Autonomous vehicles: consumer acceptance on the rise?

In addition to the technological and legal challenges facing the development of autonomous vehicles, consumer acceptance represents a critical barrier to adoption.  While consumer attitudes to autonomous vehicles appear to have been rocked following a number of high profile safety incidents in 2018, a recent study suggests that over half of global consumers still want to adopt a self-driving vehicle within the next five years.

Following a survey of over 5,500 consumers and 280 executives from automotive OEMs, suppliers and tech companies from around the world, the Capgemini Research Institute made the following findings in its report “The autonomous car: a consumer perspective”:

  • Acceptance of self-driving cars is growing, with 52% of global consumers preferring to be driven in a self-driving than a normal one within 5 years
  • Urban consumers have the most positive outlook towards self-driving vehicles
  • More than half of consumers (56%) would be willing to pay a premium of up to 20% for a self-driving car
  • Over 70% of consumers view vehicle and system safety as key barriers to adoption
  • Executives overestimate consumers’ comfort with sharing personal data with organisations

The full report, which will make interesting reading for companies involved in the autonomous vehicle ecosystem, is available here.

James Allsop
James Allsop
Senior Associate, Tokyo
+81 3 5412 5409

Florida puts autonomous vehicles in the fast lane

Florida continues to lead the way in state level regulation of autonomous vehicles; recently passing legislation that permits autonomous vehicles and on-demand autonomous vehicle networks on public roads.

HB 311: Autonomous Vehicles, sponsored by Rep. Jason Fischer, and SB 932 Autonomous Vehicles, sponsored by Sen. Jeff Brandes, have sailed through Florida’s legislature and only require Governor Ron DeSantis’ signature to officially pass into law. The House-Senate bills seek to provide uniformity of laws governing autonomous vehicles, thereby clearing the regulatory path for autonomous vehicle development and increasing investment in the Sunshine State.

The legislation expressly permits fully autonomous vehicles to operate in Florida regardless of whether a human operator is physically present in the vehicle. “Automated driving systems” and “fully autonomous vehicles” are amongst the key terms defined within the legislation that exempts autonomous vehicles and operators from certain prohibitions (including on the active display of television or video and the use of wireless communications devices systems while driving).

SB 932: Autonomous Vehicles authorises the Florida Department of Transportation, in consultation with the Department of Highway Safety and Motor Vehicles, to conduct pilot or demonstration programs to explore the efficient implementation of innovative transportation technologies.  It also authorises the Florida Turnpike Enterprise, a business unit of the Florida Department of Transport, to enter into one or more agreements to fund, construct, and operate facilities for the advancement of autonomous and connected innovative transportation technologies for certain purposes.

The legislation provides requirements for insurance and operation of on-demand autonomous vehicle networks, such as Uber or Lyft, and revises the registration requirements for autonomous vehicles. SB 932, legalises “on-demand autonomous vehicle networks,” defined as a service that uses “a software application or other digital means to connect passengers to fully autonomous vehicles, exclusively or in addition to other vehicles, for transportation, including for-hire transportation and transportation for compensation.”

Florida is widely regarded as one of the leading states in the development of self-driving vehicle policy. Fischer, the architect of the House Bill, stressed the importance of this legislation in maintaining Florida’s position: “To maintain this position and encourage companies to test and deploy in our state, we must address our existing laws governing motor vehicle operation that did not contemplate a driverless future when they were written.”

Perhaps unsurprisingly, these developments have been positively received from the likes of Uber. Senior policy manager, Stephanie Smith, commented that: “This measure provides direction on the roles of state and local government and authorization for the deployment of automated vehicles on a ride-sharing network. These provisions establish a clear pathway to bring the benefits of automation to our state.”

Regulatory advancements of this kind are a necessary precursor to the deployment and commercialisation of autonomous vehicles.  While this is a welcome development for Florida, the barriers to entry and upscaling created by this ‘state-centric’ approach to regulation continue to threaten the United States’ global leadership position in this sector.

Joseph Falcone
Joseph Falcone
Partner, New York
+1 917 542 7805
James Allsop
James Allsop
Senior Associate, Tokyo
+81 3 5412 5409
Peter Keeves
Peter Keeves
Graduate Solicitor, Australia
+81 3 5412 5427

 

Who is liable when a connected and autonomous vehicle crashes?

