Federal transportation regulators have given the green light to autonomous vehicles, accelerating an already brisk race among technologists and car manufacturers to remove human operators from the driver's seat.

But that green light comes with new red tape.

After three years of restless anticipation since the first federal policy statement on driverless cars, the US Department of Transportation (DOT) said last month that manufacturers must submit to a 15-point federal vehicle safety assessment prior to an autonomous vehicle's commercial introduction, a sharp break from the agency's 50-year history of allowing the automotive industry to self-certify. (Read the entire report at the DOT's website.)

Earlier this year, the National Highway Traffic Safety Administration (NHTSA), the agency tasked with writing and enforcing federal motor vehicle safety standards, scrapped its old autonomy classification model and instead adopted a six-tier scale developed by the Society of Automotive Engineers, ranging from Level 0 at complete human operation to Level 5 with fully autonomous operation through a combination of radar and mapping programs.

Despite this added layer of new red tape, the new driverless vehicle program stopped short of imposing an overarching federal regulatory framework for autonomous vehicles. Instead, it offered loose policy guidance to state regulators and lawmakers.

The plan strongly encourages states to allow federal DOT regulators alone to govern highly autonomous vehicle (HAV) safety and performance standards. It also prods state legislators to review existing laws that might impede driverless adoption, such as requiring the presence of one hand on the steering wheel at all times, or that would stifle traffic-easing platooning technology. To date, only Washington, DC, and nine states—eight by legislation, one by executive order—have any HAV laws or regulations on the books.

Within the past 12 months:

  • Electric-car maker Tesla unveiled a Level 2 autonomous "autopilot" system to regulate speed and control lane adherence.
  • Ride-sharing giant Uber deployed a commercial fleet of Level 3 autonomous taxis in Pittsburgh that are capable of robotic braking and steering but still require the presence of a human operator in the driver's seat.
  • Software startup NuTonomy is testing Level 3 vehicles on the streets of Singapore.

To date, no Level 4 autonomy cars—those requiring no human assistance when operating within a confined, controlled geography—are cruising American roadways. But the industry believes the NHTSA's new light-touch policy guidance will enable that to happen, ensuring that regulation neither speeds ahead nor lags behind technology.

Impact on insurance, safety

With widespread adoption of HAV technology, automotive insurance premiums could fall by as much as 40 percent by 2050, according to a new report by global reinsurance broker Aon. The report hinges on the expectation that the number of collisions will dramatically recede as accident-prone humans are replaced at the controls by robots more equipped to process massive quantities of data and to adapt instantly to dynamic road conditions. Aon's safety forecast tracks with one by business consultancy McKinsey & Company, which estimated in a report last year that driverless cars could reduce traffic fatalities by as much as 90 percent.

Impact on cities, traffic, productivity

It is estimated that for every active car-share vehicle, American roads shed between nine and 13 other vehicles. Those figures are expected to rise as driverless cabs go mainstream.

The dramatic lessening of active vehicles has profound, far-reaching implications for the nature of modern cities. As conventional commuting vehicles are replaced instead with driverless shared cars that can remain in constant operation, parking structures and surface lots could be replaced by green spaces or new commercial development.

The average daily American commute is just under 50 minutes. Annually, across the globe, people spend roughly one billion hours commuting to and from work. With autonomous vehicles, that time could be repurposed for both productive and personal functions. In a separate report by McKinsey, analysts predicted that new time vacuum could be filled by digital media consumption valued at US$5.6 billion per year.

Driverless cars will have an enormous impact on daily life and the global economy.