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A Promising Road Ahead: Regulating Autonomous Vehicles

July 06, 2018

Despite a modest decline in private vehicle ownership in the last four years, many Americans still employ cars as their primary mode of transportation.[1] Comparisons among census trends in the past few decades indicate that private vehicles amassed popularity among American households following more extensive car-centric city planning beginning in the early 1960s.[2]

In recent years, Silicon Valley has taken notice of declining levels of car ownership in major coastal cities, reflective perhaps of the growing infrastructure spending on mass transit and public transport networks.[3] Firms, however, have been careful not to overlook many Americans’ dependence on their vehicles as their main, most reliable form of commuting. The reconciliation of these two phenomena has seen ride-sharing economies such as Uber and Lyft seek to disrupt a decades-old automotive industry and perhaps more significantly, begin transforming American consumer attitudes towards private vehicle ownership.[4]

Logically, autonomous vehicles and the vision of “shared personal automobiles” seem to be the next step for Silicon Valley in overhauling the American automotive industry, targeting improvements in the comfort and safety of both passengers and pedestrians. Yet despite vast advances in relevant technologies, current legislative hurdles stand in the way of allowing mainstream autonomous vehicles to become an immediate reality. Both the recent House SELF Drive Act (SDA) and the Senate Companion bill, the AV Start Act (AVSA) are recent attempts to construct a comprehensive federal policy framework for autonomous vehicle regulation in the United States.

This article will dedicate particular attention to analyzing the ways in which the SELF Drive Act (SDA) and AV Start Act (AVSA) seek to address concerns relating to passenger safety, pedestrian safety, federal oversight, privacy, cybersecurity, and significantly, the terminology used by manufacturers to market autonomous vehicles to American consumers.

Existing Legislative Challenges

Manufacturers and engineers presently must navigate a patchwork of state legislation and general federal guidelines when developing and testing autonomous vehicles.[5] As a result, the availability of specific autonomous vehicle models and their respective technologies vary across state borders. For example, whereas autonomous vehicles are presently legal to operate on all public roads in Nevada, individual manufacturers in New York must apply for a permit through the New York Department of Motor Vehicles in order to test or demonstrate the vehicle on state roadways.[6] Further, New York only approves permits for vehicles with partial automation, excluding fully-automated Level 5 vehicles designated under the SAE International Recommended Practice Report J3016 (Levels 0-5 of the SAE designation of autonomous vehicles, see figure 1 below), and requires vehicles to have licensed drivers who can take control of the vehicle if necessary.[7] Currently, only twenty-one states - including Nevada, California, Florida, Michigan, Washington, Tennessee, Hawaii - and the District of Columbia have passed specific legislation addressing the unique needs and challenges of autonomous vehicles.[8]

Source: DAE International; BCG Analysis

Recently drafted federal guidelines have sought to reconcile these inconsistencies. Federal standards set by the US National Economic Council and Department of Transportation released in September 2017 describe best-practices for manufacturers of self-driving vehicles with respect to safety, passenger privacy, and specific decision-making measures for AI in the event of a collision or motor vehicle accident.[9] For example, there exist voluntary best-practices which specify recommended guidelines for crashworthiness such as ensuring autonomous vehicles can return to a safe state by disabling power to the motor, fuel pumps and moving off the roadway autonomously in the event of a motor vehicle accident. Additionally, these Department of Transportation guidelines encourage manufacturers to submit voluntary safety self-assessments prior to testing and development. However, these guidelines are not legally binding and are ultimately superseded by state legislation. Moreover, the 1968 Vienna Convention on Road Traffic, an agreement which governs traffic laws signed by over 70 nations, still mandates that the driver having full control of the vehicle at all times.[10] While these federal guidelines are promising in their ability to influence future legislation, contemporary definitions of roadworthiness are still contingent on human operation and have neglected to anticipate surging interest in autonomous vehicles.

