by Alain L. Kornhauser, PhD Professor, Operations Research & Financial Engineering Director, Program in Transportation Faculty Chair, PAVE (P Autonomous Vehicle Engineering Princeton University Presented at Inaugural Automated Vehicle Fort Monmouth October 3, 2014 Opportunity to Create Well-paying Jobs, Save Lives, Injuries and Family Disruptions, and Make Money by Establishing a World-class Center for Research, Certification and Commercialization of Automated Vehicles (aka SmartDrivingCars)

Quality of Life 101: Important Elements Environment – Clean air, water, … Employment – “High Quality” Jobs – Correlated with Crime/Personal Safety Mobility – Safety, Efficiency, Equity, Comfort, Convenience, … Main Premise: – Facilitating the Adoption of Smart Driving Technology: Creates “High Quality” Jobs, Improves Personal Safety Improves Safety, Efficiency, Equity, Comfort, Convenience, … Improves the Environment All for FREE!

NOT: Future Vehicle Technologies

More Likely: Future Vehicle Technologies

More Likely: Future Vehicle Technologies gCars/Videos/Subaru%20EyeSight_Commercial 60secCrashTest.mp4 ght_Commercial60secCrashTest.mp4

The Problem…. We Love the Freedom & Mobility But…Continuous Vigilance is an unrealistic requirement for drivers Y_SING-A-LONG_%20BuildMeUpButtercup.mp4

Early Estimate of Motor Vehicle Traffic Fatalities in 2012

We really Need to get to Even though Safety Doesn’t Sell, Some Automakers are Leading the Way Even though Safety Doesn’t Sell, Some Automakers are Leading the Way Up to today: Primarily concerned with safety standards associated with Crash Mitigation (air bags, seat belts, crash worthiness, …) Up to today: Primarily concerned with safety standards associated with Crash Mitigation (air bags, seat belts, crash worthiness, …) /Subaru%20EyeSight_Commercial60secCrashTest.mp4

Preliminary Statement of Policy Concerning Automated Vehicles Extending its vehicle safety standards from Crash Mitigation to Crash Avoidance with Aim at Full Self-Driving Automation Level 0 (No automation) The human is in complete and sole control of safety-critical functions (brake, throttle, steering) at all times. Level 1 (Function-specific automation) The human has complete authority, but cedes limited control of certain functions to the vehicle in certain normal driving or crash imminent situations. Example: electronic stability control Level 2 (Combined function automation) Automation of at least two control functions designed to work in harmony (e.g., adaptive cruise control and lane centering) in certain driving situations. Enables hands-off-wheel and foot-off-pedal operation. Driver still responsible for monitoring and safe operation and expected to be available at all times to resume control of the vehicle. Example: adaptive cruise control in conjunction with lane centering Level 3 (Limited self-driving) Vehicle controls all safety functions under certain traffic and environmental conditions. Human can cede monitoring authority to vehicle, which must alert driver if conditions require transition to driver control. Driver expected to be available for occasional control. Example: Google car Level 4 (Full self-driving automation) Vehicle controls all safety functions and monitors conditions for the entire trip. The human provides destination or navigation input but is not expected to be available for control during the trip. Vehicle may operate while unoccupied. Responsibility for safe operation rests solely on the automated system SmartDrivingCars, Buses & Trucks

Preliminary Statement of Policy Concerning Automated Vehicles What the Levels Deliver: Levels 1 -> 3: Increased Safety, Comfort & Convenience Level 4 (Driverless Opportunity) : Efficiency, Equity Revolutionizes “Mass Transit” by enabling the provision of mobility without incurring a Labor Cost Level 4 (Driverless Opportunity) : Efficiency, Equity Revolutionizes “Mass Transit” by enabling the provision of mobility without incurring a Labor Cost There is Fundamental Value Delivered and Need for Research, Certification and Commercialization throughout the evolution from Level 1 through Level 4 There is Fundamental Value Delivered and Need for Research, Certification and Commercialization throughout the evolution from Level 1 through Level 4

Intelligent Drive (active steering ) BAS-Plus Active Lane-Keeping Assist Active Lane-Keeping Assist (braking not steering  ) Volvo Truck Emergency braking %20Hard%20to%20Imagine%20--%20Mercedes-Benz.mp4 im_Reaper.mp4 In the Showroom Today

