communities where testing will take place
  • Submit a law enforcement interaction plan
  • Certify that the vehicles meet the autonomous vehicle Level 4 or 5 definition of the Society for Automotive Engineers
  • Maintain a communication link between the vehicle and a remote operator
  • Inform the DMV of the intended operational design domain
  • Submit an annual disengagement report to the DMV
  • Submit collision reports to the DMV within 10 days of a crash

In addition to these requirements for driverless vehicle testing, California has a further set of requirements before driverless CAVs can be certified for public use. This supplemental set of requirements generally revolves around data recording and security against cyber-attacks.

Critics have argued that even California’s approach to CAVs is not safety conscious enough. Consumer Watchdog, a California public interest group, has raised an alarm that the state is merely taking Waymo’s word that it has met requirements “without any real verification.” The organization has also suggested that California’s regulations are not substantively strict enough, arguing that they are turning people “into human guinea pigs for testing [Waymo’s] robot cars.” Proponents though, argue that the safety concerns are overblown in light of the potential for vast improvements relative to error-prone human drivers.

While the debate over how much regulation is proper persists, it is notable how quickly California seems to be following in the footsteps of Arizona in the rollout of CAVs. One key argument in favor of Arizona’s light touch regulation is that it has positioned the state to take the lead in development of this new technology. California’s oversight, while not enough for some, is undoubtedly more rigorous than that of its neighbor to the east. Arizona’s approach does appear to have given the state a short head start in the CAV race. California’s progress, though, indicates that modest increases in state oversight may not present a substantial barrier to the adoption of this new technology.

By the end of this year, Alphabet subsidiary Waymo plans to launch one of the nation’s first commercial driverless taxi services in Phoenix, Arizona. As preparations move forward, there has been increasing attention focused on Arizona’s regulatory scheme regarding connected and automated vehicles (CAVs), and the ongoing debate over whether and how their deployment should be more tightly controlled.

In 2015, Arizona Governor Doug Ducey issued an executive order directing state agencies to “undertake any steps necessary to support the testing and operation of self-driving vehicles” on public roads in the state. The order helped facilitate the Phoenix metro area’s development as a key testing ground for CAV technology and laid the groundwork for Waymo’s pioneering move to roll out its driverless service commercially in the state. It has also been the target of criticism for not focusing enough on auto safety, particularly in the aftermath of a deadly crash involving an Uber-operated CAV in March.

As the technology advances and the date of Waymo’s commercial rollout approaches, Governor Ducey has issued a new executive order laying out a few more requirements that CAVs must comply with in order to operate on Arizona’s streets. While the new order is still designed to facilitate the proliferation of CAVs, it includes new requirements that CAV owners affirm that the vehicles meet all relevant federal standards, and that they are capable of reaching a “minimal risk condition” if the autonomous system fails.

Along with these basic safety precautions, the order also directs the Arizona Departments of Public Safety and Transportation to issue a protocol for law enforcement interaction with CAVs. This protocol is a public document intended both to guide officers in interactions with CAVs and to facilitate owners in designing their cars to handle those interactions. The protocol, issued by the state Department of Transportation in May, requires CAV operators to file an interaction protocol with the Department explaining how the vehicle will operate during emergencies and in interactions with law enforcement. As CAVs proliferate, a uniform standard for police interactions across the industry may become necessary for purposes of administrative efficiency. If and when that occurs, the initial standard set by Waymo in Arizona is likely to bear an outsized influence on the nationwide industry.

Critics have called the new executive order’s modest increase in safety requirements too little for such an unknown and potentially dangerous technology. Even among critics however, there is no agreement as to how exactly CAVs should be regulated. Many have argued for, at minimum, more transparency from the CAV companies regarding their own safety and testing procedures. On the other hand, advocates of Arizona’s relaxed regulatory strategy suggest that public unease with CAVs, along with the national news coverage of each accident, will be enough to push companies to adopt their own stringent testing and safety procedures.

This more hands-off regulatory approach will get its first close-up over the next few months in Arizona. The results are likely to shape the speed and direction of growth in the industry for years to come.

 

For many people, syncing their phone to their car is a convenience – allowing them to make hands-free calls or connect to media on their phone through the car’s infotainment system. But doing so can leave a lot of data on the car’s hardware, even after a user believes they have deleted such data. That was the case in a recent ATF investigation into narcotics and firearms trafficking, where federal law enforcement agents were issued a warrant to search a car’s computer for passwords, voice profiles, contacts, call logs, and GPS locations, all of which they believed had been left on the car’s on-board memory. While it’s uncertain just what was recovered, an executed search warrant found by Forbes claims the information extraction was successful.

