Liability & Autonomous Vehicles James Kuhr, Esq. Acknowledgements: TxDOT, D-STOP, NCTCOG

Definitions NHTSA – National Highway Transportation Safety Administration, they are the federal regulating body for autonomous vehicles Autonomous – A vehicle that can operate, in some manner, without constant direction from the driver Connected – A vehicle that can communicate with other vehicles and infrastructure Ridesourcing – the new name for Ridesharing

Levels of Autonomy Increase in Roadway Safety Increase in Safety Effects Level 1 Increase in Roadway Safety Adaptive Cruise Control Adaptive Cruise Control + Lane Assist Level 2 Open Road Automated Vehicle Level 3 Increase in Network Effects Generally Hands Off Driving Level 4 Level 5

Market Shares 20% 2016 2021 16% 13% 2020 12% 9% 7% 2018 2030 3% 2% US Market Share Level 2 Level 3 Level 4 20% 2016 2021 16% 13% 2020 12% 9% 7% 2018 2030 3% 2% 2017 2018 (ride sourcing) Others: Level 2 Level 3 Level 4 2016 2025 2021 2030 2017 2018 2020

Fastest Case In 2015, just over 90 million light passenger and commercial vehicles were produced in the world. Currently, there are over 1.2 billion vehicles in use in the world. On the roughest possible level: at current production rates, if every vehicle going forward was autonomous, it would still be 13 years before all the existing vehicles on the road could be replaced. Vehicle Production Rates Technology Introduction Timelines Consultants Behavioral Models Assumption: Current Production capabilities provide a most-aggressive bound

Previous Adoption Insights Victoria Transport Policy Institute (VTPI) Vehicle Production Rates Technology Introduction Timelines Consultants Behavioral Models

Consultant Predictions Vehicle Production Rates Technology Introduction Timelines Consultants Behavioral Models

Behavior Based Predictions Typically Based on Surveys ● Consider likelihood of adoption based on various factors ● Some distinguish between ownership and use of shared fleet Vehicle Production Rates Technology Introduction Timelines Consultants Behavioral Models 2100 individuals in the US Bansal and Kockelman 2100 people surveyed across America Model was influenced by factors such as price decreases and willingness to pay, new regulation, and ignoring ridesharing Does not consider ridesharing Highly uncertain result, ranging from a conservative case of 25% penetration to an optimistic case of 87% percent penetration by 2045. Zmud, Sener, Wagner 556 residents of Austin surveyed Ridesharing generally not considered Rejectors top 3 concerns: Lack of trust in the technology (41%) Safety (24%) Cost Concerns (22%) Found a correlation between those who value privacy and those who lack interest in AVs.

Concerns about AVs Survey with 1800 individuals in the Puget sound Region: Type of concern Not concerned Somewhat unconcerned Neutral/doesn’t know Somewhat concerned Very concerned Equipment and system safety 6.9% 4.4% 22.2% 26.9% 39.6% System and vehicle security 8.4% 5.0% 26.2% 26.8% 33.7% Capability to react to the environment 6.2% 3.2% 18.9% 22.8% 48.9% Performance in poor weather or other unexpected conditions 6.3% 4.3% 21.5% 26.5% 41.4% Legal liability for drivers or owners 6.4% 4.2% 24.3% 27.4% 37.7% 556 Austin residents Attitude towards CAV (Zmud et al.)

Did you know? According to NHTSA, In 2010, motor vehicle crashes cost $836 Billion dollars, 1/3 of that direct costs: ($23 Billon in medical, $28 Billion in congestion, $76 Billion in property damage, $77 billion in lost productivity $37 Billion additional economic cost) 2/3 of that value of life of the people in the accidents All New 2018 Vehicles Must Have A Back-Up Camera Roughly 200 people are killed each year and another 14,000 are injured in so-called backover accidents, when drivers reverse over another person without noticing him or her. 20 Automakers (99% of the US market) have agreed to make automatic braking standard by 2022 IIHS estimates that automated braking at full penetration would have prevented 700,000 crashes in 2013 (13% of all crashes) “The data show that the Tesla vehicles crash rate dropped by almost 40 percent after Autosteer installation.” – NHTSA Report Tesla expects a 90% drop with Autopilot 2 Tesla is selling insurance in Australia and Hong Kong

Already Happening: Safety IIHS: 2010-14 study on FCW systems on the road: For 383,868 cars, there were only 1277 actual rear end crashes vs 1872 projected Extrapolating: that would be ~390,000 less crashes with full fleet penetration

Dedicated Short Range Communications (DSRC)

FHWA ITS JPO Prediction V2X Safety Benefits Benefits Through use of just V2V BSM to warn drivers, with a mature system, NHTSA studies indicate that up to 79% of unimpaired crashes could be avoided. Using just a V2I communication system, NHTSA estimates that 26% of unimpaired crashes could be avoided. Through use of just V2V BSM to warn drivers, with a mature system, NHTSA studies indicate that up to 79% of unimpaired crashes could be avoided. Using just a V2I communication system, NHTSA estimates that 26% of unimpaired crashes could be avoided. Together, NHTSA studies indicate that 81% of all unimpaired crashes could be avoided with a fully mature V2V and V2I system. FHWA ITS JPO Prediction By 2029, seven years after the projected phase-in of the light vehicle V2V rule, 60% of all vehicles, or a cumulative 146 million cars, will have DSRC/V2X equipment. Adoption of aftermarket/consumer electronics DSRC devices will outpace factory installed DSRC within five to six years after a NHTSA Light Vehicle V2V rule requiring 100% of all new vehicles to be equipped with V2V. https://ntl.bts.gov/lib/60000/60500/60535/FHWA-JPO-17-487_Final_.pdf

Connected Vehicle Adoption Curve it is worth noting that in case of no regulations, even at 10% annual drop in technology prices and no-zero, but constant [Willingness To Pay]…83.5% [of vehicles] would have connectivity in 2045 – Bansal & Kockleman

Disruptor: X - sharing Van Sharing Car Sharing Carpooling

A Few Words About Liability Mercedes, Volvo and Google have all said they will accept liability when their autonomous vehicles are at fault Liability is generally decided by the courts. Legislatures let the doctrine of negligence (what party didn’t meet their responsibility) to establish common law guidelines. This is probably how liability will be established for AVs. In house bill 3475, filed in the Texas Legislature last week, liability is only explicitly shifted away from the auto manufacturer if someone modifies their autonomous system. Overall, due to wrecks, there is a burden of liability, some of it due to human error and some of it due to product failure. In the future, this will change, where most of the liability will be due to product failure, but the overall amount of liability will go down and the cost to society will be reduced, which might allow for insurance to become a communal thing. GM is rumored to be ready to deploy thousands of autonomous bolts (electric vehicles) in 2018, but only through ridesharing (Lyft), and they have said they will not sell autonomous vehicles to the public Reinsurance will be needed for catastrophes!