As of late last year Google’s driverless test cars have driven 300,000 miles with only two accidents.  That itself would be impressive, but one of those two accidents occurred when the car was being driven by a human driver and the other was when it was rear-ended by, of course, a human-driven car.  This, perhaps, should not be surprising given the fact that human error accounts for 90% of road accidents.

The cost of the human error is real.  A 2008 report estimated the yearly cost of car accidents to be over $150 billion in the U.S.  Traffic congestion alone is responsible for another $100 billion in costs.  Air pollution resulting from cars stuck in congestion is estimated to claim the lives of over 2000 people a year and cost almost $20 billion.

Driverless cars promise to solve these problems.  The technology behind driverless cars is real and present.  Nonetheless, only three states allow for driverless cars, and none allow for cars to be automated without a driver sitting and observing behind the controls (removing the main benefit of paying for a driverless car for the driver).  Why is this so?

A primary factor driving the slow adoption of this technology is concern over liability.  As many recent articles have noted, there is great uncertainty in legislatures and industry over how to divide responsibility when something inevitably goes wrong.  The lack of clear answers has precluded the adoption of rules and regulations allowing for companies to proceed with the testing and, eventually, the marketing of this technology.

But not many are asking if these precautions are worth it.  Of course there is a benefit for having an established system of regulation and liability in place before these cars go on the street, but does it justify the costs of delaying implementation?

This is not the first time our country has faced similar issues.  Public health officials have long known that vaccinations, while hugely effective for the population, sometimes result in adverse reactions in a small minority of those receiving the vaccines.  As a result of lawsuits stemming from these adverse reactions, in the 1970s and 1980s drug companies stopped producing some vaccines because the market for them was not suitably profitable.  The resulting vaccine shortage resulted in a potential public health crisis and government officials responded by passing the National Childhood Vaccine Injury Act of 1986.  The law called for a mandatory no-fault claim procedure for all vaccine injury claims.  Similarly, in 1929 thirty-one nations came together to protect the fledgling aviation industry from liability-induced bankruptcy by passing what is now known as the Warsaw Convention.  This agreement granted predictable payouts for injuries and deaths resulting from air transport.  It should be noted that air travel is now the safest form of transportation.  In fact, it is safer to travel by air than to sit in one’s own home.

Driverless technology can be as transformative for our economy and our public health as were vaccines and air travel.  Standing between the technology and its implementation may be a similar federal law creating a standardized and predictable mechanism for liability.  This could pave the way for companies to advance the technology needed to ameliorate the crushing costs of human-driven autos on our country.

Matt Ginther

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3 Responses to The Future of Driverless Cars: Limiting Liability to Promote Public Health and Economic Growth

  1. Lizzie says:

    Very interesting. While I’m certain the insurance industry would be happy to have a source of revenue from product lines underwriting the liability for these vehicles, they’re unlikely to do so (or effectively do so in terms of coverage and premiums) until there is some clarity in the answers to these legal questions. It will be interesting to follow any upcoming studies conducted and any rules promulgated by NHTSA. With some federal direction, we may see a quicker market roll-out of the technology.

  2. Kendall Short says:

    What an interesting topic, Matt! I wonder if there might be some way to create a sort of test/safe zone where manufacturers like Google could build up greater evidence of their vehicles’ safety (though it seems like Google is off to an incredibly good start). Perhaps this might mean that in addition to a carpool lane there could also be a driverless-vehicle lane on highways so that those who wanted to could opt-in, thereby benefiting from the reduced congestion, while also limiting their exposure (both physically and legally) to those who aren’t yet ready for “I, Robot” come to life.

  3. Anonymous says:

    Matt – Great post and analysis. I also wonder how this will impact Google’s lobbying efforts to have the FCC free up more broadband as there will need to be a substantial uptick in available broadband for the amount of wireless service necessary for driverless cars to communicate with each other and truly become ubiquitous.