In March 2018, a pedestrian in Arizona was struck by a self-driving Uber vehicle during a vehicle test. An Arizona prosecutor recently found Uber not criminally liable for the incident, though little detail was given for the decision (see our blog post, here).

Once CAVs are on the roads and self-driving, liability is expected to shift away from the driver towards the CAV itself. Liability for accidents should, therefore, lie with manufacturers. This article explores such manufacturers’ liability for on-road CAV accidents under the current Australian regime .

CAVs and the product liability regime

CAV-related liability will arise against a potentially complex factual background involving a multi-part supply chain, the highly technical interplay of parts and processes, varying states of control between driver and vehicle and the likelihood of continuous software updates to CAVs post-purchase. However, Australia’s existing product liability regime has proven to be adaptable across many industries (including medical devices, car parts, consumer goods and pharmaceuticals).

A potential product liability claim may have several bases under current law. The cause of action pursued will be influenced by the injured party’s identity –  whether a driver / passenger or third party. A party injured in a CAV crash may argue:

  • negligence: that a defect in or failure of the CAV breached a duty of care owed to the claimant by the manufacturer and / or supplier;
  • breach of contract: that a CAV failed to operate in accordance with the terms of a contract between a consumer and manufacturer;
  • safety defect (Australian Consumer Law (ACL)): that injuries were suffered due to the CAV having a ‘safety defect’. A defective goods action does not require a contractual relationship between the injured party and the manufacturer;
  • breach of statutory guarantees (ACL): that a CAV was defective and therefore its supply breached statutory guarantees (eg vehicles are of ‘acceptable quality’ and are ‘reasonably fit’ for their disclosed purpose); and / or
  • misleading or deceptive conduct (ACL): that a manufacturer and / or supplier’s representations to consumers (eg the CAV was safe for use) were misleading or deceptive.

The ACL-based claims demonstrate both the regime’s flexibility and certain challenges in bringing a CAV-related product liability claim.

(a) The ‘manufacturer’ and the ‘good’ 

‘Manufacturer’ has a broad meaning under the ACL, capturing the actual manufacturer, someone who holds themselves out as the manufacturer and the good’s importer. The term ‘good’ is similarly broad, and includes ‘vehicles’, ‘computer software’ and ‘any component part of, or accessory to, goods’. This arguably covers all aspects of the CAV, such as sensors, cameras, navigation software and data transmission systems.

Future car ownership and use norms will also play a role. In the increasingly popular pay-per-use model, a consumer may not be acquiring a good but instead receiving a service. The ACL captures service provision, with mirror statutory guarantees and misleading or deceptive conduct provisions.

(b) Who should have been driving?

Different levels of automation will require different levels of driver input. Establishing who should have been driving when a crash occurred will have significant implications for legal causation.

While the current legal regime could likely address such questions in a piecemeal way, through existing obligations regarding instructions for use and the usual principles of evidence, future regulation on fundamental issues such as ‘control’ will likely assist in consistent and predictable legal outcomes.

For example, future regulations may require that drivers be in control in high pedestrian areas, notwithstanding that a CAV is designed to function in those environments. The National Transport Commission (NTC) is considering this (see the NTC’s relevant policy paper, here). The question of control would fall away for ‘fully autonomous’ CAVs – although we query if a manufacturer would ever make such an unqualified statement.

(c) What is the defect?

Numerous factors specific to CAVs could conceivably cause accidents, including network outages, computer viruses, unpredictable behaviour by other road users and road maintenance conditions.

An accident may occur with no clear ‘defect’ and the CAV functioning exactly as intended. The Uber crash in Arizona appears to have been caused by the purposeful disabling of the ‘emergency braking manoeuvre’ system, disabled to reduce the potential for erratic vehicle behaviour during computer-controlled driving.

Separately, the ACL provides a defence to manufacturers where there was no defect at the time of supply. Consider the application of such a defence where, for example:

  • a crash is caused by a temporary network failure; or
  • a defect arises post-supply which can be rectified with a software or hardware upgrade.

A plaintiff may need to commence proceedings against a broad range of defendants to ensure recovery can be made against the defendant actually responsible. Large-scale changes to the legal liability and insurance regimes for CAVs may be necessary to make such proceedings more cost-effective.