Why New Jersey? Observation: – Other States are have begun to jump on this… California & Google’s Self-Driving Car Initiative – Turned to focus investment on intelligence automation of the individual vehicle » letting the infrastructure to be optimized for the conventional driver.. Brilliant!! Enables “Start small; grow fast” Florida: Automated car takes test drive on Selmon Expressway Automated car takes test drive on Selmon Expressway Michigan: University of Michigan to build $6.5M track to test automated cars in Ann Arbor University of Michigan to build $6.5M track to test automated cars in Ann Arbor Texas TTI Developing New Automated and Connected Transportation Test Bed TTI Developing New Automated and Connected Transportation Test Bed California NASA, Google announce lease at Ames Research Center Ames NASA, Google announce lease at Ames Research CenterAmes Action Item: – Get New Jersey and the NJ/NY/PA Region nvolved by Leveraging the Ft. Monmouth Facility. Create the Job, Improve mobility safety and the environment. Create the specifications and certifications for Automated Collision Avoidance Technology and eventually driverless vehicles.

NASA, Google announce lease at Ames Research CenterNASA, Google announce lease at Ames Research Center AmesAmes NASA, Google announce lease at Ames Research CenterNASA, Google announce lease at Ames Research Center AmesAmes

Mercedes-Benz sends autonomous automobiles onto the USA's most extensive testing ground Mercedes-Benz sends autonomous automobiles onto the USA's most extensive testing ground

Why New Jersey? Observation: – NJ Transit and many private companies operate one of the most extensive bus transit systems in the nation The MTA and SEPTA also operate extensive bus transit systems – Average Nationwide Bus Casualty & Liability Expense in 2011 = $8,069/Bus Action Item: – Create the specifications and certifications for Automated Collision Avoidance Technology for buses so as to substantially reduce the expected Bus Casualty & Liability exposure of NJ Transit and the other bus operators in the region and around the country. This suggests a very favorable business opportunity for Bus transit Companies NJ’s and the Regions Bus (and Truck) Operators have vested fiduciary and societal interests in contributing to the achievement of this action item.

Why New Jersey? Observation: – New Jersey is the home of NAHQ of: Mercedes, BMW, Subaru, Jaguar, Volvo & Ferrari Action Item: – Create an environment that is conducive for these companies (and others) to successfully: enhance, test and accelerate the adoption of their versions of SmartDrivingCars This suggests a very favorable business opportunity for Car Companies NJ’s Car Manufacturers thus have vested fiduciary and societal interests in contributing to the achievement of this action item.

Why New Jersey? Observation: – New Jersey is the home to major Wireless Communications companies: Verizon Wireless, Qualcomm (regional office) – Only persons not engaged in driving should be consuming the services of these companies in a car. – > 80% of the time there is only one person in a car. Communication services to this “80%” market should be restricted to times when “NHTSA Level 3” automation is available. Action Item: – Create the SmartDrivingTechnology that is certified for “NHTSA Level 3” automation for more & more Cars and “Lane-Miles” This creates an evermore favorable business opportunity for Wireless Service Providers. NJ’s Wireless Service Providers thus have vested fiduciary and societal interests in contributing to the achievement of this action item.

Why New Jersey? Observation: – New Jersey is the home to major Insurance: Munich Re NA, NJ Manufacturers, Chubb Group, Prudential, Selective Action Item: – Create the Research, Certification & Commercialization Environment : To Develop SmartDrivingTechnology (SDT) such that: SDT Price SDT < NetPresentValue { Expected {AccidentLiability w/o SDT } - Expected {AccidentLiability w SDT } } This suggests a very favorable business opportunity for Insurers NJ’s Insurance Companies thus have vested fiduciary and societal interests in contributing to the achievement of this action item.

Autonomous Car Benefits to New Jersey AmountItemUnits -50% Reduced chance of dying in a car accidentPer Collision Avoidance (Level 2) car ~ 1 Lives Saved Per 1,000 cars equipped with Level 2 (= # new cars sold each day in New Jersey) ~300 Lives SavedPer year in NJ (Widespread Level 2 adoption) -50% Reduced chance of a collisionPer Collision Avoidance (Level 2) car ~ 1 Injury AvoidedPer 15 cars equipped with Level 2 ~20,000 Injuries AvoidedPer year in NJ (Widespread Level 2 adoption) >$125 Self insurance paymentsPer year per NJ driver >$250 Insurance discountPer year per NJ driver $1.25B Reduced Insurance ClaimsPer year in NJ (Widespread Level 2 adoption) -50% Reduced EnergyWidespread autonomousTaxi Deployment -50% Reduced PollutionWidespread autonomousTaxi Deployment Elimination Road CongestionWidespread autonomousTaxi Deployment 5X increase Ridership on NJ TransitWidespread autonomousTaxi Deployment 1,000 Well-paying jobsDirectly connected with the Center 100,000 Well-paying jobs Created around the Center to implement Commercialization of the technology

Terrible News! Claims are going through the roof!

