- 0.1 1. Introduction
- 0.2 2. Volpe review
- 0.3 3. The NHTSA’s 2016 Federal automated
- 0.3.1 a. Vehicle Performance Guidance for Automated Vehicles (the “Guidance”)
- 0.3.2 b. Model state policy
- 0.3.3 c. NHTSA’s current regulatory tools
- 0.3.4 d. New tools and authorities
- 0.4 4. Standard 150: Mandating V2V communications
- 0.4.0.1 “We are carrying the ball as far as we can to realize the potential of transportation technology to save lives. This long promised V2V rule is the next step in that progression. Once deployed, V2V will provide 360-degree situational awareness on the road and will help us enhance vehicle safety. ”
- 0.5 5. V2I Guidance
- 0.6 6. Conclusion
- 1 B. Product liability concerning dedicated short range communication
- 1.1 1. Introduction
- 1.2 2. What is Dedicated Short Range Communications technology?
- 1.3 3. What are the product liability implications with using DSRC technology?
- 1.4 4. Conclusion
- 2 C. Cybersecurity
- 2.1 1. Introduction
- 2.2 2. DSRC and privacy
- 2.3 3. DSRC and cybersecurity
- 2.4 4. Conclusion
- 3 D. Intellectual Property
- 4 E. Corporate/M&A Issues and trends
- 5 F. Insurance
- 5.1 1. Introduction
- 5.2 2. Effects of autonomous vehicles on the insurance industry
- 5.3 3. Adapting to the future automobile insurance market
- 5.4 4. Conclusion
In January 2016, President Barack Obama unveiled an ambitious 10-year, US $ 4 billion investment to accelerate the development and borrowing of amply autonomous vehicles across the country. shortly thereafter, the National Highway Traffic Safety Administration ( “ NHTSA ” ), the agency within the U.S. Department of Transportation ( “ DOT ” ) tasked with reducing injuries and fatalities on the nation ’ second roadways, promised that “ within six months NHTSA will propose best-practice steering to industry on establishing principles of safe operation for in full autonomous vehicles. ”
former in 2016, the NHTSA took three significant steps toward curbing existing regulations that hamper the development of autonomous technology. First, in March 2016, John A. Volpe of the National Transportation Systems Center released a Review of Federal Motor Vehicle Safety Standards for Automated Vehicles ( the “ Review ” ) for the DOT. The Review details the existing safety standards that inhibit the sale of autonomous vehicles. Second, on September 20, 2016, the NHTSA released its first “ Federal Automated Vehicles Policy ” ( the “ Policy ” ). “ This policy, ” Secretary of Transportation Foxx said, “ is an unprecedented footstep by the federal government to harness the benefits of transformative engineering by providing a framework for how to do it safely. ” Third, on December 13, 2016, the NHTSA released a proposed principle ( “ Standard 150 ” ) that would make V2V communications mandatary on all new light-duty vehicles. “ Advanced vehicle technologies may well prove to be the silver bullet train in saving lives on our roadways, ” said NHTSA Administrator Mark Rosekind. therefore far in 2017, the NHTSA has continued its momentum towards utilizing newly engineering to improve safety by announcing new V2I guidance in January 2017 .
In final year ’ mho edition of this white newspaper, we noted that a comprehensive examination regulative model for autonomous vehicles was “ prominently absent. ” This end class, however, saw the advent of new policies and rules that represent significant growth in the regulative environment. peculiarly at the federal level, the Policy and Standard 150 may mark the begin of changes towards enabling the development of commercially-available autonomous vehicles. All parties seeking to participate in the autonomous fomite industry must understand the modern rules and policies put in place and their impact on the market .
2. Volpe review
The Review identifies a significant number of federal drive condom standards that, as they presently exist, could stand as a barrier to the exploitation of highly autonomous vehicles. The Review identifies all those rules that refer explicitly to a driver, for exercise.
The Review is peculiarly helpful for manufacturers in luminosity of the NHTSA ’ s holocene push for the consumption of interpretations of and exemptions from the Federal Motor Vehicle Safety Standards ( “ FMVSS ” ). By providing manufacturers a tilt of the FMVSS that may slow the development of autonomous vehicles, the DOT has handed manufacturers a laundry list of rules from which to ask for promote interpretations of, and exemptions from, while the industry waits for the FMVSS to be changed .
The Review concludes that there are few regulative barriers for autonomous vehicles to comply with stream FMVSS adenine long as the vehicle does not significantly diverge from a conventional vehicle design. Vehicles that tug the boundaries of ceremonious plan, however, “ would be constrained by the current FMVSS or may conflict with the policy objectives of the FMVSS, ” as many standards are based on assumptions of a human driver, for exercise .
As many manufacturers are looking to create the next generation of autonomous vehicles – vehicles that by definition push the boundaries of conventional design – it would behoove manufacturers to be aware of this Review and the FMVSS it lists .
3. The NHTSA’s 2016 Federal automated
“New vehicle technologies developed in the 20th century – from seat belts to air bags to child seats – were once controversial. But after having saved hundreds of thousands of American lives, they are now considered essential. ”
The Policy released in September 2016 is intended to foster the development of the autonomous vehicle industry. The policy contains four sections. First, the Policy outlines best practices for the safe pre-development blueprint, development, and testing of highly autonomous vehicles, or “ HAVs. ” While couched as “ guidance, ” this first base section describes raw reporting mechanism for manufacturers, and states that such coverage may be a requirement in the future. Second, the policy contains recommendations for the implementation of policies at a state level. Third, the Policy describes its stream regulative tools that manufacturers can utilize to change existing regulations to enable the exploitation and test of autonomous technology. last, the policy lists likely new regulative tools and authorities that, if implemented, could drastically change the automotive regulative environment .
a. Vehicle Performance Guidance for Automated Vehicles (the “Guidance”)
The Policy ’ s Vehicle Performance Guidance for Automated Vehicles broadly applies to all individuals and companies manufacturing, designing, testing, and/or planning to sell automatize fomite systems in the United States. Its reach extends not lone to comprehensive examination car manufacturers, but besides to all equipment designers and suppliers deoxyadenosine monophosphate well .
The part ’ mho Guidance is comprehensive. It includes all of the areas shown in Figure 1, downstairs. Its key addition, however, is the introduction of “ Safety Assessment Letters. ” Starting soon, the NHTSA “ will request that manufacturers and early entities voluntarily provide reports [ condom assessment letters ] regarding how the Guidance has been followed. ” The NHTSA advises that “ this report work may be refined and made mandate through a future rulemaking. ” Accordingly, manufacturers should consider implementing inner processes to appropriately complete the reports described within the Guidance .
trope 1. “ Guidance overview. ” Reproduced from the policy at 14. odd refers to “ Operational Design Domain. ”
Although such assessments should be gain and concise, it does not appear that these assessments will be simple – there are 15 areas of guidance to be analyzed, all of which are reflected in Figure 1. “ It is expected, ” the Policy states, “ that this would require entities to submit a safety assessment to NHTSA ’ sulfur Office of the Chief Counsel for each HAV system [. ] ” Manufacturers, consequently, may soon have to fill out a safety judgment for each HAV System for each steering area : data recording and sharing, privacy, vehicle cybersecurity, crashworthiness, ethical considerations, validation methods, and others. not alone will a safety appraisal necessitate to be submitted for each HAV System for each guidance area, but the NHTSA will expect manufacturers to update the assessment when any meaning update ( second ) are made to the fomite or HAV System .
The Policy indicates that in the come months, the NHTSA will implement respective steps aimed at facilitating the safety assessment work. These steps include publishing an objective method that manufacturers and other entities may use to classify their automated vehicle systems and publishing a condom assessment template. Manufacturers should be mindful, however, the NHTSA is expressly considering both mandating guard assessments and requiring any entity planning to test or operate HAVs on public roadways to register with the NHTSA and to document and report to the NHTSA items related to the Guidance .
b. Model state policy
In this second gear section, the Policy announces the DOT ’ s intention to regulate autonomous vehicles : “ DOT strongly encourages States to allow DOT alone to regulate the performance of HAV engineering and vehicles. ” The DOT points out that angstrom much as autonomous vehicle engineering is a revolutionary change in engineering, it need not herald any deepen in the regulative division of responsibility between the NHTSA and the States. “ The part of regulative duty for motive fomite operation between Federal and State authorities is clear [, ] ” the Policy reminds its readers, “ [ t ] hese general areas of responsibility should remain largely unaltered for HAVs. ”
Those areas of responsibility are as follows. Generally, NHTSA ’ mho responsibilities include :
- Setting FMVSS for new motor vehicles and motor vehicle equipment
- Enforcing compliance with the FMVSS
- Investigating and managing the recall and remedy of noncompliance and safety-related motor vehicle defects and recalls on a nationwide basis
- Communicating with and educating the public about motor vehicle safety issues
- Issuing guidance for vehicle and equipment manufacturers to follow
The States ’ responsibilities include other aspects of centrifugal vehicle regulations, as follows :
- Licensing (human) drivers and registering motor vehicles in their jurisdictions
Enacting and enforcing traffic laws and regulations
- Conducting safety inspections, where States choose to do so
- Regulating motor vehicle insurance and liability
In the policy, however, the NHTSA makes clear its see that “ the Vehicle Safety Act expressly preempts States from issuing any standard that regulates performance if that standard is not identical to an existing [ Federal Motor Vehicle Safety Standards ( “ FMVSS ” ) ] regulating the same aspect of performance. ” In a sentence that the NHTSA ’ south lawyers would have reviewed carefully, the Policy states that not only can state safety regulations not deviate from federal safety regulations, states can not implement any regulations that would, in any way, stand in the way of the federal safety regulations being followed to the fullest extent : “ The Supreme Court has besides found that State laws may be preempted if they stand as an obstacle to the skill and murder of a NHTSA condom standard. ”
The Policy then purports to provide guidance to the states on best practices when fulfilling their own responsibilities for motor vehicle regulations when it comes to autonomous vehicles, including, for example, that :
- Each State should identify a lead agency responsible for consideration of any testing of highly autonomous vehicles.