Prior to the SELF Drive Act (SDA) and AV Start Act (AVSA), existing guidelines sought to balance promoting passenger and pedestrian safety while giving manufacturers ample flexibility to develop their technologies and sell their vehicle models in all fifty states. Both the SDA and AVSA are explicit in prescribing that future regulation concerning the design, construction and performance of highly automated vehicles will be handled at the federal level.[11] Indeed, the bills seek to continue to improve the process of removing unintentional legislative barriers to innovation by manufacturers, such as inconsistencies across state laws and improving the accessibility of ownership of autonomous vehicles by businesses and private citizens.

A Comprehensive Federal Framework under the SELF Drive Act and AV Start Act

In October 2017, the House unanimously passed the SELF Drive Act (SDA) for regulating autonomous vehicles.[12] (It should be noted that as of April 2018, the SELF Drive Act has not been yet passed by the Senate). The SELF Drive Act reveals a significant insight into House sentiment surrounding the regulation of self-driving vehicles: there is a general consensus with regards to which aspects of autonomous vehicle regulation are most pressing - safety, federal oversight, privacy, and cybersecurity.[13] Importantly, the SELF Drive Act (SDA) reflects the legislative concerns amongst Members of Congress, giving manufacturers and consumers alike an indication of what future legislation, once enacted, might look like.

The AV Start Act (AVSA) is a Senate companion bill to the SELF Drive Act (SDA) introduced by two Democrats and two Republicans.[14] Notably, it deviates from the SELF Drive Act in its legislative areas of emphasis. The following sections will examine both bills through the scope of select key legislative themes, notably passenger and pedestrian safety, federal oversight, privacy and cybersecurity, and the terminology used when referring to autonomous vehicles.


SELF Drive Act (SDA)

AV Start Act (AVSA)

Safety: Delegates the responsibility of creating safety guidelines to the Department of Transportation itself within 24 months, based upon safety assessment certifications submitted by individual manufacturers.   Safety: Expedites process through delegating the responsibility of creating safety guidelines to the Department of Transportation’s technical research laboratory, the Volpe Center within 12 months, based upon from their existing research. 
Cybersecurity: Manufacturers will not be able to sell their autonomous vehicle models to consumers unless they designate a definitive privacy plan, cybersecurity plan and an official company representative to report to the DOT.  Cybersecurity: Manufacturers are only required to supply a cybersecurity plan; there is no mention of a data privacy plan. The terms of this cybersecurity plan are less extensive than that mentioned in the SDA and no designated company official is required. These plans may be further inspected by the Secretary of Transportation for compliance.  

Autonomous Vehicle Terminology

A fundamental challenge of autonomous vehicle regulation is defining exactly what they are. Given the advent of new technologies in autonomous vehicles, there is increasing discussion surrounding what should be defined as an autonomous vehicle and which agencies should be responsible for regulation and the introduction of new guidelines.[15] Additionally, there is a debate surrounding whether the current SAE system is sufficiently intuitive for consumers. While presently, SAE’s 5 level system is the most widely used metric for gauging autonomous by manufacturers, there is increasing discussion regarding whether such a system is deceptive for consumers. For example, following the crash of a Tesla SUV running on autopilot in Mountain View, California in March 2018, Tesla released a statement noting that its “Autopilot feature can speed, change lanes and self-park but requires drivers to keep their eyes on the road and hands on the wheel, in order to be able to take control and avoid accidents.”.[16] Consumers were made aware that “autopilot,” contrary to what the name suggests, still requires a large degree of human operation.[17] To mitigate these concerns, the House version of the Bill, the SELF Drive Act (SDA), suggests further research conducted by the Secretary of Transportation to determine how existing terminology can be modified to most effectively communicate the limitations of partial autonomous vehicle models to prospective buyers.[18]