(d) What instructions were given?

Instructions given to consumers by CAV manufacturers will be of paramount importance – especially those relating to maintenance, driver / CAV control sharing and driver behaviour during CAV-controlled driving. Consider, for example, a scenario where the manufacturer’s instructions require consumers to regularly install software updates to the CAV. If a crash was caused by a glitch which the software update would have corrected, questions arise around compliance with instructions and the steps taken by the manufacturer to ensure updates are made (eg should a manufacturer disable the CAV until updates have been installed?)

Conclusion

The Australian product liability regime seems largely able to handle the novel manufacturer liability claims which may arise from the widespread introduction of CAVs. Fundamental issues impacting liability, such as ‘control’, will no doubt be addressed as part of the safety risks associated with CAVs (see the NTC’s relevant discussion paper, here). As Courts identify issues over time, further legislative reform around the liability and insurance regimes will likely be desirable, taking into account any industry guidance and best practice developed.

For now, we continue to monitor, with great interest, how technological, regulatory and commercial progress will shape consumer consumption of the CAV.

Guy Narburgh
Guy Narburgh
Special Counsel, Australia
+61 2 9322 4473
Camilla Pondel
Camilla Pondel
Solicitor, Australia
+61 2 9225 5835

Inquiry into Automated Mass Transit

Following a five month inquiry into automated land-based mass transit, House of Representatives Standing Committee on Infrastructure, Transport and Cities released its Innovating Transport Across Australia Report in March that in essence recommends the Government needs to lead the transport revolution. The purpose of the inquiry was to report on current and future developments in the use of automation in land based mass transit, including the role and responsibility of the Australian Government in developing suitable technology.

Major players in the connected and autonomous vehicle industry made submissions to the inquiry and the key themes raised in the submissions included:

  • the importance of a nationally consistent legal and regulatory framework;
  • ensuring the laws and regulatory framework allows for the safe deployment of technologies that are required for the automated land-based mass transit; and
  • equipping Australian infrastructure to accommodate new automated and electric vehicle technologies.

The Committee sees the automation and electrifications of mass transit as having the potential to make Australian cities and regions cleaner, greener, more accessible and more liveable. Committee Chair John Alexander says achieving this outcome will require Australian Government’s leadership and vision.

5 key recommendations from the report:

  • Support the development of a new automated transport ecosystem

One of the biggest challenges for automated mass transit is the problem of the first and last mile – the gap between the mass transit services and the passengers’ home or destination. An automated transport ecosystem is envisioned to involve autonomous rail, light rail and buses providing for the high volume routes, which are then connected with smaller vehicles like shuttle buses or driverless cars that can provide connectivity to the passengers’ first and last mile. The development toward a new automated transport ecosystem requires a collaborative effort from the Australian, State and Territory Governments to introduce adequate policies and regulations that support such an ecosystem.

  • Developing a national hydrogen strategy

The Committee supports the development of a national hydrogen strategy. The Australian Government Chief Scientist proposed a national hydrogen strategy in December last year to capitalise the emerging economic prospects of hydrogen as an energy source. The Committee sees hydrogen based technologies playing a significant role in the future of Australian land transport however, hydrogen power brings its own infrastructure demands and the challenge is to identify the optimum pathway. The Committee recommends that the Australian Government work collaboratively with the State and Territory Governments to develop a national hydrogen strategy that provides for the manufacture and transport of hydrogen in a safe, cost effective and energy efficient way.

  • Facilitate the uptake of electric vehicles

The Committee recommends the Australian Government to increase its uptake of electric vehicles, both Battery Electric Vehicles and Fuel Cell Electric Vehicles. Electrification of transport has real potential to lower costs, reduce the environmental impact of land transport and enhance national fuel security. To ensure the electric vehicles are successfully introduced to Australia, the Government is encouraged to develop appropriate infrastructure required for the deployment of electric vehicles, ensure refueling and recharging technology are compatible with defined standards and promote greater coordination between the transport and energy sectors.

  • Undertake research to estimate the national requirement for electricity generation under an electric and automated transport future

The Committee recommends the Australian Government to estimate the national requirement for electricity generation if Australia moves to an electric and automated transport future. This ought to be done with a view to ensure that the electricity generation will meet the anticipated demand, whilst also being environmentally friendly. Namely, the Committee recommends that the Government adheres to the national greenhouse gas abatement targets, when meeting the national electricity needs.