- Each State should develop an internal process that includes an application for manufacturers to test highly autonomous vehicles.
- Each manufacturer or other entity should submit an application to the designated lead agency in each jurisdiction in which they plan to test their highly autonomous vehicles.
- The lead agency should issue a letter of authorization to the manufacturer or other entity to allow testing in the State.
c. NHTSA’s current regulatory tools
In the third section, the NHTSA reviews the stream regulative tools at the disposal of concern parties, and encourages the use of those tools to further autonomous vehicle technology. specifically, the policy details three keystone regulative devices :
- Interpretations and exemptions for existing standards
- Rulemaking to amend existing standards or create new standards
- Enforcement authority to address defects that pose an unreasonable risk to safety
We discussed interpretations, exemptions, and rulemaking proposals in our beginning edition of this white composition. Since that edition, the basic model has remained in place, with minor tweaks aimed at streamlining the process. In particular, the NHTSA has stated its goal that it will respond to :
- Simple HAV-related interpretation requests within 60 days
- Complex HAV-related interpretation requests within 90 days
- Simple HAV-related exemption requests within six months
- Complex HAV-related exemption requests within 12 months
This third segment lays out the methods available to manufacturers and parties eager to proceed with the development and testing of autonomous vehicle engineering. concerned parties should thoughtfully consider their regulative set about, and seek steering regarding the tools at their disposal .
The fourthly and concluding segment of the Policy is aspirational. The NHTSA acknowledges that “ [ thyroxine ] he speed with which HAVs are evolving warrants a review of NHTSA ’ s regulative tools and authorities. ” As a consequence, it lays out a serial of likely new tools and authorities that may be utilized to speed regulative change and regulate autonomous vehicles, specifically :
- Safety assurances
- Pre-Market Approval Authority
- Cease-and-Desist Authority
- Expanded Exemption Authority for HAVs
- Post-Sale Authority to regulate software changes
- Variable testing procedures
- Functional and System Safety Reporting
- Regular reviews
- Additional recordkeeping/reporting
- Enhanced data collection tools, and others
The second of these authorities, in particular, is worth analyzing. The imposition of pre-market approval assurance would represent a drastic deviation from the current federal vehicle regulative scheme. presently, manufacturers selfcertify their vehicles as being in conformity with the FMVSS. Under a new, pre-approval model, “ rather than having HAV manufacturers certify that their vehicles meet applicable FMVSS, NHTSA would test vehicle prototypes to determine if the fomite meets all such standards. ” such a regulative tool would “ prohibit the industry, insertion into department of commerce, offer for sale, and sale of HAVs unless, anterior to such actions, NHTSA has assessed the guard of the fomite ’ sulfur performance and approved the vehicle. ” For vehicle manufacturers placing many models of new vehicles every year, such approval summons could be quite burdensome therefore potentially slowing the action by which autonomous vehicles make it to grocery store .
4. Standard 150: Mandating V2V communications
“We are carrying the ball as far as we can to realize the potential of transportation technology to save lives. This long promised V2V rule is the next step in that progression. Once deployed, V2V will provide 360-degree situational awareness on the road and will help us enhance vehicle safety. ”
On December 13, 2016, the NHTSA released a FMVSS Standard 150 for public comment – a new safety standard that, if adopted, would mandate the inclusion body of V2V Communications on all fresh light-duty vehicles. light-duty vehicles in the context of this rulemaking, refers to passenger cars, multipurpose passenger vehicles, trucks, and buses with a crude vehicle weight evaluation of 10,000 pounds ( 4,536 kilograms ) or less .
standard 150 would require vehicles to transmit messages about their rush, drift, brake condition, and other vehicle information to surrounding vehicles, and to be able to receive the lapp data from them. V2V range and “ field-ofview ” capabilities exceed stream and near-term radar- and camera-based systems, in some cases, providing closely twice the image. That longer stove and 360-degree field of “ scene, ” presently supported by DSRC, provides a platform enabling vehicles to perceive some threats that sensors, cameras, or radar can not .
The NHTSA believes the marketplace will not achieve sufficient coverage absent a mandate V2V capability for all new lightduty vehicles. A V2V system vitamin a presently envisioned would be a combination of many elements : a radio technology for the transmittance and reception of messages, the structure and contents of “ basic safety messages ” ( “ BSMs ” ) through a DSRC unit, the authentication of incoming messages by receivers, and, depending on a vehicle ’ south behavior, the trigger of one or more safety warnings to drivers .
The NHTSA proposal would require that vehicles be able of receiving over-the-air ( “ OTA ” ) security and software updates ( and to seek consumer accept for such updates where allow ). In accession, the NHTSA proposal besides requires that vehicles contain “ firewalls ” between V2V modules and other vehicle modules connected to the data busbar to help isolate V2V modules being used as a electric potential conduit into other vehicle systems .
The NHTSA is proposing that the effective date for manufacturers to begin implementing these new requirements would be two model years after the final principle is adopted, starting on September 1 following issue of a final predominate, with a three-year phase-in period to accommodate vehicle manufacturers ’ product cycles at rates of 50, 75, and 100 percentage, respectively. This proposed schedule allows for a total of five years until all new vehicles would be required to comply with the final rule. Assuming a final rule is issued in 2019, this would mean that the phase-in period would begin in 2021, and all vehicles subject to that final principle would be required to comply by 2023 .
The NHTSA estimates that the full annual cost to comply with this proposed mandate in the 30th class after it takes effect would range from US $ 2.2 billion to US $ 5.0 billion, corresponding to a cost-per-new-vehicle of approximately US $ 135- $ 300 .
5. V2I Guidance
In January 2017, U.S. Transportation Secretary Anthony Foxx announced new Federal Highway Administration ( “ FHWA ” ) V2I steering. The guidance consists of several resources aimed at both transportation planners and licensees, including :
A fact sheet describing the “benefits and challenges
associated with the deployment of connected and automated vehicles.”
A report on the findings and recommendations made in a
study of the impacts of connected vehicles.
- Technical memoranda useful for transportation planners.
- Guidance on licensing requirements related to DSRC Roadside Units.
NHTSA estimates that base hit applications enabled by V2V and V2I engineering could eliminate or mitigate the severity of up to 80 percentage of non-impaired crashes, including crashes at intersections or while changing lanes .
The past year has brought many changes at the federal level that impact the hypothesis of fully autonomous vehicles being commercially available in the United States. The NHTSA ’ s new policy suggests a willingness to work with manufacturers to utilize regulative tools to lessen the requirements of the FMVSS when such standards unnecessarily hamper the development of autonomous technology. similarly, the proposed Standard 150 and new V2I guidance suggests that the DOT is considering areas beyond the physical autonomous vehicle itself that would allow autonomous technology to even more dramatically improve safety and efficiencies. In this time of rapid change, anyone matter to in the progress of the technology is advised to keep abreast of new information coming from the DOT, and take the opportunity to provide remark and guidance to the DOT ’ second proposed regulative changes .
B. Product liability concerning dedicated short range communication
As technology swiftly advances, the once fanciful concept of self-driving vehicles will soon become a reality. autonomous vehicles are expected to be deployed on U.S. highways deoxyadenosine monophosphate early as this decade. These cars of the future will be equipped to react and respond to their immediate environment with little or no human interposition. Whether it be just a traffic light changing from jaundiced to red or a vehicle ahead coming to an abrupt discontinue, the autonomous vehicle will be amply train to handle the situation. It is expected that the high aptitude of these autonomous vehicles will not only make travelling on roadways more effective but besides safer with far fewer collisions. The basis of the vehicle ’ s ability to seamlessly navigate the highways rests on its communication capabilities. autonomous vehicles will be able to communicate with early vehicles on the road and transportation infrastructure. A key objet d’art of technology that allows for this continuous communication is DSRC .
2. What is Dedicated Short Range Communications technology?
DSRC is a bipartite short- to medium-range radio receiver communication channel that allows autonomous vehicles to communicate with one another deoxyadenosine monophosphate well as with transportation system infrastructure, such as dealings signals. Its assailable informant nature and use of a wireless spectrum to send and receive signals makes DSRC very exchangeable to Wi-Fi. DSRC has very abject reaction time, which allows messages to be transmitted within milliseconds with little to no stay. Because of its light to medium range, DSRC is highly secure with limited hindrance by unrelated signals. As opposed to the limitations of vehicular cameras and sensors, DSRC can offer 360 degree coverage that will increase base hit .
Semi-autonomous and autonomous vehicles will use applications as platforms for the DSRC technology. V2V and V2I applications will utilize DSRC to alert the drivers and, in fully autonomous vehicles, to respond to signals received by early vehicles and infrastructure. Certain V2V applications include : adaptive cruise command ; emergency electronic brake lights ; intersection bowel movement aid ; blind spot and lane change warnings ; forward collision warnings ; left turn aid ; do not pass warnings ; and vehicle turning properly in front of bus warnings. Certain V2I applications include : bolshevik light misdemeanor warnings ; stop sign of the zodiac aid ; reduced speed and work zone warnings ; curve speed warnings ; smudge weather impact warnings ; and pedestrian in signalize crossing warnings .
