Setting the Right Course for Self-Driving Cars

We’re still just weeks into the Trump administration, but Transportation Secretary Elaine Chao has already signaled she will review a number of Obama administration policies related to developing, deploying, and regulating self-driving vehicles. To help assuage the concerns of a public still skeptical about our self-driving future, there are two big steps Chao and the National Highway Traffic Safety Administration (NHTSA) could take right away.

The first big question the NHTSA will face is what to do with the federal automated vehicle policy issued by the Obama administration last year. Though it needs some improvements, the guidance offered an ideal starting point for future conversations and addressed many of the issues in need of attention. One major plus was that the guidance isn’t binding. Given that the Trump administration has pledged to avoid tying industry up in knots with onerous regulation, that sort of flexibility is essential to granting manufacturers and developers the room to innovate.

Instead of starting from scratch, the NHTSA should consider looking at some of the problematic and vague aspects of the guidance. For instance, the administration could clarify that some of its proposed “new authorities” will not be pursued. In particular, it should repudiate any sort of “pre-market approval authority,” as well as the power to oversee “post-sale software updates.” Even the specter of these Obama-era proposals could have a chilling effect on development of self-driving technologies.

The NHTSA should otherwise seek to resolve ambiguity. For instance, while the guidance lays down sensible distinctions between state and federal authority, it also includes a “model state policy” that suggests states make certain safety standards mandatory, even though the guidance otherwise is otherwise non-binding. Addressing this issue is particularly crucial, because state legislatures across the country are unsure whether they should follow the guidance as written since it is unclear whether it will continue to exist at all.

Some state lawmakers are considering legislation to create the mandatory standards apparently required by the NHTSA. This would disrupt the balance between activities best left to the states, such as licensing, registration, liability, and insurance, and all safety-standard-related activities, which are best left to the federal government. Clarifying the states’ proper role would go a long way toward addressing many of the problems now popping up in state capitals.

The second big step for the NHTSA is to take advantage of the fact that members of the relevant committees in both the House and Senate are eager and willing to act to make self-driving technology a reality. The NHTSA should seize this moment to clarify its authority over all aspects of vehicle safety, thus avoiding an untenable patchwork of law and regulation throughout the country.

For example, California’s draft deployment regulations would create an entire framework for data collection, usage, and reporting that looks nothing like the proposal in Massachusetts. Were both sets of standards to take effect — along with a proliferation of others across the states — the result would be massive compliance costs. The hook for federal action is clear. States aren’t the proper authorities for regulating vehicle safety. The NHTSA would do the public a great service by working with Congress to clarify that fact.

In a related vein, the NHTSA should work immediately to raise the number of vehicles that manufacturers may test, so that arbitrary barriers do not needlessly drag out the crucial work necessary to ensure the safety of self-driving cars.

In the years to come, other issues will doubtless arise as the NHTSA seeks to establish well-balanced and sustainable oversight of self-driving vehicles. But Secretary Chao and the Trump administration can take these steps immediately to create the regulatory certainty needed for self-driving technologies to continue to race forward.

Ian Adams is a senior fellow with the R Street Institute, a free-market think-tank based in Washington, D.C. He is responsible for coordinating R Street’s insurance research and outreach, as well as overseeing matters related to next generation transportation.