The last quarter of 2017 heralded a new era of fully and semi-automated delivery vehicles, the most celebrated of which was the Tesla semi-truck; an all-electric semi-truck design that can run on batteries alone1. In the same period, Uber acquired Otto (a self-driving truck start up) and successfully delivered over 50,000 cans of Budweiser beer over a 120-mile journey in October in what was dubbed as the completion of the world’s first shipment by a self-driving truck2. Closer to Hong Kong, Jingdong, a Chinese e-commerce company, launched an unmanned light van, EV80, and began road testing in September3.

The advent of vehicles equipped with radars, sensors, high precision maps and positioning system promises to improve job quality, improve safety of delivery personnel and enhance efficiency of deliveries and fleet utilisation. The autopilot will take charge of road safety, reduce human error and fully automated vehicles could alleviate the shortage of drivers in the industry . However, the commercial viability of automated technology is not limited by its speed of progress but rather the reluctance of the legislative landscape to accept or adopt to the new technologies. There are obvious regulatory implications, of which, liability, insurance and safety are just three.

Hong Kong

Autonomous vehicles are not yet regulated in Hong Kong. The existing regulations (that apply only to non-autonomous vehicles) have forced the first driverless vehicle built in Hong Kong to commence their road tests in China4.

In another initiative by the arts and culture hub in West Kowloon, Hong Kong lawmakers have criticised the HKD $2 million fully autonomous passenger car (purchased to transport passengers in West Kowloon’s grounds) as “unnecessary” and “expensive”5. Tanya Chan, deputy chairwoman of the subcommittee that monitors cultural project’s implementation, called the idea “stupid” and “ill-conceived” and vowed to follow it up in Legco6, however these comments may be targeted more towards the cost of these vehicles than the concept of autonomous vehicles per se.

The authorities’ receptivity to automated mechanic functions is not entirely bleak. Since October 2016, drivers of Tesla Model S in Hong Kong can now enjoy its auto steer and auto lane change functions – two autopiloting features that were suspended just a year earlier7. Additionally, in the “Smart City Blueprint” published by the Hong Kong Government in 2016, the use of automated vehicles is included in the “Smart Mobility” category. As part of the “gearing up” for the testing of AVs, the Government has announced a medium term initiative (2021-2025) to undertake AV pilot projects and associated intelligent traffic systems at selected locations8.

China

China has a ten year vision to fully include automated transport into its mainstream transport system. On 25 April 2017, the Chinese Ministry of Industry and Information Technology announced a "Mid to Long Term Development Plan of the Automotive Industry" in respect of autonomous cars9. The government aims to develop China into a manufacturing and automotive powerhouse. However, current regulations have not yet caught up.

For example, under existing regulations, in the event of a road accident the driver/owner that caused the accident will be liable under the People’s Republic of China’s Road Traffic Safety Law and Tort Law. Where there is an accident involving a motor vehicle and pedestrians or drivers of a non-motor vehicle, strict liability will apply. A strict liability regime applied to the “drivers” of autonomous vehicles poses a number of questions: who (or what) is the “driver”? What liability does this leave with the vehicle manufacturer and / or the software provider? If liability is assigned to the human owner of the car or truck, what recourse do they have against the manufacturer / software provider for accidents caused by defects in the automated systems? Whilst apportionment of liability as between owner and manufacturer can be dealt with, to some extent, in the original contract for sale, it is suggested that it is better dealt with by way of government regulation.

At present, there are limited national and industry standards on autonomous cars, however the newly established Connected Smart Automotive Subcommittee aims to develop national standards on technologies relating to telematics information in the near future. There is some speculation that China would opt to follow Germany’s current regime where the driver or owner of the automated vehicle will be primarily liable for accidents with subsequent recourse against manufacturers in cases of manufacturers’ liability10, however this remains to be seen.

Singapore

On 26 August 2016, Singapore was the first country to complete a series of public road tests of six driverless taxis11. Singapore plans to have an entire fleet of driverless taxis by sometime this year with passengers being able to summon a vehicle through a smartphone application akin to established applications such as Uber and Grab12.

