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A Better Partnership


Dec 2016
December 09, 2016

The Scoop on Michigan's New Landmark Automated Vehicle Laws

Earlier today, Governor Rick Snyder signed into law a package of four bills that advances Michigan’s position as a national leader in autonomous and connected vehicle innovation. The bills were introduced by Senators Kowall, Warren and Horn, and received wide bipartisan support from both houses of the legislature. (Read our earlier coverage of the legislation package.)
The new laws address five main areas pertaining to the deployment of automated and connected vehicle technology on Michigan roads:
  • Truly “driverless” cars for public operation
  • Safe Automated Vehicles Environment (SAVE) program: manufacturer-operated, geo-fenced fleets of on-demand, self-driving cars-for-hire
  • Connected vehicle “platoons”
  • Liability limitations for manufacturers and repair mechanics
  • Michigan Council on Future Mobility
The laws build upon Michigan’s trendsetting 2013 legislation and reflect an effort to make the state the epicenter of the “mobility industry.” For our breakdown of each of the above topics, continue reading.
Industry experts agree that legal risk is one of the biggest hurdles to the economic viability of automated vehicles. By enacting forward-thinking legislation, Michigan has shown it will lead the charge to relieve the stress of that uncertainty. In other words, this may be one of those rare instances in which, instead of stifling innovation with burdensome requirements, legislation will actually foster it.
Michigan, however, is merely one state among many that make up a patchwork of different regulatory schemes, each of which the industry must comply with in order to bring the technology to market. Whether or not (and how quickly) other states will model similar legislation after Michigan’s, remains to be seen.
Truly “Driverless” Cars for Public Operation
The law: A human being no longer has to be sitting in the driver seat while testing or operating an automated vehicle on public roads. Instead, the operator need only monitor the vehicle’s performance and be able to take control of its movement. An automated driving system is considered to be the “driver” for purposes of any traffic or motor vehicle laws that require physical presence or manual action. To travel legally without a human, the vehicle must be equipped with a failsafe that achieves a “minimal risk condition” if the human fails to take over when necessary.
Our take: Michigan’s 120,000 miles of roadways are now open to driverless vehicles. Treating the automated driving system as the “driver” under rules that require a physical act is consistent with the March 2016 report of the National Highway Traffic Safety Administration (NHTSA), which applied a similar principle for the purposes of current Federal Motor Vehicle Safety Standards that assume the presence of a human driver. The success of automated vehicle technology critically depends on such cohesiveness among policies from state legislatures and NHTSA.
SAVE Program
The law: Compliant companies are authorized to establish and operate fleets of on-demand, self-driving cars-for-hire, in what are called Safe Automated Vehicles Environment (SAVE) zones. A fleet operator can begin services on public roads after self-certifying that it meets the law’s requirements, with no required pre-approval process. Local governments cannot impose regulations or fees on the ridesharing networks.
  • Manufacturer requirements: the program is open to anyone who satisfies all of the following requirements:
    • Has manufactured automated motor vehicles in the U.S. that are certified to comply with all applicable Federal Motor Vehicle Safety Standards;
    • Has completed 1,000,000 miles of public road testing in the U.S.; and
    • Has obtained at least $10,000,000 of insurance coverage and provided evidence to the Michigan Department of Transportation (MDOT).
  • Vehicle requirements: the vehicles in the fleet must have the following features:
    • An automated driving system;
    • A system that integrates wireless communications and vehicle location technology to facilitate emergency medical response to a crash; and
    • A data recording system that has the capacity to record the automated driving system’s status and the vehicle’s speed, direction and location during a manufacturer-specified time period before a crash.
  • Operating requirements: The fleet may operate only within predetermined geographical boundaries—i.e., the particular “SAVE zone.” The operator must maintain incident reports and submit periodic summaries to MDOT and the National Highway Traffic Safety Administration. By participating in the SAVE program, the fleet operator assumes liability for each incident in which an automated driving system is at fault.
Our take: This aspect of the legislation package drew sharp criticism from Google, on behalf of innovators in the field who do not manufacture vehicles and thus do not qualify to participate in the SAVE program. The rules were revised slightly, but are still clearly a boon to original equipment manufacturers (OEMs). That being said, nothing in the new laws prohibits an OEM from partnering with the Ubers and Lyfts of the world to implement their ridesharing networks, as long as the OEM retains ultimate responsibility. The information reporting requirement will help regulators leverage the data generated by these advanced vehicles for the public good—though once the safety of the technology is proven, such requirements may constitute unnecessary burdens.
Connected Vehicle “Platoons”
