For all of President-elect Donald Trump’s campaign promises about bringing back millions of jobs to middle America starting in 2017, this year is shaping up to be one of the machine, not the human.
Artificial intelligence is almost ready for prime time – and the impact will be felt a lot sooner than many people think. For proof, look no further than the burgeoning industry for driverless cars.
Merrill Lynch is projecting that fully autonomous taxis could account for more than 40 percent of all new vehicle sales within the next two decades, potentially putting millions of cab drivers and truck drivers out of work. And that’s to say nothing of the highly automated factories where these vehicles will likely be built. Car ownership will begin to move from something personal to something people think of as an Uber-like service, a notion that’s generally shared by old-line automakers such as Ford and upstarts such as Tesla.
Google is shooting for 2020 to start selling its autonomous vehicles. Ford says it’s rolling out driverless cars for a ride-sharing service by 2021. Tesla has similar plans. The industry is expected to balloon to a $42 billion global market by 2025 and only grow from there.
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So far, 20 companies have jumped at the chance to test some 130 driverless cars on California’s roads. They all agreed to apply for a special permit from the Department of Motor Vehicles, and to abide by rules that require a driver with a clean record to be present at all times and for malfunctions to be reported to the state.
But the question now is, can California, with its regulations, keep this going in 2017 and beyond?
Normally, this wouldn’t even be concern for this state, with its long track record of fostering innovation. But with Uber’s abrupt departure for Arizona in December, the result of a silly feud with regulators over filing for a permit to operate its driverless Volvos in San Francisco, it’s a question that must be asked and answered.
Arizona Gov. Doug Ducey, of course, sees Uber’s pending road tests near Phoenix as a sign his state is “paving the way” to successfully pilfer more tech businesses from California. Ducey unfairly claims California “puts the brakes on innovation and change with more bureaucracy and more regulation.”
California’s regulations for autonomous vehicles aren’t exactly onerous, with a $150 fee and 72-hour wait for a permit. The rules are designed to ensure public safety, while also allowing for innovation. The rules though seemingly not onerous, might as well be an encyclopedia compared to the two-page executive order Ducey signed last year authorizing the technology on Arizona’s roads.
And California rules certainly are more prescriptive than those of Pennsylvania, where Uber has been letting customers hail driverless cars, or Florida, where autonomous vehicles can operate on public roads without a driver behind the wheel.
Michigan went a step further when Gov. Rick Snyder signed bills that will let companies test vehicles without steering wheels or pedals. Dearborn-based Ford, with its fleet of reconfigured Fusion Hybrids, is ready to do just that.
The truth is Uber pulling its Volvos from California isn’t a huge deal. It’s only 16 cars, after all, and Uber’s argument about why it didn’t need a permit is shaky at best.
But the dust-up should serve as a reminder to regulators and the Legislature to tread carefully on innovation. California needs to maintain its commanding presence in what’s sure to be one of the biggest industries of the coming decades. Uber has responsibility here, too. Even in the new world Uber envisions and despite its image as an innovator that breaks the rules, protecting public safety is a must.