BEFORE THE BAR | Week 2

BEFORE THE BAR | Week 2

Before The Bar is a weekly vlog series brought to you by our summer intern class and future lawyers. They will brief you on trending legal topics every Thursday.

This week, meet Nick. He will be discussing laws regarding the future of self-driving cars in New York City.

Stay tuned for our next vlog featuring Karen!

https://www.youtube.com/watch?v=S39YToBKiOw

Here's the full blog post:

The Future of Self Driving Cars in NYC

By: Nicholas Anselmi

New York Governor Andrew Cuomo's late 2017 announcement that GM and Cruise Automation applied to begin the first sustained testing of vehicles in fully autonomous mode in New York refers to the fact that in June 2017, Audi conducted the "first successful autonomous drive in New York, according to state officials."

What distinguished the GM and Cruise Automation test program as "sustained" was that it was slated to last longer than the single day or demonstration of self-driving car technology that Audi had a chance to conduct in New York last year. Other automakers in addition to GM similarly had an opportunity to apply to test their self-driving car technology on public roadways before the law expired on April 1, 2018. However, somewhat unsurprisingly, the GM and Cruise Automation test program was never able to launch before the original April 1, 2018 deadline given the short timeframe within which they had to work.  This is due to the fact that what distinguishes the New York bill from those of other states is that it is highly restrictive.

For example, under the terms of Arizona Executive Order 2018-04, companies such as auto manufacturers and ride-sharing services would not have to shoulder the expense of hiring individuals to ride in the vehicles during test runs. While states as seemingly lax as Arizona might therefore be more attractive places for companies to test their technology, the resulting test environment gave rise to an unfortunate accident on March 19, 2018 where a 49-year old woman was struck and killed by an unoccupied self-driving Uber vehicle. All told, the local rules in jurisdictions such as Arizona exemplify the depth of a sort of sliding scale of receptiveness to the activity of automotive technology and manufacturing companies across the United States.

The recently passed New York state budget bill has extended the autonomous vehicle technology trial period to April 2019 and walked back a few of the affirmative responsibilities placed on autonomous vehicle testing. For example, it "exempts the demonstrations from a state law prohibiting hands-free driving." The deadline extension will thus give more autonomous vehicle technology developers a chance to get their applications in and set up the on-site support systems they need to be successful.

However, a recent revision to New York State Assembly Bill 9508 stipulates that "[a]dditionally, a law enforcement interaction plan shall be included as part of the demonstration and test application that includes information for law enforcement and first responders regarding how to interact with such a vehicle in emergency and traffic enforcement situations." Such emphasis on expanded police oversight underscores New York's concern with safe and monitored testing in order to avoid accidents similar to that which occurred in Arizona back in March. This revision has been incorporated through the aforementioned New York state budget bill.

The New York State Department of Motor Vehicles has made a simple Autonomous Vehicle Technology Demonstration/Testing Application available on its website. The primary form, entitled "AV-1," lays out the major legal requirements as passed by the New York State Legislature.

• Form AV-1 lays out the terms of the applicant's agreement to report the parameters and results of their testing.
• This information would include the purpose and date of the testing, as well as a description of the parameters and locations of the tests complete with total miles traveled during the tests.
• The applicant is then expected to report any relevant findings on safety, traffic control, traffic enforcement, or emergency services.

Applicants are also required to fill out an "Autonomous Vehicle Technology Demonstration/Testing Addendum" referred to as "AV-2," which handles the requirements of the New York State Police. Here, the applicants must supply the names and information of their test vehicle operators and agree to provide specific routing information for each test including date, time, origin, destination, the sequence of roads on which the test vehicle intends to travel, and total routing distance in miles to the nearest 1/10 mile.

On the face of these applications, it seems that the DMV's approval process is limited to just having applicants prove that they can meet the minimum statutory requirements in advance and providing documentation where relevant.  However, it should be noted that the AV-2 form lays out a table of "NYSP Autonomous vehicle Test Supervision Rate Calculations" for the cost of reimbursing the New York State Police for their supervision during each demonstration. The Regular hourly rate is listed as $92.73 with the Overtime Hourly rate set at $131.67. Additionally, there is a mileage cost of 53.5 cents per mile. This is the only cost associated with the testing process that gets collected by a state entity listed on the application form.

Given the requirements placed on autonomous vehicle technology testing applicants in the New York DMV's application, it appears that the DMV is planning on at least synthesizing and reviewing the self-reported data of testing applicants to assess the impact of the technology on safety, traffic and emergency services. The level of cautious restraint that New York State has exercised so far in embracing autonomous vehicle technology testing is a testament to this notion. Just how comprehensive and meaningful a report the DMV will be able to author remains to be seen, however it is clear that it will have a direct pipeline to the expertise of the applicant companies via their own state-mandated reporting.

The implications of autonomous driving technology for the auto insurance industry are interesting as well. About a year ago, Warren Buffet expressed his concern that "artificial intelligence poses a threat to Berkshire Hathaway's auto insurance business." Jeff John Roberts of Fortune.com wrote that an Accenture report released in 2017 concludes "self-driving cars will lead to a big drop in individual insurance premiums. But that drop will be more than offset by new categories of car insurance, especially ones related to cyber security, which Accenture says will be worth $12 billion in 2025."A potential trend could also emerge where autonomous vehicle manufacturers explore the possibility of selling insurance policies along with their cars. Last year, Tesla introduced its "InsureMyTesla" service in Hong Kong and Australia. With the market for autonomous vehicle insurance still developing, it remains to be seen how much the major auto insurance issuers such as Geico and Allstate will adjust their main business lines to respond to changes in personal transportation in the coming years.

The march towards getting autonomous vehicles on the roads of New York figures to be a long endeavor. Areas such as New York are slow to act in testing and adopting autonomous driving technology precisely because of the safety challenges associated with attempting to introduce this technology to areas where there are a lot of people and vehicles in a relatively small amount of space.

The Regional Plan Association (RPA)'s Fourth Regional Plan released in late 2017 contained essential recommendations for the New York-New Jersey-Connecticut metropolitan area as it prepares to accept autonomous vehicles in the coming years. Drawing on data and reports synthesized by McKinsey & Company, the RPA has outlined a basic timeline of what the gradual introduction of autonomous vehicles will look like in the tri-state area. The RPA projects that fully autonomous vehicles will hit the market between 2022-2027, however the roadway infrastructure will have some catching up to do in terms of integrating autonomous vehicles and those that require operation by a driver.

Yet, as we look to 2040 and beyond, the RPA believes that by this point land use planning will be fully transitioned into making way for "pedestrians, cyclists, and public spaces, in both urban and suburban streets."

Ultimately, the future of autonomous vehicle technology in New York depends on how quickly it will take the state authorities to feel comfortable that these vehicles are safe for New York's often congested roadways. New York will also have to be sure to update its roadway infrastructure to accommodate all modes of transportation with the advent of this technology.