Why the Autonomous Car Industry is Thrilled with Transportation Secretary Nominee

Elaine Chao, Trump’s nominee for transportation secretary, will wield great power over how driverless cars and other automated vehicles will be regulated — or not.

by Russ Mitchell, Los Angeles Times / December 16, 2016

(TNS) -- SAN FRANCISCO — Silicon Valley voted heavily for Hillary Clinton, but companies working on driverless cars seem overjoyed with President-elect Donald Trump’s nominee for Transportation secretary, Elaine Chao.

Chao will wield great power over how driverless cars and other automated vehicles will be regulated — or not.

Although she needs to be confirmed by the U.S. Senate first, she’s highly regarded in Washington, especially among Republicans, and her husband is Senate Majority Leader Mitch McConnell.

Moreover, as secretary of Labor under President George W. Bush, Chao was known not for the rules she crafted and enforced, but for her free-market approach that was generally hands-off.

For those in Silicon Valley and other tech firms where fears abound about too much government intervention and meddling, that’s a big relief.

“We expect the new administration to be pro-innovation, pro-American innovation and pro-American employment,” said Mike Jellen, president and chief operating officer of Velodyne Lidar, in reaction to Chao’s nomination.

Velodyne is a major supplier of sophisticated sensors for driverless cars and trucks. Jellen believes enacting regulations to control advancing technology would impede innovation.

Others in the industry agree.

“We’d like to see her continue with her track record of light regulation,” said Grayson Brulte of Brulte & Co., an innovation advisory and consulting firm. “If she allows forward thinking entrepreneurs to build on the platforms that are autonomous vehicles, we’ll unleash an economic boom that will create huge numbers of jobs.”

Even consumer advocates offer cautious words of praise: “I’m concerned about her general anti-regulatory approach, but even though I disagree with her philosophy, I would say she is clearly qualified for the position,” said John Simpson, a director at Consumer Watchdog.

Chao has served as a deputy secretary of transportation and was Labor secretary through Bush’s two terms, during which she pushed for less federal regulation and was criticized for allegedly not enforcing some regulations already on the books, such as overtime rules for wage earners. She describes herself at the top of her own homepage with a 2003 quote from Newsweek: “Elaine Chao — as slender as a stiletto, and as steely.”

She can’t approach automated vehicles as a deregulator — few federal regulations on driverless vehicles exist. Still, as automakers race to develop autonomous cars, the government faces big questions about how the vehicles will be adopted on a mass scale.

Safety is the biggest concern, and Chao must balance regulations that protect the public while avoiding those that impede innovation.

Today, some cars already come with semiautonomous features, such as Tesla and its Autopilot mode. As long as a driver is at the wheel to take control, federal laws put few limits on automation.

Federal law also says a car is not allowed on the road without a steering wheel or a brake pedal.

But at some point, those early rules could change.

Industry insiders say they don’t want Chao to ignore driverless car policy.

Instead, they hope to avoid a patchwork of differing and conflicting rules across the 50 states.

“This should be centralized,” said Alain L. Kornhauser, director of the transportation program at Princeton University and an autonomous vehicle expert, “but that doesn’t mean the states don’t play a part. It would be better if we had a common understanding.”

Although some had expected an aggressive regulatory approach from the Obama administration, it’s been mostly hands off under Transportation Secretary Anthony Foxx.

In September, the department issued a federal automated vehicles policy that set guidelines for driverless car developers and sought to balance safety and innovation.

It avoided hard-and-fast regulations while making clear that additional rules were likely to come as more was learned about the technology and its record of safety. The policy also listed “model” regulations for the states to consider. And it set out reporting requirements so government officials could stay on top of the industry’s problems and progress.

The Obama policy “is light-handed enough to provide enough flexibility for innovation,” Kornhauser said.

Bridget Karlin, managing director for the Internet of Things at chip maker Intel, called the Obama policy “an important first step and a milestone.”

Still, Karl Iagnemma, chief executive of NuTonomy, a driverless startup, hopes Chao will cut back on paperwork requirements that, he believes, favor established companies. “If you’re a large organization, you may welcome a bit of regulation to keep the small guys out,” he said.

Regardless of whether Clinton or Trump won, the industry was ready to push for more clarity after the election, especially for real-world testing of driverless vehicles on public roads.

“We want (government) support to test these fleets as soon as possible,” said Velodyne’s Jellen. “Anything that promotes real world testing could really have a major impact on the development of this technology and on saving lives.”

States can allow driverless car testing on, say, a closed business campus or a dedicated highway lane.

Michigan and Florida are establishing rules and guidelines as they aggressively promote their states as test beds for driverless cars. Economic development is one motivator. In Florida, the state’s huge population of retired baby boomers is another highway safety concern.

California’s Department of Motor Vehicles put forward proposed regulations this year, drawing complaints from industry representatives who consider them prescriptive and heavy handed.

To promote flexibility and innovation, Michael Boehm, executive director of the E4 Advanced Transportation Center in Los Angeles, suggested the state allow regions to, in certain cases, set their own local policies for testing self-driving vehicles.

For instance, desperate to cut pollution and ease congestion, the LA region might be up for allowing driverless trucks to be tested on dedicated freeway lanes, whereas other regions might balk at the idea.

Hod Lipson, a professor at Columbia University, said setting a safety standard based on statistical goals, not specific technologies, should be Chao’s top priority.

The Department of Transportation “really needs to provide a clear definition of how safe a car needs to be before it can drive itself, and then step out of the way,” he said. “Once consumers are assured of safety, the ripple effect will begin. But until that safety standard is defined, everyone’s in the dark.”

What Elaine Chao as Transportation secretary could mean for commercial drone use

They don’t transport people around, but drones would fall under Elaine Chao’s purview if President-elect Donald Trump’s nominee is confirmed as secretary of Transportation.

In the role, Chao — who was Labor secretary under George W. Bush — would oversee the nation’s transportation systems and infrastructure, a wide-ranging job that also encompasses cars, trains and ships.

Among the questions she’ll have to answer on the drone front: whether the unmanned aerial vehicles will eventually be allowed to fly farther than their operators can see, function autonomously and fly over people on the ground.

Under Bush, Chao was known for being light-handed with new regulations, so the possibility of loose transportation rules under her watch could help expand commercial drone use, industry experts and advocates said.

“We’re probably one of the few industries that wants to be regulated,” said Gretchen West, senior advisor at international law firm Hogan Lovells, and co-executive director of the Commercial Drone Alliance trade group. “We want fair and relevant rules in place to allow broader operations.”

This summer, the Federal Aviation Administration released new rules on commercial drone use, which freed companies from having to request special permission from the federal government for any commercial drone endeavor, a waiver process that could take months.

But there are still limitations. The new rules prevent operators from flying beyond visual line of sight and at night, though users can fly during twilight hours if their drone has anti-collision lights. Flying over people who are not directly involved in the operation is also prohibited. The maximum speed is 100 mph.

Companies with plans that conflict with the rules can apply for a waiver as long as they can prove that their proposal is safe. The FAA has said it hopes the waiver process can inform future iterations of commercial drone rules.

Ryan Calo, an assistant professor of law at the University of Washington who specializes in robotics law and policy, said fewer regulations could benefit some specific drone industries, such as delivery. That potential enterprise has been hindered by regulations that prevent drones from carrying packages unless the total weight of the drone plus the load is less than 55 pounds, as well as limitations on flying beyond visual line of sight.

Changes to those rules could affect companies such as Amazon.com Inc., which has been testing drone deliveries of packages.

©2016 Los Angeles Times Distributed by Tribune Content Agency, LLC.

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