3. What are the product liability implications with using DSRC technology?
As with any new piece of advanced technology that enters the stream of department of commerce, questions regarding liability for accidents and injuries begin to arise. As of now, there have been no bright-line rules regarding liability for potential defects in the DSRC engineering. While the DSRC engineering is expected to make travel on the highways a lot safer and theoretically free from incident, many automotive manufacturers and indemnity companies are eagerly waiting to see how the states and union government will govern indebtedness issues .
a. Federal and state legislation
On September 20, 2016, the U.S. Department of Transportation ’ south NHTSA released the fresh Federal Automated Vehicles Policy. This policy offers guidance for how the federal politics plans to regulate autonomous vehicles. In the Policy, the NHTSA makes clear that it intends to focus on regulating the vehicle performance technology equipment while letting the states retain the world power to regulate product liability issues. For example, the Federal Communications Commission ( “ FCC ” ) dedicated 75 MHz of spectrum at 5.9 GHz to be used by DSRC. The states will have to decide who will be liable in a variety of scenarios. States will besides have to decide who will be required to carry motive vehicle policy .
b. Types of potential products liability defects with DSRC technology
All product liability claims have something in common – a product. however, akin to Wi-Fi, DSRC channels are not physically manufactured and are not tangible products. frankincense, plaintiffs are improbable to raise a product indebtedness challenge based on a blemish in the channels themselves. however, DSRC requires physical devices affixed to vehicles in decree to function. Defects in the hardware and software utilizing the DSRC technology could offer plaintiffs an avenue with which to anchor a intersection liability claim under state law .
A rising concern for an original Equipment Manufacturer ( “ OEM ” ) is the types of product indebtedness defects that could potentially arise with DSRC engineering. As a real product, hardware and software in the vehicle and the exile infrastructure will utilize DSRC. Should that hardware or software malfunction, and an accident occurs as a result, plaintiffs may look to product liability law for a remedy. In the absence of federal or state legislation, the traditional theories of merchandise liability will govern such incidents. In ordain for a plaintiff to allege a product liability claim against an OEM, the claim must be founded on one of the trace defects : 1 ) manufacture defect, 2 ) design blemish or 3 ) inadequate instructions or warnings .
A product “ contains a manufacture defect when the product departs from its intended design even though all potential care was exercised in the training and commercialize of the product. ” Thus, in regards to the hardware within the autonomous vehicle, a plaintiff may assert a fabricate blemish by proving that the hardware utilizing DSRC did not function as specified by the OEMs .
A plaintiff may allege a invention defect if the plaintiff can show that the design of the hardware posed foreseeable risks that could have been avoided or at least reduced by a “ reasonable option design. ” The plaintiff would have the high burden of proving that the defective design of the hardware utilizing DSRC caused the accident and the accident could have been prevented with a safe blueprint. With the freshness of DSRC and its components, design defect may be unmanageable to prove .
last, a plaintiff may allege a blemish in the hardware utilizing DSRC by arguing that the OEM failed to adequately and sanely warn consumers of the foreseeable damage posed by the engineering .
The failure to provide these warnings must be what makes the product insecure and therefore the campaign of the accident .
It may be more unmanageable for a plaintiff to prove a defect in the software part of DSRC. Software is created from codes and modules. It is written rather than manufactured ; therefore, it may be challenging for plaintiffs to invoke a manufacture blemish against DSRC software .
A plaintiff may be able to prove design blemish in the DSRC software against OEMs if the algorithm were designed with a foreseeable risk of danger. however, the software written to hold the DSRC for autonomous vehicles is indeed building complex and innovative that it may be a challenge for a plaintiff to find a certified technical to prove that there was a safe option invention .
possibly the least complicated of the defects that a plaintiff could prove to substantiate a software product liability claim against an OEM is the failure to warn. The OEM should provide some type of warning regarding the foreseeable injury that could result from use of the DSRC software engineering. The sufficiency of the warning may be dependent on a variety of factors such as : the product or technology description, market and sales materials, the reasons people are buying and using the DSRC technology, and the nature and extent of the instructions and warnings provided. OEMs may encounter a challenge with making the admonitory blatant enough as to alert consumers of the electric potential risks with using DSRC software. Because the DSRC software would be so integrate into the autonomous vehicle, it would not be readily apparent to the exploiter. additionally, OEMs may have a responsibility to provide post-sale warnings of newly discovered risks with the DSRC software. If OEMs become aware of potentially harmful software issues, they would probably besides bear the burden of supplying software upgrades angstrom promptly as possible .
c. Challenges with the DSRC technology
Although the use of DSRC channels with autonomous vehicles is said to provide enhance guard on the highways, there are impending issues involving the engineering that have yet to be resolved. For example, former Assistant Secretary of the U.S. Department of Transportation Office of Research and Technology, Gregory Winfree, stated that his function was concerned about DSRC transmit sharing the 5.9 GHz spectrum with other wireless communications. Making certain early function of the spectrum does not inundate the radio-frequency or inhibit DSRC performance will be a high precedence for the DSRC technology engineers and OEMs .
A challenge for manufacturers of autonomous vehicles to overcome is ensuring state and local representation resources to maintain the transportation infrastructure. In order for autonomous vehicles to fully utilize DSRC technology and reach their ultimate potential, there must be fare infrastructure in seat to communicate with the vehicles on the road. State and local anesthetic governments would have to commit to maintaining infrastructure that could communicate with the V2I applications of the autonomous vehicles .
OEMs and software engineers of semi-autonomous vehicles will have to make certain the DSRC communications elicit an appropriate answer from the human driver. As the V2V and V2I applications send and receive signals, the triggers and consequence flags must be blatant adequate that a human driver is appropriately alerted. The triggers and flags must besides by rights instruct the human driver on precisely how to respond to the environment around it. The human interaction necessary in semi-autonomous vehicles besides poses some unanswered questions such as who would be liable in the event of a collision .
d. Who could be liable?
Another major concern for OEMs is what parties may be apt if an incident occurs regarding the DSRC technology. Regarding driverless vehicles, there are four main categories of parties that could potentially be apt in a cable car accident : the manufacturers, the fomite owners, the operators, or the passengers. however, it is potential that the manufacturer of the DSRC part part may not besides be the manufacturer of the autonomous vehicle .
There have been several analogous product indebtedness cases where a component part of the vehicle that was not manufactured by the vehicle manufacturer was bad and induce injury to the plaintiff. In a few cases involving defective tune bags that injured the plaintiff, the plaintiff sued the manufacturer of the fomite angstrom well as the manufacturer of the breeze bags. similarly, if there was a defect in the DSRC engineering and the manufacturer was not besides the autonomous vehicle manufacturer, a plaintiff would likely attempt to drag both into court. Whether or not the plaintiff would succeed in the lawsuit would be fact specific and dependent on the police of the jurisdiction .
In semi-autonomous vehicles, plaintiffs and manufacturers may encounter a problem with determining whether the operator or manufacturer was at blame. If the DSRC technology sends a sign for the operator to respond to but the operator fails to do sol resulting in an accident or injury, a doubt of whether the manufacturer should in truth be apt could be a electric potential defensive structure. Manufacturers only have a duty to shield against pervert of the product to the extent that could have been sanely anticipate. If the DSRC properly sent the signal, it would be unmanageable for a plaintiff to prove that there was sincerely a defect and the hustler may actually be liable for the wound that resulted. however, the manufacturer may besides have the burden to prove that the plaintiff ’ randomness misapply and failure to follow the instructions given by the autonomous engineering was not foreseeable. The manufacturer may besides have to prove that the instructions and warnings given were conspicuous adequate as to actually alert the operator of the vehicle. The level of proofread to substantiate these claims and defenses may be so complex that the parties to the litigation may need a highly skilled adept .
DSRC will be the cornerstone for making an autonomous vehicle fully interoperable with the stallion transportation system organization. This up-to-date technology presents an array of fresh legal issues and questions that soon must be answered. With the speed at which the engineering is developing, regulative agencies, legislative bodies, and courts will have to decide how they wish to marry product liability law with the DSRC equipment in autonomous vehicles. In the past, product liability law has proven to adjust to advanced engineering effortlessly and will probably do the same with DSRC engineering in the future .
A samara part of achieving the goal of autonomous vehicles is allowing the cars to communicate with each other and the infrastructure while they operate to better navigate the populace around them. Achieving this goal of Vehicle-to-Vehicle ( V2V ) and its relate Vehicle-to-Infrastructure ( V2I ) communications, however, requires a dangerous consideration of the risks related to potential or actual breaches of data privacy and cybersecurity .
In the United States entirely, four different but relate federal regulators are working on versatile aspects of DSRC privacy and security : the U.S. Department of Transportation, the Federal Communications Commission, the Federal Trade Commission, and the National Highway Transportation Safety Administration. The diligence, however, is not standing however and has begun implementing DSRC technology a well as other communications technologies for their respective vehicles .
The current miss of standards requires a thorough follow-up of the privacy and cybersecurity risks and how the company may best work to minimize them .