While this case doesn’t necessarily raise the same issues of government access to data found in the Supreme Court’s recent Carpenter decision, it does illustrate the growing amount of personal data available to outside actors via the computer systems within our vehicles. And while the 4th Amendment can (usually) shield individuals from overreach by government, personal data represents a potential target for malicious actors, as shown by the recent data breach at Facebook which exposed the data of 30 million users. As cars become yet another part of the greater “internet of things,” (IoT) automakers have to confront issues of data protection and privacy. Security researchers have already began to prod vehicle systems for weaknesses – one group was able to breach the computer of a Mazda in 10 seconds.

There has of late been a great deal of talk, and some action, in Washington, Brussels, and Sacramento, towards mandating greater privacy and security standards. Earlier this month, the Senate Commerce Committee held a hearing on Data Privacy in the wake of the European Union’s General Data Protection Regulation, which took effect in May, and California’s Consumer Privacy Act, which was passed in June. Last month, California also passed a bill that sets cybersecurity standards for IoT devices – and there are similar bills that have been introduced in the House and Senate. While it remains to be seen if either of those bills gain traction, it is clear that there is an interest in more significant privacy legislation at the state and federal level, an interest that has to be considered by automakers and other CAV developers as CAVs move closer and closer to wide-scale deployment.

This fall, the University of Michigan Law School is offering its third Problem Solving Initiative (“PSI”) course concerning connected and automated vehicles. The first class, offered in the Winter 2017 semester, involved a team of fifteen graduate students from law, business, engineering, and public policy who accepted the challenge of coming up with commercial use cases for data generated by connected vehicles using dedicated short-range communication (“DSRC”) technology.

In the Fall of 2017, we offered our second PSI Course in CAV—this one to 23 graduate students. That course focused on the problem of Level 3 autonomy, as defined by the Society of Automotive Engineers (“SAE”). Level 3 autonomy, or conditional automation, is defined as a vehicle driving itself in a defined operational design domain (“ODD”), with a human driver always on standby to take over the vehicle upon short notice when the vehicle exits the ODD. As with the first course, our student teams spent the semester collecting information from industry, governmental, and academic experts and proposing a series of innovative solutions to various obstacles to the deployment of Level 3 systems.

This semester, our PSI course is entitled Connected and Automated Vehicles: Preparing for a Mixed Fleet Future. I will be co-teaching the course with Anuj Pradhan and Bryant Walker Smith. Our focus will be on the multiple potential problems created by unavoidable future interactions between automated vehicles and other road users, such as non-automated, human-driven vehicles, pedestrians, and bicyclists.

Although cars can be programmed to follow rules of the road, at its core, driving and roadway use are social activities. Roadway users rely heavily on social cues, expectations, and understandings to navigate shared transportation infrastructure. For example, although traffic circles are in principle governed by a simple rule of priority to vehicles already in the circle, their actual navigation tends to governed by a complex set of social interactions involving perceptions of the intentions, speed, and aggressivity of other vehicles. Similarly, while most states require bicyclists to obey stop signs and traffic lights, most cyclists do not; prudent drivers should not expect them to.

Can cars be programmed to behave “socially?” Should they be, or is the advent of robotic driving an opportunity to shift norms and expectations toward a greater degree of adherence to roadway rules? Will programming vehicles to be strictly rule compliant make CAVs “roadway wimps,” always giving in to more aggressive roadway users? Would that kill the acceptance of CAVs from a business perspective? Is reform legislation required to permit CAVs to mimic human drivers?

More generally, is the advent of CAVs an opportunity to reshape the way that all roadway users access roadways? For example, could the introduction of automated vehicles be an opportunity to reduce urban speeds? Or to prohibit larger private vehicles from some streets (since people may no longer be dependent only on their individually owned car)? These questions are simply illustrative of the sorts of problems our class may choose to tackle. Working in interdisciplinary groups, our graduate students will attempt to identify and solve the key legal, regulatory, technological, business, and social problems created by the interaction between CAVs and other roadway users.

As always, our class will rely heavily on on the expertise of folks from government, industry, and academia. We welcome any suggestions for topics we should consider or experts who might provide important insights as our students begin their discovery process next week.

Cite as: Daniel A. Crane, The Future of Law and Mobility, 2018 J. L. & Mob. 1.