The law: A “platoon” is a group of vehicles that travel “in a unified manner at electronically coordinated speeds.” Anyone may operate a platoon, if the operator files a plan for general platoon operations with MDOT and the Michigan State Police (MSP) before starting to operate, and if that plan is not rejected within 30 days. Platooning vehicles are exempted from the following distance (“tailgating”) traffic law that applies to all other vehicles. If a commercial motor vehicle is part of a platoon, a human with a valid commercial driver license must be behind the wheel. The operator of a platooning truck must allow “reasonable access” for other vehicles to safely change lanes to exit or enter the highway.
Our take: Commercial vehicle platooning has huge potential for savings in fuel costs for trucking and logistics firms, who are less sensitive to idiosyncratic fears of “robot cars.” For those reasons and others, truck platooning will likely be the first widespread deployment of transportation made possible by vehicle-to-vehicle (V2V) communication technology. The nature of the technology behind platooning demands that any authorizing legislation include an exemption from tailgating laws. Michigan’s law includes that feature along with policy safeguards to ensure truck platoons are properly vetted before use, have a professional on board and interact safely with the surrounding traffic.
If the law were to accommodate the absence of a human driver in the trailing vehicles in a commercial truck platoon, labor benefits and even more cost savings would accrue to the firms deploying platoons. We anticipate future legislation to accomplish that end by exempting non-leading trucks from the human driver requirement or by classifying platooning vehicles as a single unit. Such changes, however, are unlikely until much farther down the road.
We also find it interesting that, unlike participants in the SAVE program, platooning vehicles need not comply with information reporting or data collection requirements. Data transmitted by these vehicles could include basic metrics like road smoothness, precipitation drainage and vehicle kinematics, or higher-cost data related to the individual driver, load tonnage or cybersecurity vulnerabilities. Departments of transportation and trucking regulators could leverage that data to do their jobs more efficiently and effectively. Industry researchers and developers, moreover, could use it to adapt their ongoing work to real-world experiences (to the extent that the data is made available to them).
Liability Limitations for Manufacturers and Repair Mechanics
The law: Manufacturers are immune from liability that “arises out of any modification” made to the vehicle without the manufacturer’s consent. Mechanics that repair automated vehicles to manufacturer specifications are immune from product liability resulting from the repairs.
Our take: During legislative hearings, a representative of the auto negligence attorney community raised concerns about how automotive personal injury victims would be protected under the new law. While those concerns were not expressed explicitly, the limited scope of these liability shields means that manufacturers of automated vehicles will be subject to normal product liability and warranty legal doctrines.
How existing legal regimes will adapt to this emerging technology has vexed academics and industry professionals alike. Some experts believe that the development is not unlike any other technology and heed patience while the law catches up at its usual slow, uneven pace through the courts. Others argue that the intervening uncertainty will cripple innovation and call for a specialized, statutory claim system to compensate accident victims. By staying largely silent on this issue, Michigan lawmakers have punted to the courts, at least for the time being.
Michigan Council on Future Mobility
The law: The state establishes a new “Michigan Council on Future Mobility” within MDOT to provide policy recommendations to the governor, legislature, MDOT, the Department of Technology, Management & Budget (DTMB), the Department of Insurance & Financial Services (DIFS), and the MSP. The first set of recommendations must come on or before March 31, 2017 and continue annually thereafter. The council will consist of 17 voting members, as follows:
  • 11 governor appointees who represent local government interests or are business, policy, research or technological leaders;
  • One governor appointee who represents insurance interests;
  • The Secretary of State or her designee;
  • The director of MDOT or his designee;
  • The director of DTMB or his designee;
  • The director of DIFS or his designee; and
  • The director of MSP or his designee.
In addition, the council will seat four non-voting members:
  • Two state senators—one from each party—appointed by the senate majority leader; and
  • Two state representatives—one from each party—appointed by the house majority leader.
Our take: With a deadline to issue recommendations by March 31, 2017, the yet-to-be-appointed council will be busy right away. In addition to the 12 members appointed directly by the governor, the three department directors are each appointed by the governor with the advice and consent of the senate. The makeup of the council therefore has the potential to become subject to a game of political football, considering we will have a new governor after the 2018 election. We remain optimistic that this reality will not distract or impede the council from its mission to keep Michigan at the forefront of mobility improvements.

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