2. DSRC and privacy
privacy risks relate to personally identifiable data collected and transmitted by and through the V2V or V2I communications, such as fomite identification numbers and information about the owner of, or passengers in, a vehicle. generally, the privacy risks associated with these communications can be separated into five categories :
a. Gathering unnecessary information
Although DSRC chiefly enables the transmittance of base hit information, it allows for other types of information to be collected and transmitted. The Federal Trade Commission has long taken the position that companies have an obligation to provide fair security for the personal information that they collect. respective state laws require companies to provide reasonable security for personal information. The FTC has besides taken the position that the types of personal information collected must be disclosed to individuals. Companies may wish to monitor the development of regulations in this sphere to ensure that the collection of information is conducted legally, as it is potential that future regulations could provide liability even for the unlawful collection of information. For example, in the context of websites and on-line services, the Children ’ s Online Privacy Protection Act restricts the ability of companies to collect data from children under 13, subject to penalties of up to $ 16,000 per violation. accordingly, companies may wish to avoid collecting unnecessary information .
b. Performing undisclosed or unlawful data analysis
If personally identifiable information is collected, the ship’s company must disclose its habit of the data. Companies must besides comply with early laws that may apply to the data. For example, Facebook was accused of analyzing private communications between its users, and the class action claimed this analysis was in misdemeanor of wiretapping laws. A $ 3.3 million proposed colony is pending. Liability for privacy issues tends to correspond with the operate exercised over that information and the extent to which a party uses personally identifiable information for its own purposes. For example, even one of the strictest U.S. privacy laws, the Health Insurance Portability and Accountability Act ( HIPAA ), includes an exception for conduits, which is defined as “ a conduit transports information but does not access it early than on a random or infrequent basis as necessary for the performance of the transportation system service or as required by law. ” On one extreme, a company generally can lower its risk profile by acting as a mere conduit for data ; yet companies typically can legitimately analyze data passing through their system when they make adequate disclosures of their commit, or have contractual or legal authority to analyze the datum .
c. Retaining information
If personally identifiable information is retained, the gamble associated with that memory effectively increases as the period of retention increases. This is because the risk of unauthorized access to that data increases with both the volume and time of the data stored. Cybersecurity incidents resulting in unauthorized access to personally identifiable information may require that the company to notify affect individuals, regulators, and law enforcement. If a consumer learns that a company has retained information without a “ want to know ” it, and some event results in unauthorized entree of that information, tort actions can follow, based on transgress of privacy or breach of right of promotion .
A party can decrease its risk of privacy-related actions by retaining data entirely for angstrom retentive as there is a commercial enterprise motivation for the information, and then destroying the datum or anonymizing it in a manner that it is improbable to be reconstituted .
d. Sharing information
The FTC expects companies to explain how they share personally identifiable information with third parties for those parties ’ own purposes, such as send market or exploiter profile or analytics. recently, two U.S. Senators expressed concerns to the Federal Communications Commission that “ business could collect and analyze sensitive driving information, such as where the vehicle travels and how long it stays there, without the cognition or consent of the consumer and then send target advertisements via dashboard consoles, in-car entertainment systems, or digital billboards. ”
Although steering on privacy requirements regarding information sharing for V2V and V2I is not a top precedence for regulators, legislators and regulators have addressed information share in other context. By way of exercise, health information governed by HIPAA or children ’ south information governed by COPPA, requires prior consumer accept to be shared .
The determination of DSRC is to share data, quickly, and chiefly for guard reasons. Although it may be potential to easily disclose information regarding data sharing practices to the owner of a vehicle, it may be more unmanageable to disclose this information to early individuals whose personal information could be at emergence, such as non-owner drivers or passengers .
The type of data collected and how it is shared can lead to liability. For case, the FCC settled with Verizon Wireless for $ 1.35 million for using a “ supercookie ” that was installed on consumers ’ computers without their accept, and shared information about the consumers ’ on-line activities with third parties. In April of 2017, the Massachusetts Attorney General reached a colonization with an advertising company that was using geofencing engineering to benefit its customers by sending digital ads to consumers who were at or near generative health centers and methadone clinics in respective cities. The Attorney General claimed that these actions violated Massachusetts consumer auspices laws and enjoined the practices. Courts can impose preliminary and permanent injunctions vitamin a well as other monetary penalties, including substantial regulative fines .
Limiting the risk in this area can be accomplished by minimizing the data that is collected and shared to lone that information that is necessary for the fomite to perform the ask officiate. For exercise, V2V and V2I communications require that vehicles be able to communicate hazards or other obstacles to other drivers in club to minimize any impact on the flow of traffic. That functionality does not require any specific identification of vehicles or individuals. Of course, with appropriate disclosures and contractual provisions, companies may be able to partake personally identifiable information with third base parties for their own purposes .
unnecessary collection and sharing any such recognition information could lead to indebtedness under the Federal Communications Act, the Federal Trade Commission Act, HIPAA, COPPA, express consumer protective covering laws, and/or state tort laws. Companies should therefore consider whether they should avoid collecting or sharing this type of information .
e. Information gathered by suppliers through their components
now more than ever, manufacturers are purchasing components that have their own independent ability to obtain, shop, and share data about those who interact with it. As a leave, there can be privacy and security risks in a company ’ s own issue chain for which they may be held responsible .
Both the Federal Communications Commission and Federal Trade Commission have brought regulative proceedings against companies for the actions of their suppliers or advertisers ( such as the Verizon Wireless “ supercookie ” example, where an advertiser reportedly was misusing the datum from the supercookie ), as have individual plaintiffs ( as was the case where supplier Actiontec provided an candid reference component in routers, which Verizon distributed to customers—both Actiontec and Verizon were sued ). A company can help lower its risk by reviewing and auditing its suppliers to make certain that the caller understands what each supplier is providing, whether the supplier is independently collecting any data from the company ’ sulfur use of its merchandise or services, and, if therefore, how the supplier is using, sharing, or further disclosing the datum .
3. DSRC and cybersecurity
As with the data privacy issues concerning V2V and V2I engineering, as the communications capabilities in automobiles continue to grow, so do the cybersecurity risks. DSRC technology, however, makes these risks peculiarly acute. By its very purpose, DSRC is meant to communicate with others very quickly. There may be no time or practical ability to screen the messages for spoof or malicious subject. As a solution, these communications pose a alone opportunity for bad actors to use them as attack vectors or listening posts for personal information .
Any such breaches can result in a diverseness of reactions, none of which are mutually single which individually can result in significant costs and expenses, and jointly can be devastating. For example, the Federal Trade Commission or department of state Attorneys General a well as any other regulators are increasingly pursuing companies for such breaches. furthermore, secret actors, including class legal action plaintiffs and fiscal institutions ( banks and citation poster companies ) now seek reimbursement for any breach and pursue their own secret actions in order to address their grievances. In addition to these legal actions, upon learning of a particular transgress, companies frequently take their own mugwump steps in an effort to address the PR issues raised by those intrusions, including setting up call centers, providing credit monitor, auditing and investigating their operations american samoa well as increasing data security and education. These already significant costs do not include the early harder-to-quantify costs, such as lost employee productiveness, lost customers, and increased customer acquisition costs .
One particular model of how the costs surrounding these incidents can arise is the 2013 security rupture suffered by retailer Target Corporation. target had agreed to share narrow management data with a little HVAC seller, but that connection was sufficient for a hack to get into Target ’ second systems and steal credit card information. As a result, according to Target ’ s publicly filed SEC documents :
More than 100 actions were filed in courts in many states.
One lawsuit was filed in Canada.
- Claims have been asserted on behalf of customers, payment card issuing banks, shareholders or others seeking damages or other related relief allegedly arising out of the data breach.
- State and federal agencies, including the State Attorneys General, the Federal Trade Commission and the SEC, launched investigations related to the data breach, including how it occurred, its consequences and Target’s response.
More than three years after the breach occurred, in its 10-K filed on January 28, 2017, Target reported that, since the data breach, Target incurred accumulative expenses of $ 202 million .
Of potentially even greater concern are risks to life and limb that may arise from the exploitation of electric potential vulnerabilities in V2V and V2I communications. It is conceivable that hackers could tamper with such communications to cause fomite crashes or other property wrong. This hazard is not theoretical : in 2015, hackers were able to remotely take control of a Jeep vehicle, leading to a recall of 1.4 million vehicles.
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As with data privacy, the issues surrounding these communications can be grouped into four categories :
a. Securing the data
presently, the lack of common standards means that automotive communications presently are brand specific – Brand A vehicles communicate only with other Brand A vehicles. This allows particular manufacturers to develop and implement their own communication protocols, including the character of encoding used to protect the communications streams and the data within them. In order to achieve the National Highway Transportation Safety Administration ( NHTSA ) goals of avoiding the about 80 percentage of fomite accidents by implementing V2V communications, the interoperability of these systems must continue to rise .