Introduction

With the launch of the new Journal of Law and Mobility, the University of Michigan is recognizing the transformative impact of new transportation and mobility technologies, from cars, to trucks, to pedestrians, to drones. The coming transition towards intelligent, automated, and connected mobility systems will transform not only the way people and goods move about, but also the way human safety, privacy, and security are protected, cities are organized, machines and people are connected, and the public and private spheres are defined.

Law will be at the center of these transformations, as it always is. There has already been a good deal of thinking about the ways that law must adapt to make connected and automated mobility feasible in areas like tort liability, insurance, federal preemption, and data privacy. 103 103. See, e.g., Daniel A. Crane, Kyle D. Logue & Bryce Pilz, A Survey of Legal Issues Arising from the Deployment of Autonomous and Connected Vehicles, 23 Mich. Tel. & Tech. L. Rev. 191 (2017). × But it is also not too early to begin pondering the many implications for law and regulation arising from the technology’s spillover effects as it begins to permeate society. For better or worse, connected and automated mobility will disrupt legal practices and concepts in a variety of ways additional to the obvious “regulation of the car.” Policing practices and Fourth Amendment law, now so heavily centered on routine automobile stops, will of necessity require reconsideration. Notions of ownership of physical property (i.e., an automobile) and data (i.e., accident records) will be challenged by the automated sharing economy. And the economic and regulatory structure of the transportation network will have to be reconsidered as mobility transitions from a largely individualistic model of drivers in their own cars pursuing their own ends within the confines of general rules of the road to a model in which shared and interconnected vehicles make collective decisions to optimize the system’s performance. In these and many other ways, the coming mobility revolution will challenge existing legal concepts and practices with implications far beyond the “cool new gadget of driverless cars.”

Despite the great importance of the coming mobility revolution, the case for a field of study in “law and mobility” is not obvious. In this inaugural essay for the Journal of Law and Mobility, I shall endeavor briefly to make that case.

I. Driverless Cars and the Law of the Horse

A technological phenomenon can be tremendously important to society without necessarily meriting its own field of legal study because of what Judge Frank Easterbrook has described as “the law of the horse” problem. 104 104. Frank H.Easterbrook,Cyberspace and the Law of the Horse, 1996 U. Chi. Legal F. 207, 207-16. × Writing against the burgeoning field of “Internet law” in the early 1990s, Easterbrook argued against organizing legal analysis around particular technologies:

The best way to learn the law applicable to specialized endeavors is to study general rules. Lots of cases deal with sales of horses; others deal with people kicked by horses; still more deal with the licensing and racing of horses, or with the care veterinarians give to horses, or with prizes at horse shows. Any effort to collect these strands into a course on “The Law of the Horse” is doomed to be shallow and to miss unifying principles. 105 105. Id. ×

Prominent advocates of “Internet law” as a field rebutted Easterbrook’s concern, arguing that focusing on cyberlaw as a field could be productive to understanding aspects of this important human endeavor in ways that merely studying general principles might miss. 106 106. Lawrence Lessig, The Law of the Horse: What Cyberlaw Might Teach, 113 Harv. L. Rev. 501 (1999). × Despite Easterbrook’s protestation, a distinct field of cyberlaw has grown up in recent decades.

“The law of the horse” debate seems particularly apt to the question of law and mobility since the automobile is the lineal successor of the horse as society’s key transportation technology. Without attempting to offer a general solution to the “law of the horse” question, it is worth drawing a distinction between two different kinds of disruptive technologies—those in which the technological change produces social changes indirectly and without significant possibilities for legal intervention, and those in which law is central to the formation of the technology itself.

An example of the first species of technological change is air conditioning. The rise of air conditioning in the mid-twentieth century had tremendous effects on society, including dramatic increases in business productivity, changes in living patterns as people shifted indoors, and the extension of retail store hours and hence the growing commercialization of American culture. 107 107. Stan Cox, Losing Our Cool: Uncomfortable Truths About Our Air-Conditioned World (and Finding New Ways to Get Through the Summer) (2012). × The South’s share of U.S. population was in steady decline until the 1960s when, in lockstep with the growth of air conditioning and people’s willingness to settle in hot places, the trend abruptly reversed and the South’s share grew dramatically. 108 108. Paul Krugman, Air Conditioning and the Rise of the South, New York Times March 28, 2015. × The political consequences were enormous—from Richard Nixon through George W. Bush, every elected President hailed from warm climates.