Another point of concern is whether autonomous vehicles should be regulated under the Federal Motor Vehicle Safety Standards.[19] Manufacturers have expressed concern that while autonomous vehicles appear similar in form to regular motor vehicles, they intrinsically operate in a profoundly different manner and should require their own federal regulatory body so as not to stifle innovation.[20] For example, critics have identified that while the Federal Motor Vehicle Safety Standards are necessary for licensing requirements for human-operated vehicles, it’s requirements are less suited to the regulation of highly autonomous vehicles which act more analogously to self-operating robots. Likewise, there is debate surrounding whether individuals who are legally prohibited from operating vehicles – young children, the elderly– should be allowed to operate a fully or partially autonomous vehicle. It should be explicitly noted that the AV Start Act (AVSA) dedicates particular attention to ensuring that highly autonomous vehicle technologies remain accessible to individuals with disabilities and suggests manufacturers implement visual, auditory, and haptic displays in future models.[21] Ultimately, it is important for government and regulatory bodies to acknowledge the difference between human-operated and autonomous vehicles and cater to these unique regulatory challenges accordingly.

Passenger and Pedestrian Safety

Both the SELF Drive Act (SDA) and the AV Start Act (AVSA) address and acknowledge the significance of passenger and pedestrian safety surrounding autonomous vehicles, albeit from two different approaches. With an expedited timeline of 12 months, the AVSA uses the Volpe Center, the Department of Transportation’s technical research laboratory, to review existing regulatory language surrounding autonomous vehicles and gives the Department of Transportation the mandate to update car regulation according to the results.[22] On the other hand, the SDA requires the Department of Transportation to create regulations within 24 months prescribing the submission of safety certifications by vehicle manufactures. The Secretary of Transportation will need to specify which entities are required to submit certifications, a clear description of what data and information are needed from manufacturers to ensure safety benchmarks and met, and a plan of how these certification requirements can be amended.[23] In the interim, manufacturers will be required to submit safety assessment letters to the National Highway Safety Administration.[24] Moreover, in the SELF Drive Act, the Department of Transportation is encouraged to update the existing Federal Motor Vehicle Safety Standards to accommodate the unique needs and challenges of autonomous vehicles, suggesting that House legislators view the role of regulating autonomous vehicle technology within the domain of existing regulatory bodies.[25]

Whereas the Senate AV Start Act (AVSA) expedites the legislative process by using the Volpe National Transportation System Center’s extensive research on the safety implications of autonomous vehicles, it limits the amount of input that manufacturers can offer (which is the function of safety assessment certifications in the Self Drive Act). However, this may be worthwhile given the quicker timeline of 12 months rather than 24 months. Additionally, the Self Drive Act (SDA) employs ambiguous language used to describe manufacturer safety reports, which may cause confusion rather than achieve its intended goal of streamlining vehicle safety standards. Ultimately, with regards to passenger and pedestrian safety, the AV Start Act (AVSA) can be successful in giving manufacturers more transparent federal guidelines than existing legislation or the proposals outlined in the House SELF Drive Act (SDA).

One of the priorities of the federal government has been communicating effectively with manufacturers, particularly since autonomous vehicles remain such a new technology, to ensure that the regulations that legislators impose are able to meet future changes in the market. As such, the government has been naturally hesitant to impose strict guidelines, evident in the leniency of many of the proposals within the SDA and AVSA.

Federal Oversight

The current patchwork of state governing self-driving vehicles has stifled the consistency of vehicle models across state borders. Much of the present legislative efforts have been directed towards removing this ambiguity and eliminating unintentional barriers to autonomous vehicle use.

Proposed in Section 3 of the House SELF Drive Act (SDA), the federal government, rather than individual state legislatures, will be responsible for enacting legislation for autonomous vehicle manufacturers.[26] A similar sentiment is echoed at the very beginning of the AV Start Act (AVSA). Critics argue that this clause takes autonomy away from state governments which may wish to prescribe their own guidelines, or ban autonomous vehicles outright within state borders.[27] To mitigate these concerns, Section 3 of the SDA allows state government to impose heightened state performance requirements for autonomous vehicles like they currently do with emission standards and driver’s licenses.[28] Neither the House or Senate Bill however, prohibit state governments from the continued enforcement of its current responsibilities, such as licensing, driver education, insurance or law enforcement.[29] Furthermore, both bills hint that future domestic regulation will seek to align with evolving international standards. Ultimately, the centralization of regulation and increased federal oversight will create transparency for manufacturers and streamline current inconsistencies across state legislation but must address the needs, concerns and desires of state governments to be popularly accepted.