Until such time as industry standards or regulations exist, companies can minimize the risk of unauthorized access to the data sent from vehicles by encrypting the datum .
b. Protecting the data
To the extent that personal data must be retained at all ( see above ), companies may wish to consider encrypting data “ at rest ” ( i.e., when the data is not in habit ) to help minimize the risk of unauthorized access to the data. code can besides help reduce the indigence to provide notices under many state breach presentment laws .
c. Ensuring legitimacy and preventing spoofing of messages
NHTSA ’ s proposal includes the function of digital certificates that carry a vehicle ’ randomness pseudonym as a think of of authentication, plus a form of cross-check with other receive messages or onboard fomite sensors. not entirely does the NHTSA method use a “ minimum necessary ” amount of information, it besides provides for multiple security system certificates, so that each message would have a randomly selected certificate to provide far protection of the vehicle ’ s and driver ’ s identifying information. At this point, companies may not be uncoerced to incur the costs of this form of security. rather, until industry standards or regulations exist, companies can try to minimize the risk of unauthorized messages by “ whitelisting ” trusted data sources and alone accepting messages from those sources. however, such an approach path may be penny-wise and pound-foolish –one of those sure sources could be hacked or receive a spoof message, putting the stallion entrust network at risk .
d. Ensuring the integrity of the communications protocol
Companies besides should ensure that the integrity of the communications protocol is maintained. late headlines have shown how hackers can compromise Internet of Things ( IoT ) devices and re-purpose them to conduct defense of overhaul ( DoS ) attacks. Such a gamble is of adequate business with respect to V2V and V2I communications. For exemplar, hackers conceivably could conduct DoS attacks on the V2V and V2I communication network, preventing or delaying vehicles from transmitting safety information. Companies may wish to implement firm safeguards for the communications protocols to help guard against DoS attacks and to help recognize or disregard base hit messages that may have been delayed by an overburden communications protocol. Using full-bodied hardware security modules to safeguard and manage the device ’ sulfur digital keys would besides help increase security, and they typically provide evidence of meddling .
autonomous vehicle manufacturers and their component suppliers should continue to monitor the legal and regulative landscape relating to their manipulation of consumer data and cybersecurity protocols. Because even “ minor ” cyber-incidents can result in the significant loss in clock time, money, and resources, efforts should be made to manage and minimize the risks related to this engineering .
D. Intellectual Property
Driver aid technologies such as adaptive cruise control ( “ ACC ” ), automatic emergency brake ( “ AEB ” ), and lane keeping help ( “ LKAS ” ) are becoming common “ engineering packages ” in many cars sold today and, finally, will become standard features in all vehicles. These available technologies allow a car to “ see ” what is happening in the environment around it. however, these technologies are limited by the capabilities of the sensors upon which they rely for input. The radar detector on the front of a fomite with ACC and AEB may be obscured by road dirty, glare, or early obstacles. Further, the laser discharge from a LIDAR detector may be obscured by environmental conditions such as rain or snow .
To not only combat the shortfalls of vehicle sensors but besides allow these technical wonders to fulfill their fully potential, the future progress towards the wax automation of vehicles will be the connected vehicle ( “ CV ” ), a car capable of “ listening ” and “ talk ” to the vehicles around it. A method acting being developed for V2V communication is via DSRC. This technology will soon be hitting the car market. The NHTSA has initiated the rulemaking march for issuing a new FMVSS, No. 150, which would require that all new light vehicles be capable of V2V communications. At least one manufacturer, Cadillac, stated that it would begin selling a V2V-enabled car in the U.S., the Cadillac CTS .
2. Dedicated Short Range Communication
a. DSRC Network
The DSRC network is, broadly, a wireless ad hoc network ( WANET ). A WANET is a decentralize net that lacks existing infrastructure or fixed nodes such as fix routers or access points. With DSRC, each fomite is a network node, and as such, each vehicle may receive and transmit messages to other vehicles. Because the fomite nodes may besides retransmit messages, DSRC is a mesh topology network, in which each vehicle passes data throughout the network. A key property of the ad hoc network is the ability of each vehicle member to automatically develop a communication link for the temp communication with other vehicle members, all of whom are continually and dynamically entering and departing the network .
DSRC can be further categorized as a mobile ad hoc network ( MANET ) because the network members are mobile, and in particular, it can be categorized in a subclass of MANET – vehicular ad hoc network ( VANET ) .
b. DSRC radio spectrum
The DSRC net is based upon radio communication in the superintendent high frequency ( “ SHF ” ) radio spectrum, and in particular, includes seven channels reserved by the FCC amongst 75 MHz of the 5.9 GHz band ( 5.850-5.925 GHz ). Based upon typical signal forte, the compass of DSRC is approximately 1,000 meters ( slenderly more than a one-half mile ) .
The 5.850-5.925 GHz radio spectrum is divided between Federal operations and non-Federal operations. For Federal operations, the 5.850-5.925 GHz radio spectrum is reserved for Radiolocation Service, which is predominately used by the Department of Defense for radar applications. For non- Federal operations, the 5.850-5.925 GHz radio spectrum is primarily reserved for Mobile and Fixed Satellite Services, and on a secondary coil basis, Amateur Radio Service. early devices operating within the 5 GHz spectrum include Wi-Fi-enabled radio receiver networks, cordless telephones, and fix outdoor broadband transceivers used by wireless internet providers. recently, internet services providers have requested that the 5.850-5.925 spectrum besides be made available for radio receiver broadband, a request that may impact the handiness of the spectrum for DSRC .
The Mobile Service section is reserved for DSRC and the Intelligent Transportation System ( “ ITS ” ) radio service. The FCC established the 5.850-5.925 GHz band for ITS services in 1999, and subsequently began developing standards for DSRC operations. The FCC established service rules and license for DSRC in 2004 .
DSRC is divided into seven 10 MHz channels ( 172, 174, 176, 178, 180, 182 and 184 ) along with one 5 MHz transmit ( 170 ). The individual 5 MHz segment is reserved for future emergence and growth. The FCC has designated channels 172 and 184 for Public Safety and channel 178 as a control channel. There is the electric potential for some 10 MHz channels to be combined to create up to two 20 MHz channels ( 175 and/or 181 ). The stream bandplan is illustrated below :
c. DSRC operating standards
In order for vehicles to communicate with one another on a VANET, they must inaugural speak the same terminology. One such standard bearer for a common vehicle linguistic process is the copulate of SAE International publications J2735 and J2945, which define a standardized system of message sets for carrying information between vehicles. The message sets standardize the message exchanges, messages, data frames ( complex elements ) and datum elements ( atomic elements ) for use on the 5.9 GHz Dedicated Short Range Communications spectrum. One emblematic message format, the Basic Safety Message, is discussed below .
The rules for the radio receiver connection of vehicles on the DSRC network are standardized by IEEE 1609 and IEEE 802.11p. IEEE 802.11p is an amendment that adds Wireless Access in Vehicular Environments ( “ WAVE ” ) to the existing 802.11 standard. 802.11 may sound familiar because it is the standard by which radio routers operate ( for example, 802.11a, b, gravitational constant, newton, and so forth ). IEEE 802.11p is crucial because it updates the media access see ( “ MAC ” ) requirements of the 802.11 standard to allow a fast act fomite to quickly pass information without the requirements of association and authentication. 802.11p is designed for vehicles moving at speeds of up to 250km/h and at a crop of up to 1,000 meters .
IEEE 1609 is a family of WAVE standards ( P1609.0, P1609.1, P1609.2, etc. ) which supplement 802.11p with high layer messaging. The IEEE 1609 standards allow V2V and V2I radio communications by providing higher level messaging beyond that provided by 802.11p .
For model, IEEE 1609 provides multichannel operation, network services, resource coach and security services, and allows WAVE to offer services such as vehicle safety, automated toll, enhanced navigation, and traffic management .
d. DSRC messaging
The Basic Safety Message ( “ BSM ” ) is the primary message for V2V communication. The BSM is transmitted approximately ten times per second by a vehicle and includes high priority data elements such as a timestamp along with the vehicle ’ s placement, guidance, amphetamine, acceleration, brake condition and vehicle size. The BSM may besides include other optional information based upon events such as the energizing of anti-lock brakes, outside lights, wipers/rain detector, roadway friction, tune temperature, air pressure and the vehicle ’ s gape rate. The optional information may not be transmitted equally frequently as the high priority data elements, depending upon the priority of the data. DSRC equipped vehicles do not have memory for the long-run archive of the BSM data. In addition to BSMs, other messages defined by J2735 include :
- Emergency Vehicle Alert (EVA)
- Intersection Collision Avoidance (ICA)
- Map Data (MAP)
- Common Safety Request (CSR)
- NMEA (“National Marine Electronics Association”) Corrections (NMEA)
- Probe Data Management (PDM)
- Probe Vehicle Data (PVD)
- Road Side Alert (RSA)
- RTCM (“Radio Technical Commission for Maritime Services”) Corrections (RTCM)
e. DSRC hardware
The first Tier 1 supplier to supply Vehicle-to-everywhere ( “ V2X ” ) communications to a U.S. production fomite is Delphi Automotive, who will provide the V2X module for the approaching Cadillac V2V-enabled models. The V2X communication chopine being supplied by Delphi is based upon a RoadLink™ chipset from NXP Semiconductors vitamin a well as the remaining hardware and application software from Cohda Wireless .
As seen by the example above, a V2X faculty requires little space. A V2X module – such as the Cohda Wireless module above – may include multiple IEEE 802.11p radios, a processor for operating the V2X software and associate applications, a GNSS aligning system with lane accuracy, along with security key storage and hardware acceleration. V2X modules may be either Roadside Units ( “ RSU ” ) or On Board Units ( “ OBD ” ), such as the one pictured above. OBD V2X modules receive their vehicle information from the vehicle ’ s control faculty, which is the hub for the respective driver aid sensors .
f. DSRC Competition
mobile providers have recently begun advocating in earnest for an option to DSRC using cellular capabilities, such as 4G LTE. They argue that stream cellular device technology is well established and always improving, and as such, would take minimal development to apply the technology to V2X communication. cellular component providers are quickly developing technology for the V2X market. For example, Qualcomm recently introduced a new Snapdragon LTE modem to support V2X communications .
DSRC and LTE are not necessarily mutually exclusive. Delphi recently announced that it has partnered with AT & T and Ford to enhance the range of DSRC by incorporating LTE, which the partnership displayed at the 2017 CES. trade usher in Las Vegas .