  • Establishing statutory offices and expanding the role of current statutory bodies to facilitate the automated land-based mass transit future.

The report highlights the need to rethink the current operation of statutory bodies to enable them to play a more productive and significant role in enabling automated land-based mass transit.

The Committee specifically recommends the establishment of the statutory Office of a National Chief Engineer to provide independent expert advice on the planning and development of Australia’s infrastructure.  The Department of Infrastructure, Regional Development and Cities is recommended to conduct an audit of Australia’s existing transport communications infrastructure and requirements for automation at various stages. The audit is to help develop a national strategy for transport communication infrastructure for full automation of land transport. The Committee is also of the view that given the nexus between automation and electrification of transport, the Office of Future Transport Technology, which sits within the Department of Infrastructure, Regional Development and Cities, to expand to cover alternative energy sources such as battery electric power and hydrogen fuel cell power.

Susannah Wilkinson
Susannah Wilkinson
Senior Associate, Brisbane
+61 7 3258 6786
Stebin Sam
Stebin Sam
Graduate, Brisbane
+61 7 3258 6315

HYUNDAI CONTINUES EFFORTS TO TRANSFORM FROM CAR MANUFACTURER INTO ‘SMART MOBILITY SERVICE PROVIDER’

Hyundai was once seen as being late to the party in forging the cross-industry collaborations necessary for automotive companies to tackle the challenges posed by next generation mobility services.  However, since announcing its aim of putting driverless cars on the road by 2021, Hyundai has embarked on a series of collaborations across the tech and telecoms sectors.

Its latest deals with Yandex, a Russian multinational technology company, and Ola, India’s ride-sharing giant, underscore Hyundai’s desire to transforming itself into a ‘smart mobility service provider’.

Yandex

Yandex is a Russian internet conglomerate, often referred to as the “Google of Russia”.  Although Yandex has its roots in search engines, it has sought to diversify, including ventures in machine learning and ride hailing.  On the back of the success of Yandex.Taxi, a ride hailing service operating in 15 countries across EMEA, Yandex has now positioned itself as a frontrunner in the development of autonomous vehicle technology in Russia.  It has reportedly performed thousands of test rides of an autonomous taxi service, including in closed-campus environments in Russia, Tel Aviv and most recently Las Vegas, Nevada.

Hyundai’s collaboration with Yandex comes through Hyundai Mobis, Hyundai’s OEM parts and service division.  The companies plan to develop control systems (hardware and software) for Level 4 and Level 5 autonomous vehicle systems, with the aim of creating an fully autonomous vehicle platform that can be used by any car manufacturer, car sharing service or taxi fleet.  Reports suggest that the first stage of this collaboration will be the development of a prototype vehicle based on a standard Hyundai production vehicle.

The deal, Yandex’s first with an auto manufacturer, will see each company look to capitalise on the other’s strengths in building an autonomous vehicle platform.  Hyundai Mobis will develop sensors and vehicle control software, while Yandex will integrate its autonomous driving software into the platform and undertake testing and operations throughout Russia and other countries where Yandex is licensed to operate autonomous vehicles.  Notably, the deal is non-exclusive so both companies may work with third parties.

Ola

Shortly before the Yandex deal was announced, Hyundai announced a US$300 million investment into Ola, India’s largest mobility service provider.

The tie-up will see Hyundai and Kia working with Ola to develop unique fleet and mobility solutions, build India-specific electric vehicles and infrastructure, and develop customized vehicles for the Ola platform.

This investment is Hyundai’s and Kia’s largest combined investment to date.  It is also Hyundai’s second investment into the ride hailing sector, having previously invested US$275 million into Grab.

Time will tell whether Hyundai made its move to collaborate too late in the day.  However, these latest investments reinforce Hyundai’s desire to transform itself from a traditional auto manufacturer; to become involved across the entire mobility value chain ― including vehicle production, fleet operation and mobility services.

James Allsop
James Allsop
Senior Associate, Tokyo
+ 81 3 5412 5409
Peter Keeves
Peter Keeves
Graduate Solicitor, Tokyo

Japanese mapping technology provider to acquire US rival

Japanese map platform developer, Dynamic Map Platform Co. (or DMP), announced last month that it had signed a definitive agreement to acquire Detroit-based rival, Ushr, in a deal reported to be worth up to US$ 200 million.