One could say, without exaggeration, that the Willis Carrier’s frigid contraption exerted a greater effect on American business, culture, and politics than almost any other invention in the twentieth century. And, yet, it would seem silly to launch a field of study in “law and air conditioning.” Air conditioning’s social, economic, and political effects were largely indirect—the result of human decisions in response to the new circumstances created by the new technology rather than an immediate consequence of the technology itself. Even if regulators had foreseen the dramatic demographic effects of air conditioning’s spread, there is little they could have done (short of killing or limiting the technology) to mediate the process of change by regulating the technology.

Contrast the Internet. Like air conditioning, the Internet has had tremendous implications for culture, business, and politics, but unlike air conditioning, many of these effects were artifacts of design decisions regarding the legal architecture of cyberspace. From questions of taxation of online commercial transactions, 109 109. See, e.g., John E. Sununu, The Taxation of Internet Commerce, 39 Harv. J. Leg. 325 (2002). × to circumvention of digital rights management technologies, 110 110. See, e.g., David Nimmer, A Rif on Fair Use in the Digital Millenium Copyright Act, 148 U. Pa. L. Rev. 673 (2000). × to personal jurisdiction over geographically remote online interlocutors, 111 111. Note, No Bad Puns: A Different Approach to the Problem of Personal Jurisdiction and the Internet, 116 Harv. L. Rev. 1821 (2003). × and in countless other ways, a complex of legal and regulatory decisions created the modern Internet. From the beginning, law was hovering over the face of cyberspace. Al Gore may not have created the Internet, but lawyers had as much to do with it as did engineers.

The Internet’s legal architecture was not established at a single point in time, by a single set of actors, or with a single set of ideological commitments or policy considerations. Copyright structures were born of the contestation among one set of stakeholders, which was distinct from the sets of stakeholders contesting over tax policy, net neutrality, or revenge porn. And yet, the decisions made in separate regulatory spheres often interact in underappreciated ways to lend the Internet its social and economic character. Tax policy made Amazon dominant in retail, copyright policy made Google dominant in search, and data protection law (or its absence) made Facebook dominant in social media—with the result that all three have become antitrust problems.

Whether or not law students should be encouraged to study “Internet law” in a discrete course, it seems evident with the benefit of thirty years of hindsight that the role of law in mediating cyberspace cannot be adequately comprehended without a systemic inquiry. Mobility, I would argue, will be much the same. While the individual components of the coming shift toward connectivity and automation—i.e., insurance, tort liability, indemnification, intellectual property, federal preemption, municipal traffic law, etc.—will have analogues in known circumstances and hence will benefit from consideration as general questions of insurance, torts, and so forth, the interaction of the many moving parts will produce a novel, complex ecosystem. Given the potential of that ecosystem to transform human life in many significant ways, it is well worth investing some effort in studying “law and mobility” as a comprehensive field.

II. An Illustration from Three Connected Topics

It would be foolish to attempt a description of mobility’s future legal architecture at this early stage in the mobility revolution. However, in an effort to provide some further motivation for the field of “law and mobility,” let me offer an illustration from three areas in which legal practices and doctrines may be affected in complex ways by the shift toward connected and automated vehicles. Although these three topics entail consideration of separate fields of law, the technological and legal decisions made with respect to them could well have system-wide implications, which shows the value of keeping the entire system in perspective as discrete problems are addressed.

A. Policing and Public Security

For better or for worse, the advent of automated vehicles will redefine the way that policing and law enforcement are conducted. Routine traffic stops are fraught, but potentially strategically significant, moments for police-citizen interactions. Half of all citizen-police interactions, 112 112. Samuel Walker, Science and Politics in Police Research: Reflections on their Tangled Relationship, 593 Annals Am. Acad. Pol. & Soc. Sci. 137, 142 (2004); ATTHEW R. DUROSE ET. AL., U.S. DEP’T OF JUSTICE, OFFICE OF JUSTICE PROGRAMS, BUREAU OF JUSTICE STATISTICS, CONTACTS BETWEEN POLICE AND THE PUBLIC, 2005, 1 (2007). × more than forty percent of all drug arrests, 113 113. David A. Sklansky,Traffic Stops, Minority Motorists, and the Future of the Fourth Amendment, 1997SUP. CT. REV. 271, 299. × and over 30% of police shootings 114 114. Adams v. Williams, 407 U.S. 143, 148 n.3 (1972). × occur in the context of traffic stops. Much of the social tension over racial profiling and enforcement inequality has arisen in the context of police practices with respect to minority motorists. 115 115. Ronnie A. Dunn, Racial Profiling: A Persistent Civil Rights Challenge Even in the Twenty-First Century, 66 Case W. Res. L. Rev. 957, 979 (2016) (reporting statistics on disproportionate effects on racial minorities of routine traffic stops). × The traffic stop is central to modern policing, including both its successes and pathologies.