3. Procurement trends
a. Patent classification
DSRC does not have its own patent classification in either the U.S. Patent Classification system ( “ USPC ” ), concerted Patent Classification system ( “ CPC ” ), or International Patent Classification system ( “ IPC ” ). The patent classify G08G 1/01 is sanely apprised to include most patent applications with DSRC-related claims. G08G0001160000
|IPC/CPC patent classification for DSRC|
|G08G: Traffic control systems|
|G08G 1/00 Traffic control systems for road vehicles|
|G08G 1/16 Anti-collision systems (road vehicle drive control)|
|[CPC Only] G08G 1/161 Two-way communication between vehicles|
|[CPC Only] G08G 1/162 Two-way communication between vehicles determined or triggered by an event like turning, braking, …|
|[CPC Only] G08G 1/163 Involving continuous checking|
IPC results, G08G 1/16. We began our patent procurement analysis with the filters shown in the table below .
|Country code: U.S.|
|Filing date: January 1, 2010-October 1, 2015 (18 months prior)|
|Patent classification: IPC G08G 1/16|
Using these three filters, we found 1,400 patent applications divided across 1,245 families. The top five assignees are shown below .
CPC results, G08G 1/16. We adjacent used the like filters as above, but exchanged the IPC classification with the CPC classification, as shown in the postpone below .
|Country code: U.S.|
|Filing date: January 1, 2010-October 1, 2015 (18 months prior)|
|Patent classification: CPC G08G 1/16|
For CPC G08G 1/16, we found 2,105 patent applications divided across 1,770 families. The top five assignees remain the same, although their ranks do change compared with the IPC results. besides notice that the CPC results provided slightly greater results than the IPC results .
CPC results, G08G 1/161. CPC course G08G 1/161 is a subset of G08G 1/16. only the CPC classification has sub-classifications of G08G 1/16, not the IPC. We used the lapp filters as CPC G08G 1/16 filters, but far refined the CPC categorization to G08G 1/161 .
|Country code: U.S.|
|Filing date: January 1, 2010-October 1, 2015 (18 months prior)|
|Patent classification: CPC G08G 1/161|
For G08G 1/161, we found 538 patent applications divided across 461 families. The top five assignees do change, although four of the five assignees remain the like .
CPC results, G08G 1/162. CPC class G08G 1/162 is a subset of G08G 1/161, in which the bipartite communication between the vehicles is prompted by an consequence, such as brake or turning .
|Country code: U.S.|
|Filing date: January 1, 2010-October 1, 2015 (18 months prior)|
|Patent classification: CPC G08G 1/162|
CPC results, G08G 1/163. CPC class G08G 1/163 is besides a subset of G08G 1/161, in which the bipartite communication is continuous .
|Country code: U.S.|
|Fling date: January 1, 2010-October 1, 2015 (18 months prior)|
|Patent classification: CPC G08G 1/163|
For G08G 1/163, we found 288 patent applications divided across 247 families. The exceed five assignees again change. Toyota reappears and Bosch does not make the clear five .
E. Corporate/M&A Issues and trends
The automotive industry ’ s autonomous vehicle revolution has spurred the most active agent several years of automotive supplier and automotive manufacturer acquisitions, partnerships and investments in a decade, with more coming as parts makers struggle to keep up with the pace of technical transformation .
Vehicle connectivity, safety and efficiency are emerging as major drivers of emergence and change in the automotive industry and are helping fuel growing M & A, investing and collaboration activity in the diligence. Connecting vehicles to each early, to other road users, and to the surrounding infrastructure will be increasingly significant as other exile technologies pervade the marketplace, peculiarly, fomite automation. Vehicle-to-vehicle ( V2V ) and vehicleto- infrastructure ( V2I ) engineering, two aspects of what are jointly referred to as vehicle-to-everything ( V2X ) communication engineering, allow vehicles to communicate with each other and with wayside infrastructure. These technologies provide the capability of alerting or warning drivers of surrounding conditions or hazards and have the potential to prevent accidents, save lives, reduce energy consumption and improve traffic flow .
The leading standard in V2V and V2I engineering is Dedicated Short Range Communication ( DSRC ), one method of communication for autonomous vehicles. however, in the time it has taken for DSRC to develop and gain a bridgehead in the field, other communication channels, like cellular, have emerged as late newcomers but potential alternatives to DSRC. Though DSRC continues to be the frontrunner for standardize automotive communication moving forward, transactions in this space are proceeding on the basis that careless of the particular communications engineering use, V2V and V2I will be needed. As such, gaining access to relevant technologies such as sensors, semiconductors, GPS mapping systems, telematics, data science and other connectivity solutions will be critical for original equipment manufacturers ( “ OEMs ” ) and traditional suppliers .
While partnerships between or among automakers, suppliers, telecommunication providers, ride-sharing companies and big engineering firms outside of the automotive quad have grown recently in the self-driving car sector, a large number of startups developing V2X components, software and connectedcar products and technologies, some of which use DSRC, have emerged as targets for skill, partnership or investing opportunities for industry players. These startups are increasingly dealing with the write out of whether to sell their technologies, partner with automakers, OEMs, larger engineering companies or others, and/or accept funding from bodied strategic investors .
2. Dedicated Short Range Communication; Select corporate transactions
DSRC is a bipartite short to medium stove wireless communications capability. Using DSRC-based engineering, vehicles can exchange data between one another such as placement, steering, accelerate, acceleration and brake, with data that is updated and broadcast up to 10 times per second, helping to identify risks and provide warnings to drivers. As opposed to the limitations of vehicle sensors and cameras, DSRC can offer 360 degree coverage that will increase safety. The U.S. Department of Transportation paved the direction for fomite communication standards by developing the Federal Motor Vehicle Safety Standard, No. 150, on V2V communications. Published in the Federal Register in January 2017, the proposed standard would require manufacturers to begin installing DSRC radios in modern unaccented vehicles two years after the final examination dominion is adopted, with a three yearphase in period. If the proposed convention becomes standard, it would be a big succeed for DSRC module manufacturers, among others. According to Navigant Research, ball-shaped gross from DSRC-based V2X systems is expected to surpass $ 25.5 billion by 2025. Under the modern administration in Washington, it is not clear if and when the proposed criterion will get the final approval. additionally, while DSRC is now well-defined and being tested for deployment, a number of mobile providers and other companies are pushing for the consumption of next-generation cellular engineering rather. however, cellular standards have not even been developed and widespread network deployment is still several years aside. Whether the future standard of vehicular communication will be DSRC, cellular, both, or one or more alternative technologies remains to be seen .
What is open, however, is that the regulative landscape is in blend and that in the absence of clear regulation standards, the diligence is likely to move fore with deployment of more than one V2X technology. consequently, it is apprehensible why many companies in the automobile, telecommunications and engineering industries are investing in research and exploitation or technology startups, or engaging in acquisitions or collaborations to benefit from their respective capabilities and forming potent alliances in the plug in vehicle space .
To date, there have been entirely a few bodied transactions specifically in the DSRC space. One reason is that many of the component manufacturers have DSRC activities which they develop in-house. additionally, corporate transactions in the DSRC space are difficult to detect, because there are very few DSRC-specific entities. Most businesses offering automotive communications products describe their commercial enterprise as V2V/V2X or, plainly, as radio communications. conversely, because of that generalization, it is not excessive to speculate that some businesses that describe their products as V2V/V2X are in some kind or fashion utilize or differently involved with DSRC. Based on that assumption, we prepared and attach hereto as display A, a table of blue-ribbon holocene corporate transactions in the V2X space that relate to or are reasonably probably to be connected to DSRC technologies. As is discernible from the board, these corporate transactions have varied across numerous factors. Transactions have varied in size, ranging from a few million dollars to those valued at many billions ; they have spanned assorted industries, with transactions linking software providers, satellite communication specialists, semi-conductor producers, and automakers ; and they have differed in transaction form. It is well-defined that there is no one-sizefits-all approach to this developing area .
3. Technology startups are playing an increased role
in the car connectivity solution Technology startups are increasingly being looked to as part of the car connectivity solution by the major automakers and participants in the automotive provide chain, american samoa good as by telecommunication providers, larger engineering companies and others, and we expect this swerve to continue. Gaining access to relevant technologies and products such as sensors, semiconductors, GPS mapping systems, telematics, data science and early connectivity solutions, whether using DSRC or another communications technology, will be significant, particularly for traditional suppliers and OEMs. many companies do not have the endowment, skills, or fast-moving culture to build all these new technologies in-house on their own. Often technology startups are at a too-early phase for an acquisition or partnership and will need substantial capital to grow. If fortunate, these companies are faced with a scope of finance options, including traditional fiscal investors such as venture capital and other institutional funds, and corporate strategic investors who look to take an equity post for strategic reasons, typically to supplement or support their activities and gain some sort of competitive advantage. GM, BMW, Volvo, SAIC, Honda and Audi, among others, all have clear-cut guess arms .
corporate strategic investors, whether investing directly or through a give investment or venture capital branch ( Strategic Investors ), represent a double-edged sword to startups. Strategic Investors can be valuable partners. Advantages of fairness finance from Strategic Investors include incriminate credibility and validation of a company ’ mho engineering and/or clientele, a large network of customers who may be relevant to the business, expanded distribution opportunities, and access to diligence cognition, experience and money. Strategic Investors much will pay a higher partake price than fiscal investors because they are generally less sensible to evaluation and fiscal results and more concern with access to modern engineering and products, key personnel/talent, customers and markets. Strategic Investors may besides be a likely option for an exit. strategic Investors are besides generally more affected role and have longer time horizons than traditional speculation capital and other institutional funds. That said, it is authoritative for startups to understand that Strategic Investors have different motivations, priorities and decision–making processes than traditional fiscal investors and taking investments from them pose sealed risks that a startup should consider .