In this short piece, we consider the potential significance of this deal on the high-definition mapping market; a crucial area in the development of driverless cars.

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UBER NOT CRIMINALLY LIABLE FOR ARIZONA CRASH

Arizona prosecutors have recently announced the outcome of their investigations into the 18 March 2018 crash involving a Volvo XC90 that killed Elaine Herzberg. While the vehicle was operating in autonomous mode as part of an Uber test fleet, the investigation determined that Uber is not criminally liable and as such formal charges will not be brought.

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Softbank and Amazon take driverless investments past US$1.5 billion for the first half of February

February is proving to be a blockbuster month for investment in autonomous vehicle companies, with a total of US$1.639 billion being invested in the first half of the month.

Aside from the sheer volume, there are two other striking features to these investments.  First, they involve what is believed to be Amazon’s first investment in a firm directly involved in the development of autonomous cars.  Second, they include the first investment of Softbank’s Vision Funds following the sale of its stake in US chipmaker Nvidia. Continue reading

Big Data and the Automated Vehicle Sector: competition law highlights from recent announcements in Brussels

To say there has been a lot of activity recently in Brussels concerning big data, the digital economy and competition law would be an understatement. The Brussels antitrust community was abuzz with the European Commission’s (“EC“) much anticipated conference on shaping competition policy in the era of digitisation, which took place last month and was attended by a delegation from HSF’s Brussels competition team.

In this short piece we look at one issue which is of interest to the automated vehicle sector and featured in the discussions leading up to the conference as part of the EC’s consultation on Shaping Competition Policy in the Era of Digitisation, which attracted numerous submissions by interested parties. This is the issue of big data and its importance for Connected Automated Vehicles (“CAV“) and competition in the sector.

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UK GOVERNMENT WANTS TO SEE FULLY DRIVERLESS CARS ON UK ROADS BY 2021

In its Budget on 22 November 2017, the UK Government predicted that the driverless car industry will be worth £28 billion to the UK economy and committed to establishing the UK as a world leader in the development and deployment of driverless car technology.  The Chancellor, Phillip Hammond MP, stated that the Government wants to see fully driverless cars – without a human operator – on the roads by 2021, and announced a number of regulatory changes and investment commitments to achieve this aim.

Regulatory changes

Driverless cars are already being tested on UK public roads.  However, under current rules, a licensed and suitably trained operator must supervise the vehicle at all times and be prepared, if necessary, to override the automated functions.  The Chancellor stated that the Government will make “world-leading changes” to the current regulatory framework, to allow driverless cars to be tested on UK public roads without a human safety operator on board.

The proposed changes will likely entail an amendment to the Road Traffic Act 1988 and would represent a significant shift away from the current regulatory framework.  It would also bring the UK’s position in line with certain parts of the United States, including Florida and Michigan, where driverless cars can be deployed without a human operator.

Investment commitments

Following the allocation of £100 million in the Autumn 2015 Budget for research and development into Intelligent Mobility, the Chancellor announced a range of further funding commitments aimed at enhancing the development of electric and driverless car technology and the systems required to implement and adopt that technology.  These included:

  • £5 million to trial 5G applications and its deployment on roads, including testing how to maximise future productivity benefits from driverless cars;
  • £200 million, to be matched by private investment, into a new £400 million Charging Investment Infrastructure Fund to support the transition to zero emission vehicles; and
  • £100 million to guarantee the continuation of the Plug-In Car Grant, to help consumers with the cost of purchasing a new battery electric vehicle.

In addition, the National Infrastructure Commission will launch a new prize to determine how future roadbuilding should adapt to support driverless cars.

Automated and Electric Vehicles Bill

At the same time, the Automated and Electric Vehicles Bill – which proposes to introduce an insurance framework for high level autonomous vehicles – continues its progress through Parliament.  It was considered in a Public Bill Committee and reported without amendment on 16 November, and will now move to be considered at Report Stage.

The Government has stated that it wants to create “the most advanced regulatory framework for driverless cars in the world.”  While that may still be some way off, the Bill, coupled with the commitments announced in the Budget, appear to be a step in the right direction.