Regulations regarding autonomous vehicles are still in their infancy as the government assesses the role autonomous vehicles will play in Singapore. In February 2017, Singapore's Parliament amended the Road Traffic Act ("RTA")13, which amongst other changes, outlined a regulatory framework for the trials and use of autonomous vehicles in Singapore. Most notably, the definition of “motor vehicles” is no longer confined to a motor-powered vehicle with wheels and the need for a motor to form part of the vehicle is eliminated. There is also an inclusion of a new class of vehicles, being “autonomous motor vehicles” and “automated vehicle technology”. The amendments also allow for autonomous vehicles trials to be conducted on public roads and the basic registration and licensing framework is amended to reflect the potential new classes of vehicles.

Potential legal Implications

As automated technologies progress, liability for accidents and connected issues of product liability will inevitably surface14. This is especially relevant in Hong Kong where driving can be chaotic at the best of times and where a growing population and demand for e-commerce is going to bring more congestion to the roads. Even in Singapore, a nation arguably on the forefront of many technological advances, one of the autonomous taxis collided with a truck barely two months after the world’s first successful trial15.

As cars become more autonomous, the fault for accidents will arguably shift from the driver / user to the manufacturer. This will require the law to clarify the definition of “driver” and perhaps, impose limitations on the autonomous system, such as the specific conditions in which automation can be used (including specific areas or instalment of a black box) or whether a person nevertheless would have to be present in the vehicle.

This would also invariably call for a review in the current consumer protection regime, making it critical for manufacturers who wish to minimise product liability claims to ensure that products are marketed responsibly. Manufacturers will also need to adopt high(er) standards for vehicle safety and put in place robust systems for updating software when errors are found, including any cyber-attack vulnerabilities. One potential issue would be the difficulty for lawmakers to assess and determine industry standards on a complex area that most legislators would undoubtedly lack the expertise in.

Where fully automated vehicles are used as a mode of delivery, issues as to where liability would fall if the delivery gets stolen / lost / damaged will also have to be considered. Would the liability be strict or would delivery companies be able to exclude or limit liability, and how could legislation deal with incidents where the automated system is hacked by a third party? At present, it may be that insurance (and related regulations) would be the most effective safeguard for consumers to claim compensation for such liability.

With the need for such insurance, it is incumbent on legislators to ensure that insurance is available to both users and providers of automated vehicles. Policymakers would also have to consider whether statutory or discretionary insurance, (for example: first party, third party or product liability insurance), would be required. It also remains to be seen whether car owners would see an accompanying reduction in insurance premiums as the element of human error is eliminated in automated vehicles.

A final issue to consider is how the law regarding data protection and sharing will develop. Given the increased reliance on a data sharing framework, data would be required to determine liability and most importantly, who (or what) was in control of the vehicle at the time of the incident. Such data will likely to constitute personal data and thus, be protected under Data Protection legislation. A difficulty would be barriers to the access of such data and the co-ordination between regulators and consumers.

Conclusion

The greatest barrier to automated (delivery) vehicles in Hong Kong, may not be technological but legal and human barriers. Hong Kong is certainly behind their economic rivals like USA, China and Singapore, in their acceptance for a partially or fully automated system. This reluctance could stem from a perceived lack of control, however, autonomy is already a common and integral feature in transport systems such as aircraft systems, tramways and the metro systems16. Historically, the legislative framework of Hong Kong is largely based on United Kingdom. In 2015, the United Kingdom’s Department for Transport published a code of practice for testing of automated vehicle technologies, providing guidance on automated vehicles on public roads in the United Kingdom17. In this respect, Hong Kong could take guidance from its legislative forerunner.

However, policymakers are forced to accept this revolution whether Hong Kong is prepared for these changes or not. In the words of Wesley Wan Wai-hei, a member of the government’s Transport Advisory Committee: “I can foresee that Hong Kong’s taxi drivers will be replaced by this autopilot system within 10 years because driverless taxis will be an inevitable trend… This global trend will force the SAR government to put in place driverless taxis because automakers around the world will mainly produce autonomous vehicles. The government will have no choice by then.”18

The future of automated vehicles in Hong Kong could be realised in less than a decade, but the implementation may face obstacles including battling incumbent interests (such as taxi drivers who face losing their jobs) and working out the technical aspects of future regulations. So it seems that in Hong Kong at least, we are not quite there yet.