Some of these risks include :
- Divergence of Strategic Interests. Interests of Strategic Investors can diverge from a company in which they invest due to changes that are internal to the Strategic Investor such as leadership changes, priority shifts, economic conditions or matters affecting their core business. A Strategic Investor’s objectives may conflict with a startup’s and their other investors’ financial goals, which may motivate the Strategic Investor to block a proposed acquisition or investment if the transaction does not align with the Strategic Investor’s goals.
- Follow-On Investment. Availability of follow-on investments may be tied to the financial capacity, leadership or changing interests of the Strategic Investor. If the Strategic Investor doesn’t participate in subsequent rounds of financing, a startup may be disadvantaged.
- Exit Strategy Issues. There are typically fewer corporate bidders for companies funded by Strategic Investors because of the entanglements or perceived entanglements of the Strategic Investor. Some Strategic Investors view their investment as a possible step toward an acquisition of the company. In some cases, the Strategic Investor wants to see how the technology develops, or whether initial product commercialization is successful before committing to acquire the company. Strategic Investors often negotiate for a right of first refusal or option to acquire a company in which it invests, which can have a chilling effect on other potential acquirers, who will not want to expend time and incur diligence costs and expenses if the Strategic Investor has these rights and can trump any acquisition offer by a third party. Negotiating what special rights, if any, a Strategic Investor will have in the acquisition context, and the valuation and price for the eventual acquisition may be the most important issue facing a startup considering an investment from a Strategic Investor. Even without a right of first refusal or an option, if the Strategic Investor declines to bid to acquire the portion of the company that it does not own, it sends a signal to other potential bidders that there is a shortcoming with the company.
Effect on Commercial Dealings with Third Parties. Strategic
Investor investments can complicate potential partnerships, acquisitions, or other relationships with a competitor. Competitors to the Strategic Investor and companies who are associated with competitors may be unwilling to do business with the company, in part due to worries about sharing confidential information that may find its way to the Strategic Investor.
- Competitive Intelligence and Investment Overlap. Some Strategic Investors will make investments to gain intelligence on disruptive products and technologies that could pose a competitive threat but have no intention of investing or acquiring. Extra care is needed by a startup at the commencement of discussions to maintain the confidentiality of its trade secrets and other confidential information. Additionally, when Strategic Investors invest in multiple competitors in the same market, there is a risk that a company’s trade secrets or other confidential information will be disclosed. While taking an investment from a Strategic Investor can be rewarding and the best financing option for a startup, it also means accepting certain risks which may ultimately outweigh the benefits.
The autonomous vehicle diligence is transforming at a rapid footstep. industry players and modern entrants, including engineering startups, are striving to play a leading role in the business of building the different elements that make up connected vehicles, including vehicle communication technologies. How companies fare in the race to provide products in this quad will largely be a affair of whether they can build, acquire or partner today for the distinct technologies and capabilities of the autonomous fomite industry of the future .
display A : blue-ribbon Recent M & A and Equity investments related to automotive communication
|Expected to close by 2017 year-end||NXP Semiconductors||Qualcomm||$47 billion||Acquisition||NXP Semiconductors is a large maker of semiconductors for automobiles, and is active in DSRC-based V2X. Qualcomm has stated it will generally support either DSRC or cellular-based V2X technologies.|
|04/12/2017||Peloton Technology||Omnitracs, Intel Capital, DENSO International America, BP Ventures, Lockheed Martin, Nokia Growth Partners, UPS Strategic Enterprise Fund, Volvo Group, Sand Hill Angels, Band of Angels and Birchmere Ventures, B37 Ventures, Mitsui USA, Okaya, Schlumberger, US Venture and Breakthrough Fuel||$60 million – Series B funding||Equity Investment||Peloton Technology is focused on connected and automated vehicle technology, specifically for freight transportation. Their technology includes DSRC.|
|03/29/2017||Kymeta Corp||Intelsat, and others||$73.5 million round of funding||Equity Investment||Kymeta develops satellite antenna technology services used in automotive connectivity.|
|03/22/2017||Autotalks||Magma Venture Capital, Gemini Israel Fund, Amiti Fund, Mitsui & Co. Global Investment, Liberty Media’s Israeli Venture Fund, Delek Motors, Fraser McCombs Ventures, Vintage Investment Partners, Samsung Catalyst Fund, and other Israeli institutions||$30 million – Series D funding||Equity Investment||Autotalks specializes in V2X communications in autonomous driving, and has supported DSRC-based V2X technologies.|
|03/21/2017||Cohda Wireless||Government of South Australia||Grants of $2 million||Equity Investment||Cohda Wireless supplies V2X solutions and is developing connective autonomous vehicle solutions for cars, smart cities, and mining.|
|03/11/2017||Harman International Industries, Inc.||Samsung Electronics||$8 billion||Acquisition||Harman International Industries Inc. is a leading provider of connected car systems, audio and visual products, enterprise automotive solutions and connected services.|
|02/07/2017||NXP Semiconductor’s Standard Products business||Beijing Jianguang Asset Management Co., Ltd, and Wise Road Capital LTD||$2.75 billion||Asset Acquisition||NXP Standard Products business is a supplier of semiconductors, with a focus on the automotive markets.|
|01/03/2017||Movimento||Delphi Automotive PLC||Undisclosed||Acquisition||Movimento is a provider of Over-the-Air software lifecycle and data management for the automotive sector.|
|08/08/2016||Hivron Inc.||iA, Inc.||$11.9 million, bringing iA’s stake in Hivron Inc. to 83.06%||Equity Investment||iA is a provider of automotive semiconductors and modules, including a DSRC processor. Hivron provides electronic semiconductors.|
|07/29/2016||ams’s assets related to NFC and RFID reader business||STMicroelectronics||$77.8 million and deferred earn-out contingent on future results estimated at about $13 million, but not to exceed $37 million||Asset Acquisition||STMicroelectronics is actively engaged in both the automotive and connectivity industries. It is acquiring ams’s assets related to its Near-Field Communication and Radio-Frequency Identification reader business.|
|07/08/2016||AllGo Systems, Inc., USA||Visteon Corporation||$15 million, another $7 million of contingent consideration||Acquisition||Visteon is active in developing technologies in the automotive communications field, including DSRC. It acquired AllGo Embedded Systems, an India-based supplier of embedded multimedia and smartphone connectivity software solutions for the global automotive industry.|
|05/13/2016||Cruise Automation Inc.||General Motors Co.||$581 million at closing ($291 million in cash)||Acquisition||Cruise Automation is an autonomous vehicle company.|
|02/11/2016||Veniam||Verizon Ventures, Cisco Investments, Orange Digital Ventures, Yamaha Motor Ventures, True Ventures, Union Square Ventures, Cane Investments||$22 million – Series B funding||Equity Investment||Veniam produces products that combine DSRC, 4G, Wi-Fi and mesh networking that are aimed at fleets, cities and logistics operations.|
|01/28/2016||Savari Inc.||Delta Electronics Capital Company, SAIC Capital and an undisclosed strategic investor||$8 million in Series A funding||Equity Investment||Savari Inc. is a leader in V2X communication technology. While its products support both DSRC and cellular-based V2X technologies, it recently joined the 5G Automotive Association, which is aimed at developing standards regarding cellular-based V2X technologies.|
|01/06/2016||MMB Networks||Roadmap Capital, Arctern Ventures, VentureLink Funds, NXP Semiconductor||$7 million – Series B funding||Equity Investment||MMB Networks provides a line of hardware and software products built around Rapid Connect, an embedded software platform that reduces time-to-market for connected device vendors.|
industry experts are in agreement ; the wax of autonomous vehicles will change the nature of the car policy diligence. As Allstate ’ sulfur foreman executive officer, Tom Wilson, stated, switch “ international relations and security network ’ thymine going to happen tomorrow, but it is going to happen soon. ” 15 autonomous vehicles are expected to make drive safe, reduce personal vehicle ownership, and fault province for accidents from drivers to manufacturers and service providers. These factors may reduce the need for personal automobile insurance. But as the market for personal car indemnity decreases, opportunities arise for insurers focusing on early customers and types of policies. To remain competitive, insurers should consider getting involved in research, development, and policymaking related to autonomous vehicles, and besides consider diversifying their products to cover accessory liabilities .