2011 Nationwide Bus Casualty and Liability Expense Source FTA NTD Casualty and Liability Amount Vehicle- related $483,076,010. Total Buses 59,871 Sub-Total Casualty and Liability Amount Per Bus $8,069/Bus/Year

The Cost of Installing an Active Collision Avoidance System on a Bus Could be Recovered in as Little as One Year Through Reductions in Casualty and Liability Claims

The Initial Project: Princeton University (with American Public Transit Association (APTA), Greater Cleveland Transit, and insurance pools from WA, CA, OH & VA) Focused on Research, Certification and Commercialization of SmartDriving Technology for Buses Pending $5M Grant from Federal Transit Administration

Why Fort Monmouth? Observation: – Ft Monmouth may well be one of the most hospitable sites for those with a Vested Interest in SmartDrivingTechnology to advance their intentions. Action Item: – Create a Testing & Certification Environment for use by Those with a Vested Interest to collaboratively transition their products from Research to Full Commercialization

The “Visionaries” FMERA: Vision for World-Class Advanced Technology The Fort Princeton University: Facilitating FMERA’s Vision with a World-Class Center for Research, Certification and Commercialization of SmartDrivingCars (&Trucks & Buses) (RCCS) (pronounced “R Sis”) The Team The “Players” to be “Drafted” The “Venue” The McAfee Center and The Fort’s Roadways The “Coaching Staff” CARTS Corporation for Autonomous Roadway & Transit Systems AutomakersSuppliersFacilitatorsInsuranceUniversitiesPublic Sector Mercedes Benz (HQ-NJ) ContinentalBertram CapitalNJ ManufacturersPrincetonNJ DMV BMW (HQ-NJ) BoschVerizonMunich ReMonmouthNJ Transit Subaru (HQ-NJ) DelphiAT&T Ins. Inst. for Hwy SafetyCCNY Reg. 2 URCNJ DoT FordTexas InstDCH AutoGroupState FarmNJITNJTPA+DVRPC VolvoautonomouStuffQualcommProgressiveU of MarylandFHWA+FTA JaguarMobilEyeVisLabGeicoRutgersMonmouth County

Modal Dimension Sector Dimension CommercializationCertificationResearch Transit Cars Trucks Center’s Activity Matrix

Vehicle Bays McAfee Office Building ~ 100,000 sf Support Buildings Princeton University Center for Research of SmartDrivingCars (CRS) at Fort Monmouth McAfee Complex 1250’ x 865’ ~ 25.8 acres Princeton University Center for Research of SmartDrivingCars (CRS) at Fort Monmouth McAfee Complex 1250’ x 865’ ~ 25.8 acres

Princeton University Center for Research of SmartDrivingCars (CRS) at Fort Monmouth Exclusive Use Roadways Area ~ 60 acres Princeton University Center for Research of SmartDrivingCars (CRS) at Fort Monmouth Exclusive Use Roadways Area ~ 60 acres Vehicle Bays McAfee Office Building ~ 100,000 sf Support Buildings

Princeton University Center for Research of SmartDrivingCars (CRS) at Fort Monmouth Mixed Use Roadways ½ The Fort ~ 1 sq. mile Princeton University Center for Research of SmartDrivingCars (CRS) at Fort Monmouth Mixed Use Roadways ½ The Fort ~ 1 sq. mile Exclusive Use Roadways

Near-term Schedule/ Milestones DateItemNotes May 7, 2014Creation of Prospectus May 14, 2014Meeting with the FMERA Staff & Committees Week of June 2Meeting of Potential Founding MembersMB, BMW, Subaru, Verizon, Volvo, NJM, Munich Re, NJ DoT Later in JunePublic Announcement of Center’s existence Monday, June 30Launch of the Membership Recruiting beginning with the creation of a plan Tuesday, July 15Major Unveiling & recruiting TRB Automated Vehicle Conference Cocktail SF Airport Hyatt Friday Oct 3Inaugural Automated Vehicle SummitMcAfee Center, Fort Monmouth

Thank You Discussion!