Privacy and Cybersecurity

The House SELF Drive Act (SDA) and Senate AV Start Act (AVSA) take two drastically different approaches to privacy and cybersecurity when dealing with autonomous vehicles. While the SDA prescribes comprehensive privacy and cybersecurity standards for car manufacturers, the AV Start Act instead encourages submission of security plans from individual manufacturers.[30]

Notably, in Section 5 of the SELF Drive Act (SDA), the House specifies that individual manufacturers will not be permitted to sell autonomous vehicles to American consumers unless they have a data privacy plan, cybersecurity plan, and a designated official to supply the Department of Transportation with specifications regarding their vehicle models.[31] These proposed privacy plans state that manufacturers must disclose what information is collected about passengers, how this information is used, and allow passengers to remove self-identifying information from this data.[32] However, data that can no longer be linked to vehicle owners or has been anonymized through encryption methods, is notably exempt from these proposed privacy plans.[33] Additionally, much like how data-privacy plans for mobile and telephone contracts are subject to review by the Federal Trade Commission, manufacturers of autonomous vehicles will be reviewed for misrepresentative claims in their data privacy specifications.[34] The SELF Drive Act (SDA) also further specifies that manufacturers should update training and supervision procedures for company employees regarding best-practices governing cybersecurity and privacy, including limitations on the amount of consumer information accessible by employees.[35]

On the contrary, Section 14 of the AV Start Act (AVSA) only mandates manufacturers to propose a cybersecurity plan, albeit specifying in much less detail than the SELF Drive Act (SDA) what such a plan might entail.[36] This stance is varied to the SDA in which, if manufacturers do not abide by both the proposed privacy and cybersecurity measures, they will be prohibited from selling automated vehicle models. Clearly, the SDA places a considerable weighting on ensuring the privacy and security of consumer information, reflecting the sentiment of legislators who deeming privacy just as important as physical safety as autonomous vehicle technology further develops. This subtle contrast in priorities reflected between both bills is surprising given the overwhelming significance placed on consumer privacy and cybersecurity by the House version of the bill.


Both the House SELF Drive Act (SDA) and the Senate AV Start Act (AVSA) are promising indicators that major steps are being taken to reconcile inconsistencies in the current patchwork of state legislation and build a comprehensive federal framework to encourage innovation, safety and privacy in autonomous vehicles. Perhaps most significantly, the bipartisan support it has received so far shows a shift in sentiment by legislators towards the feasibility of self-driving cars on American roads and should be welcomed by advocates of this new technology.

Beyond doubt, the regulatory stance the federal government chooses to adopt should continue to incorporate existing research from manufacturers and other prominent bodies such as the Volpe National Transportation Systems Center, ensuring that legislation continues to adapt to the latest developments and encourage innovation from manufacturers in the sphere of this promising technology.

Student Blog Disclaimer
  • The views expressed on the Student Blog are the author’s opinions and don’t necessarily represent the Penn Wharton Public Policy Initiative’s strategies, recommendations, or opinions.


  [1] https://www.statista.com/statistics/199974/us-car-sales-since-1951/

  [2] https://cars.lovetoknow.com/Car_Ownership_Statistics, https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_15_5YR_DP04&prodType=table



  [5] http://www.ncsl.org/research/transportation/autonomous-vehicles-self-driving-vehicles-enacted-legislation.aspx



  [8] https://www.nhtsa.gov/technology-innovation/automated-vehicles-safety

  [9] https://www.transportation.gov/AV

  [10] https://treaties.un.org/Pages/ViewDetailsIII.aspx?src=TREATY&mtdsg_no=XI-B-19&chapter=11&Temp=mtdsg3&clang=_en

  [11]https://www.congress.gov/bill/115th-congress/house-bill/3388 & https://www.congress.gov/bill/115th-congress/senate-bill/1885


















  [29]https://www.congress.gov/bill/115th-congress/house-bill/3388 & https://www.congress.gov/bill/115th-congress/senate-bill/1885









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