Rumors flew as early as 2016 that Kitty Hawk, a three-year-old corporation backed by Google co-founder Larry Page, had entered the autonomous aerial vehicle space. This March, the world learned that the mysterious flying vehicle darting through the skies of New Zealand’s South Island was Kitty Hawk’s newest flying taxi prototype, the Cora.1
The Cora is a fully-electric aircraft that uses 12 lift fans to take off and land vertically.2 In the air, a single propeller whisks the Cora through the skies at 110 miles per hour.3 The Cora’s range is about 62 miles, ideal for short-range transportation.4 But what makes the Cora most intriguing is the fact it needs no pilot. On-board computers and ground operators navigate on behalf of its passengers, making the Cora one of the select few autonomous aerial vehicles of its size finally allowed to test in fully autonomous mode.5
While the Cora’s disruptive potential is clear, Kitty Hawk raised a confounding question by testing it in New Zealand: why not the United States?
New Zealand’s officials tout permissive regulations and a commitment to “trialing new technologies” as reasons why autonomous aerial vehicle manufacturers might test their vehicles there.6 New Zealand’s Civil Aviation Authority is already creating a certification process to bring Kitty Hawk’s air taxi service to market.7 Kitty Hawk projects that its taxi service may be up and running in New Zealand within three years.8
New Zealand is one of a handful of countries that have pitched themselves to manufacturers as attractive alternatives to Silicon Valley. There are good reasons to believe them.
The regulatory environment in the United States is fragmented and complex. Currently, the individual states are primarily responsible for regulating the testing of autonomous vehicles—both ground and aerial vehicles. This system creates distinct rules for each state and exposes innovators to inconsistent regulations that complicate testing, deploying, and scaling nationally. Until as recently as last month, for example, the California Department of Motor Vehicles required a test driver to sit in the driver’s seat of all autonomous test vehicles.9 States like Arizona and Michigan, on the other hand, have had no such rule for several years.10 11
Things are no clearer at the federal level. At least four different sources of legislation, administrative rules, and guidelines apply to autonomous vehicles. In September of 2017, the House of Representatives overwhelmingly passed the “SELF DRIVE Act,” which would remove barriers to autonomous vehicle testing, pre-empt state regulation of autonomous ground vehicles, and grant manufacturers limited safety exemptions to speed production into the market.12 Senate leaders have since stalled the bill.13 In a revealing statement, Senator Diane Feinstein remarked that “you can’t just dump something on a freeway and have people looking over saying ‘My God, there’s no driver.’”14 Her comments adopted the halting tenor of regulatory approaches to autonomous vehicle technology. In the unmanned aerial vehicle context “accidents involving two tons of falling steel,” might heighten consumer fears.15
Aside from ongoing—or less charitably, abortive—legislative efforts, the FAA also regulates autonomous aerial vehicles. Currently, the agency allows manufacturers to conduct test flights. But so far, it has refused to issue airworthiness certificates to companies like Kitty Hawk, preventing them from certifying their technologies and bringing them to market.16
In September of 2017, the NHTSA issued a new Automated Vehicles Policy.17 In it, the agency once again shied away from issuing binding regulations, instead offering “voluntary guidance” on a number of safety standards.18 Notably, the Policy did not propose to simplify the web of overlapping regulatory authorities governing autonomous vehicles. Instead, the NHTSA encouraged manufacturers to “account for all applicable Federal, State, and local laws in the design of their vehicles.”19
As a result, U.S. firms seeking to test and deploy autonomous aerial vehicles currently have two difficult and costly options: navigate the byzantine U.S. regulatory system, or take on the expense of shifting operations overseas while neglecting lucrative domestic markets.
But there is a more promising third way: challenging two key obstacles through greater cooperation. Consumer stakeholders are currently hesitant to embrace autonomous vehicle technology. Many Americans remain wary of riding in an autonomous vehicle because of an “unwillingness to cede control to a machine in a potentially life-or-death situation.”20 Autonomous vehicle manufacturers thus face both a legal and political struggle. Unless industry leaders and emerging competitors can disrupt the legal landscape and address consumer concerns about autonomous vehicles at the same pace as their technological innovations, the regulatory barriers slowing the introduction of autonomous vehicles into the market are unlikely to give way.
