When the first steam powered cars (or locomotives as they were then called) first took to the roads in the early 1860’s it was feared that engines and their trailers might endanger the safety of the public, cause fatal accidents, block narrow lanes, and disturb the locals by operating at night. Many complained the cars were scaring the horses meanwhile the farmers were shooting the cars!
To allay the concerns, restrictions and speed limits were imposed by the Locomotive Act of 1865 (more popularly known as the “Red Flag Act“) which required all road locomotives, which included automobiles, to travel at a maximum of 4 mph (6.4 km/h) in the country and 2 mph (3.2 km/h) in the city – as well as requiring a man carrying a red flag or lantern to walk in front of road vehicles. The Act also included such matters as “Damage caused by locomotives to bridges to be made good by the vehicle owners.” However it was soon discovered that the steam carriages’ brakes and their wide tyres caused less damage to the roads than horse-drawn carriages because of the absence of horses’ hooves striking the road and wheels which did not lock and drag as they did on horse drawn carriages.
In the latter part of the 1800’s the British Motor Syndicate began a public relations campaign to lobby for the repeal of the Locomotive Act, which was declared the main obstacle to wider adoption of the car in Britain. The Act of 1865 was repealed in 1896.
Almost 120 years later we stand at the precipice of a new dawn in the age of the automobile – self-driving cars. Everything, from how we move goods to how we move ourselves around, is ripe for change.
Self-driving cars will require legislators to make new amendments to the current Highways Acts in place. There is already considerable debate surrounding the legal issues of driverless cars, the ethical concerns and questions over the liability of who to sue when a driverless car is involved in an accident.
Nevertheless the case for self-driving cars is considerable, the death toll (from motor accidents) is increasing worldwide with 1.3 million fatalities and 50 million injuries every year globally and around 93% of these accidents are caused by human error, and cost a staggering US$ 871 billion in the United States alone, according to the National Transportation Safety Board (NTSB) – self-driving cars will dramatically reduce accidents significantly. Autonomous cars will also reduce the burden on law enforcement, may also make streets safer and less congested, and allow those with disability greater movement – leading to a cleaner environment and improved quality of life.
Self-Driving Cars — Not if, but when
As well as the technical obstacles that are quickly being eliminated by manufacturers of self-driving cars, there are a few potential barriers that will delay the deployment or growth of self-driving cars, just as the ‘Red-Flag Act’ did in the 19th Century.
One such obstacle is Insurance Liability.
Lloyd’s of London, the insurance underwriter, has recently produced a report about how autonomous car technology will affect the insurance industry.
According to the report, insurance companies will have to create new methodologies on how they measure risk and charge motor insurance premiums:
There could be “significant changes in motor insurance: if accidents reduce in frequency, claims will also decrease, leading to lower premiums and, in turn, tighter profit margins for insurers.”
The report also highlights declining car ownership as potentially reducing the total number of insurance premiums:
Car ownership could decline in favor of a renting model and taxi companies could become owners of rentable car fleets, leading to company-wide policies.
With respect to insurance concerns Lloyds emphasized the problems with transferring risk from the driver to the machine:
With less reliance on a human driver’s input, however, increased risk would be associated with the car technology itself. Computers can do many things that a human driver cannot: they can see in fog and the dark, and are not susceptible to fatigue or distraction. However, they can also fail, and systems are only as good as their designers and programmers. With an increased complexity of hardware and software used in cars, there will also be more that can go wrong.
A new form of driving tests and licensing will be required:
By gradually transferring responsibility from the driver to the car, there is a risk that a driver could misjudge the responsibility they currently have… To mitigate this risk it is important that drivers are well-educated about the limitations of autonomous functions, and how they can retake control of the car when it is necessary.
When we rely on the car we may ‘switch-off’ and not be attentive to what is happening in the surrounding environment when it seems that their input is not needed.
If drivers are expected by law to supervise an autonomously operating car, they may find it difficult to remain focused on this task if they feel able to trust the car.
However the report does acknowledge the higher safety standards of autonomous vehicles:
The advent of autonomous cars could revolutionize the world of motor insurance. Autonomous cars could potentially lead to a substantial reduction in motor insurance claims.
Some might argue that if cars really do become crashless, there may not even be a need for motor insurance.
In many ways driverless cars may make assessments easier because it would be possible to see data such as what speeds the vehicles were travelling at.
An accident caused by autonomous technology, would need software and hardware analysis expertise in order to understand how and why it occurred. As sensors and computers become more commonplace in cars, and some driving responsibility is devolved to the car, an increase in telematics-based policies could be an option. Premiums could be better matched to exposure rather than based on proxies, and in the event of accidents, the car’s ‘blackbox’ could be examined. Whereas at present insurers using telematics devices incur the cost of their fitting, in the future the data may already be collected, making telematics a more viable option.
Whilst some analysts indicate self-driving cars will be on our roads in greater numbers with 3 to 7 years, it may be some time before the new technology earns the public’s trust. Lloyds also commissioned a Google Consumer Survey according to the survey, which was taken by 2,016 people in the UK, 50.4% male, 49.6% female.
People are uncomfortable placing their trust in a computer and they like the process of driving too much to give it up.
Automated driving will become progressively more standard in the near future, but it will require the development of high standard autonomous navigation systems and adequate safety standards, along with the implementation of new legal and licensing procedures. With a shift towards autonomous technology and away from human operators, the landscape of insurance, especially motor insurance, may change dramatically.
Picture source: 1st picture – Red Flag Act and 2nd picture Lloyds Report