Will there continue to be routine police stops in a world of automated vehicles? Surely traffic stops will not disappear altogether, since driverless cars may still have broken taillights or lapsed registrations. 116 116. See John Frank Weaver, Robot, Do You Know Why I Stopped You?. × But with the advent of cars programmed to follow the rules of the road, the number of occasions for the police to stop cars will decline significantly. As a general matter, the police need probable cause to stop a vehicle on a roadway. 117 117. Whren v. U.S., 517 U.S. 806 (1996). × A world of predominantly automated vehicles will mean many fewer traffic violations and hence many fewer police stops and many fewer police-citizen interactions and arrests for evidence of crime discovered during those stops.

On the positive side, that could mean a significant reduction in some of the abuses and racial tensions around policing. But it could also deprive the police of a crime detection dragnet, with the consequence either that the crime rate will increase due to the lower detection rate or that the police will deploy new crime detection strategies that could create new problems of their own.

Addressing these potentially sweeping changes to the practices of policing brought about by automated vehicle technologies requires considering both the structure of the relevant technology and the law itself. On the technological side, connected and automated vehicles could be designed for easy monitoring and controlling by the police. That could entail a decline in privacy for vehicle occupants, but also potentially reduce the need for physical stops by the police (cars that can be remotely monitored can be remotely ticketed) and hence some of the police-citizen roadside friction that has dominated recent troubles.

On the legal side, the advent of connected and automated vehicles will require rethinking the structure of Fourth Amendment law as required to automobiles. At present, individual rights as against searches and seizures often rely on distinctions between drivers and passengers, or owners and occupants. For example, a passenger in a car may challenge the legality of the police stop of a car, 118 118. Brendlin v. California, 551 U.S. 249 (2007). × but have diminished expectations of privacy in the search of the vehicle’s interior if they are not the vehicle’s owners or bailees. 119 119. U.S. v. Jones, 565 U.S. 400 (2012). × In a mobility fleet without drivers and (as discussed momentarily) perhaps without many individual owners, these conceptions of the relationship of people to cars will require reconsideration.

B. Ownership, Sharing, and the Public/Private Divide

In American culture, the individually owned automobile has historically been far more than a transportation device—it has been an icon of freedom, mobility, and personal identity. As Ted McAllister has written concerning the growth of automobile culture in the early twentieth century:

The automobile squared perfectly with a distinctive American ideal of freedom—freedom of mobility. Always a restless nation, with complex migratory patterns throughout the 17th, 18th, and 19thcenturies, the car came just as a certain kind of mobility had reached an end with the closing of the frontier. But the restlessness had not ended, and the car allowed control of space like no other form of transportation. 120 120. Ted v. McAllister, Cars, Individualism, and the Paradox of Freedom in a Mass Society. ×

Individual car ownership has long been central to conceptions of property and economic status. The average American adult currently spends about ten percent of his or her income on an automobile, 121 121. Máté Petrány, This Is How Much Americans Spend on their Cars. × making it by far his or her most expensive item of personal property. The social costs of individual automobile ownership are far higher. 122 122. Edward Humes, The Absurd Primacy of the Automobile in American Life; Robert Moor, What Happens to the American Myth When You Take the Driver Out of It?. ×

The automobile’s run as an icon of social status through ownership may be ending. Futurists expect that the availability of on-demand automated vehicle service will complete the transition from mobility as personal property to mobility as a service, as more and more households stop buying cars and rely instead on ride sharing services. 123 123. Smart Cities and the Vehicle Ownership Shift. × Ride sharing companies like Uber and Lyft have long been on this case, and now automobile manufacturers are scrambling to market their vehicles as shared services. 124 124. Ryan Felton, GM Aims to Get Ahead of Everyone with Autonomous Ride-Sharing Service in Multiple Cities by 2019. × With the decline of individual ownership, what will happen to conceptions of property in the physical space of the automobile, in the contractual right to use a particular car or fleet of automobiles, and in the data generated about occupants and vehicles?