First, autonomous vehicle developers—whether competing in the autonomous ground or aerial vehicle space—can take hard-learned lessons from the aviation industry’s cooperative legislative successes. The General Aviation Revitalization Act of 1994 (GARA) did not come out of nowhere. It was nearly twenty years in the making. While the ‘60s and ‘70s were the “golden years” of manufacturing for single and twin engine aircraft, employment in the industry fell 65% between 1978 to 1988.21 New aircraft shipments fell 95%. Piper Aircraft went into bankruptcy; Cessna halted production of single engine aircraft entirely. Beech Aircraft defended 203 manufacturing liability lawsuits between 1983 to 1986, costing an average of $530,000 each to defend. The NTSB investigated these matters and determined that the majority were due to pilot error or other such causes, not manufacturing or design defects. But the lack of merit did not stop the onslaught of litigation. Three popular lines of small aircraft were pulled from production permanently. The then-CEO of Cessna noted product liability concerns as the sole reason.
Gathering together aircraft product manufacturers, pilots’ associations, and aircraft manufacturing workers, aircraft-related industries pulled their weight in Congress through interest groups such as the General Aviation Manufacturers’ Association (GAMA), the Aircraft Owners and Pilots Association (AOPA), and the International Association of Machinists and Aerospace Workers Union (IAM/IAMAW). Although the disparate aspects of the aircraft-related industries each had their own divergent self-interest at stake, they devised a primary piece of legislation that was mutually beneficial: GARA, a statute of repose for manufacturing defect claims raised 18 years after the product had hit the market. In 1994, GARA was finally passed. The Act was only three pages long—a feat even in the ‘90s—but by 1999, over 25,000 new aerospace jobs were created and the single engine models took off again. GARA’s passage demonstrates that when faced with a daunting regulatory landscape, industry competitors can combine forces and chip away at the problem by focusing on one discrete and manageable issue that has a far-ranging impact.
The autonomous ground and aerial vehicle industries need not wait until they experience massive litigation or reach the brink of bankruptcy. Learning from the aviation industry’s cooperative success, the autonomous ground and aerial vehicle industries should increase their efforts to put self-interest aside and focus on one universally helpful piece of legislation—for instance, seeking to pass legislation at the federal level that allows fully autonomous testing, without a person in the driver’s or pilot’s seat, even if compromising to get that bill means it comes with a restrictive set of parameters. For U.S. based companies, complying with those restrictions may still be less costly than moving operations to New Zealand or other competing countries. With the legislative and regulatory landscape as it is for autonomous vehicles, the old adage of eating an elephant one bite at a time applies in full force.
Second, successful campaigns for legislative reform on social issues, such as the Marriage Equality Movement and the Cannabis Legalization effort, provide helpful guidance for overcoming consumer fears about autonomous vehicles. Where voter inclinations were driven more by psychology than politics, both movements struggled to achieve legal victories in the face of unfavorable public opinion.22 Advocates for cannabis legalization were similarly plagued by a “patchwork quilt of local ordinances” that obscured compliance efforts.23 To overcome these legal and political obstacles, advocates in both movements worked in unison to hire expert consultants and share data to create “centralized, politically savvy message-tested campaigns.”24 Pro-cannabis advocates in California buttressed these efforts with legal expertise, drafting and testing tax proposals, regulations, and public health provisions that avoided the regulatory pitfalls that defective legislation created in other states.25 Both movements achieved arguably watershed victories in 2015 and 2016, when the Supreme Court issued a favorable ruling in Obergefell v. Hodges and when California passed Proposition 64. Joint psychology research and marketing campaigns are similarly necessary in assuaging the public’s and politicians’ fears about fully autonomous vehicles.
While competing automakers and technology companies closed ranks to jump-start the dormant SELF DRIVE Act, competitors would benefit from more aggressive efforts to streamline autonomous vehicle regulations in the U.S.26 They face better odds of collaboratively changing the contours of public opinion by pooling resources, hiring experts, and sharing information, where competitive concerns allow. Manufacturers should also continue to invest in their legal departments to build expertise, proactively influence future regulations, and ascertain compliance with existing regulations. Unless autonomous vehicle manufacturers can build their capacities on both fronts and at pace with their technology, the convoluted regulatory system that pushed Kitty Hawk to test the Cora in New Zealand is unlikely to resolve itself any time soon.