New Rules for Self-Driving Cars Aim to Fix What Ain't Broke

New Rules for Self-Driving Cars Aim to Fix What Ain't Broke

The folks at the National Highway Transportation Safety Administration (NHTSA) are a lot like other regulators: When they see that a given power exists, they covet it.

Charged with developing standards for self-driving cars, NHTSA this week published a set of nonbinding guidelines for the embryonic industry that, to be fair, are mostly commendable as an exercise in regulatory restraint. But buried in the 116-page proposal are ideas that, if enacted, would require a massive expansion in the role the federal government plays in the development of new automotive technologies.

Luckily, for this authority to be realized, Congress would need to grant its approval. If we’re fortunate, Congress will do no such thing.

Tagged with the seemingly inoffensive moniker of “pre-market approval,” the NHTSA pitch would grant the agency a regulatory veto over almost any new self-driving technology. The impact would be enormous, subjecting innovators to unprecedented and unnecessary scrutiny, in addition to a drawn-out process of regulatory delays.

The guidelines contemplate two different paths to grant the agency pre-market approval authority. Under the first, NHTSA could prohibit a manufacturer from introducing any highly automated vehicle without first obtaining federal approval. Under this system, any new technology would be presumed forbidden unless or until granted express permission. Moreover, the guidelines note that this system would require a “large increase in agency resources.”

The second path is at least somewhat more reasonable. It proposes a system of “hybrid certification,” under which the federal government would grant an initial blessing to technologies that would be self-certified later by vehicle manufacturers. While less invasive, this idea still fails to overcome the basic problem of forcing delays in a fast-moving new industry in which virtually all meaningful advancements will be novel. The big danger is that such delays could lead to the rise and deployment of inferior technology, simply by virtue of happenstance.

For those lawmakers who embrace free markets and limited government, opposing both visions of pre-market approval is a no-brainer. Adding red tape to the process by which vehicles are brought to market will only increase consumer costs and chill development of these exciting technologies.

For other lawmakers, including those concerned about the readiness of autonomous-vehicle technology, the proposals might be more difficult to dismiss. NHTSA’s case for pre-market approval authority is modeled on other federal bodies that currently wield similar authority. In particular, the agency cites the Federal Aviation Administration, which uses pre-market approval in its evaluation of autopilot and other aviation systems.

Whether the FAA’s system, itself, is ideal is a separate question and worthy of exploration. What’s more pressing is to make clear that there is no good reason for NHTSA to abandon its current system of self-certification. Under that system, the agency uses a risk-based selection process to test a sample of vehicles and standards. Though imperfect, this approach has been proven to strike an effective balance between consumer protection and market flexibility.

Similar to how insurance companies evaluate risk, the self-certification system balances the potential severity of a hazard with how often it is expected to be a problem. On that basis, NHTSA targets the products of greatest concern. And, by its own admission, NHTSA notes that, historically, “instances of non-compliance, especially non-compliance having substantial safety implications, are rare” under its current approach. Unless NHTSA can demonstrate that highly automated vehicles require a substantially more onerous method of scrutiny, there’s simply no reason to move away from a system that, since passage of the National Traffic and Motor Vehicle Safety Act in 1966, has proven an effective regulatory tool.

Based on a recent op-ed by President Obama published in the Pittsburgh Post-Gazette, there is every reason to believe that the administration will attempt to make the case for granting NHTSA a more robust role in vetting future technologies. Lawmakers of all persuasions would do well to regard such proposals with extreme skepticism.

Ian Adams is an attorney in California and senior fellow of the R Street Institute.

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