The coming transition from individual ownership to shared service will also raise important questions about the line between the public and private domains. At present, the “public sphere” is defined by mass transit whereas the individually owned automobile constitutes the “private sphere.” The public sphere operates according to ancient common carrier rules of universal access and non-discrimination, whereas a car is not quite “a man’s castle on wheels” for constitutional purposes, 125 125. See Illinois v. Lidster, 540 U.S. 419, 424 (2004) (“The Fourth Amendment does not treat a motorist’scaras hiscastle.”). × but still a non-public space dominated by individual rights as against the state rather than public obligations. 126 126. E.g., Byrne v. Rutledge, 623 F.3d 46 (2d Cir. 2010) (holding the motor vehicle license plates were nonpublic fora and that state’s ban on vanity plates referencing religious topic violated First Amendment). × As more and more vehicles are held and used in shared fleets rather than individual hands, the traditional line between publicly minded “mass transit” and individually minded vehicle ownership will come under pressure, with significant consequences for both efficiency and equality.

C. Platform Mobility, Competition, and Regulation

The coming transition toward ride sharing fleets rather than individual vehicle ownership described in the previous section will have additional important implications for the economic structure of mobility—which of course will raise important regulatory questions as well. At present, the private transportation system is highly atomistic. In the United States alone, there are 264 million individually owned motor vehicles in operation. 127 127. U.S. Dep’t of Energy, Transportation Energy Data Book, Chapter 8, Household Vehicles and Characteristics, Table 8.1, Population and Vehicle Profile, https://cta.ornl.gov/data/chapter8.shtml (last visited May 29, 2018). × For the reasons previously identified, expect many of these vehicles to shift toward corporate-owned fleets in coming years. The question then will be how many such fleets will operate—whether we will see robust fleet-to-fleet competition or instead the convergence toward a few dominant providers as we are seeing in other important areas of the “platform economy.”

There is every reason to believe that, before too long, mobility will tend in the direction of other monopoly or oligopoly platforms because it will share their economic structure. The key economic facts behind the rise of dominant platforms like Amazon, Twitter, Google, Facebook, Microsoft, and Apple are the presence of scale economies and network effects—system attributes that make the system more desirable for others users as new users join. 128 128. See generally DavidS.Evans& Richard Schmalensee, A Guide to the Antitrust Economics of Networks, Antitrust, Spring 1996, at 36; Michael L. Katz & Carl Shapiro, Systems Competition andNetworkEffects, 8 J. Econ. Persp. 93 (1994). × In the case of the mobility revolution, a number of features are suggestive of future scale economies and network effects. The more cars in a fleet, the more likely it is that one will be available when summoned by a user. The more cars connected to other cars in a fleet, the higher the quality of the information (on such topics as road and weather conditions and vehicle performance) available within the fleet and the steeper the machine learning curve.

As is true with other platforms, the mere presence of scale economic and network effects does not have to lead inexorably to market concentration or monopoly. Law and regulation may intervene to mitigate these effects, for example by requiring information sharing or interconnection among rival platforms. But such mandatory information sharing or interconnection obligations are not always advisable, as they can diminish a platform’s incentives to invest in its own infrastructure or otherwise impair incentives to compete.

Circling back to the “law of the horse” point raised at the outset, these issues are not, of course, unique to law and mobility. But this brief examination of these three topics—policing, ownership, and competition—shows the value of considering law and mobility as a distinct topic. Technological, legal, and regulatory decisions we make with respect to one particular set of problems will have implications for distinct problems perhaps not under consideration at that moment. For example, law and technology will operate conjunctively to define the bounds of privacy expectations in connected and automated vehicles, with implications for search and seizure law, property and data privacy norms, and sharing obligations to promote competition. Pulling a “privacy lever” in one context—say to safeguard against excessive police searches—could have spillover effects in another context, for example by bolstering a dominant mobility platform’s arguments against mandatory data sharing. Although the interactions between the different technological decisions and related legal norms are surely impossible to predict or manage with exactitude, consideration of law and mobility as a system will permit a holistic view of this complex, evolving ecosystem.

Conclusion

Law and regulation will be at the center of the coming mobility revolution. Many of the patterns we will observe at the intersection of law and the new technologies will be familiar—at least if we spend the time to study past technological revolutions—and general principles will be sufficient to answer many of the rising questions. At the same time, there is a benefit to considering the field of law and mobility comprehensively with an eye to understanding the often subtle interactions between discrete technological and legal decisions. The Journal of Law and Mobility aims to play an important role in this fast-moving space.


Frederick Paul Furth, Sr. Professor of Law, University of Michigan. I am grateful for helpful comments from Ellen Partridge and Bryant Walker Smith. All errors are my own.