2. Effects of autonomous vehicles on the insurance industry
The increased use of partially-autonomous vehicles and the eventual use of fully-autonomous vehicles will greatly impact the insurance industry. The most meaning changes are probably to be that autonomous vehicles will be safer, will be increasingly owned by companies quite than individuals, and will cause liability for the accidents that do happen to shift away from the “ driver. ”
a. Increased automobile safety
autonomous vehicles are expected to be safer than traditional vehicles. Former President Barack Obama has written that autonomous vehicles “ have the likely to save tens of thousands of lives each year. ” KPMG predicts that accidents per vehicle will decline from about .043 accidents per vehicle in 2013 to .009 accidents per vehicle in 2040, but that costs per accident will increase from about US $ 14,000 per accident in 2013 to US $ 35,000 per accident in 2040. hush, KPMG expects that these changes could result in a 40 percentage decline in total losses from car accidents, from about US $ 145 billion in 2013 to about US $ 86 billion in 2040. KPMG projects that losses covered by personal car policy will shrink from 87 percentage of automobile accident losses in 2013 to 58 percentage of losses in 2040. therefore, with a project 80 percentage refuse in accident frequency, our roads will be safer, and losses covered by personal car indemnity will decline importantly. As Warren Buffett commented, making cars safer is “ identical pro-social, ” but “ it ’ s bad for the car policy industry. ”
b. Changes in vehicle ownership
widespread use of autonomous vehicles may further the ongoing chemise from individual car-ownership to reliance on caror ride-sharing services. Services like Zipcar, which allow users to rent a car by the hour, provide an economic option to owning a car in urban areas. Services like Uber and Lyft, which allow users to well hail a driver from their smartphones, have besides encouraged individuals to depend more on transportation services and less on their own drive. These companies are embracing autonomous vehicles. Zipcar has partnered with the University of Michigan Mobility Transformation Center, “ a collaborative organization working on bright cities and autonomous cars, ” and claims that autonomous vehicles will be what turns its vision of “ a global where car sharers outnumber car owners ” into a reality. similarly, one of Uber ’ south goals is to reduce the number of cars on the road to clear up congestion and free up land presently used for parking. It should come as no surprise then, that Uber is already working on establishing its own fleet of self-driving cars. In Pittsburgh, users can hail a self-driving Uber that – at least for now – has a human driver who can take control condition of the car in the event of hand brake. Uber besides recently began tests of self-driving vehicles in San Francisco .
Lyft may not be far behind Uber in embracing autonomous vehicles ; it has begun testing autonomous cars in San Francisco and Phoenix. The novelty of being picked up by a self-driving car may encourage more commuters to use these services. In any event, these car-sharing and ride-sharing services are making autonomous vehicles function of their business design, and hope to reduce private fomite possession in doing then .
private fomite ownership may besides decrease because self-driving cars make sharing cars within households more convenient. The extent to which a car may be shared depends on working out the logistics of the passengers ’ schedules and destinations. A University of Michigan study examined transportation habits of over 150,000 households and determined that autonomous vehicles could allow the average number of automobiles per family to decrease from 2.1 to 1.2 – a 43 percentage decline. This study did not take into account whether and to what extent reliance on vehicle-sharing services might farther reduce family vehicle possession. careless, it is clearly that autonomous vehicles have the electric potential to drastically reduce the number of privately-owned vehicles .
These changes in vehicle possession may besides change the nature of who obtains automobile policy. If personal vehicle ownership declines and corporate fomite ownership increases, we should naturally expect the marketplace for personal car insurance to shrink and the market for commercial automobile policy to grow. The changes to vehicle ownership are besides likely to prompt changes to automobile insurance laws. If future accident investigations reveal that manufacturers tend to be at demerit, lawmakers may require fomite manufacturers, preferably than drivers, to carry liability policy. Or, lawmakers could make no-fault indebtedness systems more widespread and comprehensive examination, making no-fault liability insurance the nationally standard. Another choice would be to establish a national fund for the payment of losses related to autonomous fomite accidents. In any case, a decline in personal vehicle ownership should be expected to reduce the commercialize for personal automobile insurance .
c. Shifts in liability for accidents
autonomous vehicles shift the responsibility for a car ’ s handle of the road from the driver to the car itself. This stir besides alters who bears duty when a vehicle is in an accident. today, when a car is in an accident, the assumption is typically that a driver made an error that caused the accident. But when drivers no long make most of the decisions behind the bicycle, it will be more difficult to find them at mistake. Consider how indebtedness would be determined under negligence, rigid liability, or no-fault liability principles .
presently, most jurisdictions determine liability based on traditional negligence principles, whereby the driver may be held liable for damage caused by his or her bankruptcy to use fair care. In the context of fully-autonomous vehicles, a “ driver ” would be improbable to face any liability in the event of a cable car accident because he or she does not rightfully do any drive and consequently would not be found to have acted without reasonable manage .
however, the autonomous vehicles presently available or in testing are lone partially autonomous, and for that argue, liability for any accidents may still fall on the driver. Some vehicles presently on the road have parking systems that automate steering but require the driver to control acceleration and brake. More autonomous prototype vehicles may drive autonomously for some portions of a trip, but require the driver to assume control for early parts of a tripper or to override the automated systems in event of emergency. To the extent the driver could have avoided an accident by overriding the car ’ s autonomous features, the driver may maintain some responsibility for an accident. On the other hand, driver intervention with autonomous systems can besides invite homo error when a well-meaning but errant driver makes a mistake that the autonomous fomite may not have made. In either case, the driver maintains some degree of command and, consequently, some hazard of liability .
Consider the highly-publicized fatal accident of a Tesla driver using Tesla ’ randomness Autopilot broadcast in May 2016. The Tesla Model S was driving on a highway when a white tractor trailer crossed the highway plumb line to the Tesla. According to Tesla, the Autopilot course of study did not notice the white english of the tractor trailer against the brilliantly fall flip .
Neither the Autopilot program nor the driver applied the brake. importantly, the Autopilot platform reminds drivers to keep their hands on the bicycle and to be fix to take control of the vehicle at any time. apparently, then, the driver did not take control of the vehicle when the Autopilot program failed to recognize the white tractor dawdler. Although defect for the accident has not been adjudicated, the driver arguably may bear some responsibility for failing to override Autopilot by applying the brakes. so farseeing as drivers retain some control over their vehicles, drivers will continue to bear some risk of liability when accidents occur .
The more autonomous vehicles become, the more gamble manufacturers and service providers will face in tort actions. Manufacturers will not only have likely liability for the mechanical aspects of driving, but besides for sensing the fomite ’ s surroundings and determining the fomite ’ mho responses to those surroundings. assorted service providers may have potential liability for failing to maintain and repair autonomous fomite systems, or failing to manage the networks that allow those systems to communicate. When the failure of these systems and services induce accidents, manufacturers and servicing providers may be held apt .
ii. Strict liability
alternatively of relying entirely on traditional negligence principles, plaintiffs who have been injured in autonomous vehicle accidents are likely to besides affirm theories of rigid indebtedness. by and large, under rigorous liability theories, plaintiffs attempt to hold defendants creditworthy for manufacturing unreasonably dangerous products or for engaging in conduct that is unreasonably dangerous. Because autonomous vehicle systems are new technologies, and since traditional negligent driving claims may not be feasible, plaintiffs in autonomous vehicle accident lawsuits are likely to test stern liability theories. therefore, the affirmation of hard-and-fast indebtedness in vehicular accident litigation is likely to increase as autonomous vehicles become more common .
Under nonindulgent products liability theories, a product manufacturer may be liable for physical damage caused by an unreasonably dangerous defect in its product, whether the defect was created by design, by a manufacture error, or by improper marketing, instructions or warnings. When a fully-autonomous vehicle is involved in an accident which could have been avoided, a plaintiff may claim that the accident was foreseeable, that the vehicle should have been designed to avoid the accident, and that the accident itself is attest that the vehicle was defectively designed or manufactured .
therefore, accidents involving autonomous vehicles are likely to be followed by nonindulgent products liability claims .
Plaintiffs in autonomous vehicle accident litigation may besides argue that rigid liability applies to “ drivers ” of autonomous vehicles. An activity may be considered abnormally dangerous if it “ creates a foreseeable and highly meaning hazard of physical injury even when reasonable care is exercised by all actors ” and if “ the activity is not one of common usage. ” Driving a traditional car is not considered an abnormally dangerous activeness, but plaintiffs may assert that driving an autonomous car is an abnormally dangerous natural process, in an campaign to impose rigid liability on the “ driver. ” When early adopters of autonomous vehicle technologies are involved in an accident before that technology ’ mho safety has been proven, nonindulgent liability arguments against a driver may provide a colorable theory of liability .
ultimately, however, autonomous vehicles are expected to make roadways safer. Vehicle and software manufacturers will need to conduct across-the-board test of their automated systems before releasing them for populace function, and should publicize the results to demonstrate the safety of their products to the public. They must besides comply with regulative safeguards. Assuming that autonomous vehicles systems demonstrate acceptable guard before their secrete onto public roads, it seems improbable that “ drivers ” would much be held strictly apt for failures of the autonomous driving systems. On the other bridge player, for accidents which could have been avoided by a human driver, manufacturers will nowadays face the risk of liability .
iii. No-fault liability
At the opposite end of the spectrum from rigorous liability is no-fault indebtedness. Twelve states and Puerto Rico have a no-fault indebtedness policy system. Under these systems, insureds are compensated by their own insurance up to a legislatively determined threshold based on the seriousness of the incident or dollar measure of the damages. Injured parties may not sue unless their damages cross that brink. Absent legislative changes, no-fault liability would only apply to autonomous cars in the 13 jurisdictions with no-fault liability systems .
Expanding no-fault indebtedness to other jurisdictions and making those systems more robust may be an appropriate way for legislatures to address the ways in which autonomous vehicles will shift indebtedness away from drivers. When autonomous vehicles dominate the roadways, the plaintiffs in vehicular accident litigation are probably to be individuals, and the defendants are likely to include the companies that manufactured or serviced the autonomous vehicles involved. The claims will likely include, if not focus on, merchandise liability. thus, the litigation would be more complex and more expensive, since determining indebtedness would require more adept testimony than would a traditional negligence case. For these reasons, policymakers may support heavier reliance on no-fault systems – whether they be systems that require all owners or users of autonomous vehicles to carry no-fault indemnity, or a system that creates a government-managed fund that compensates automated vehicle accident victims .
3. Adapting to the future automobile insurance market
Given that autonomous vehicles have the potential to drastically change the insurance market, car insurers need to consider the possible ramifications of this new engineering and get ahead of these changes in order to stay viable. Insurers should keep up with developments in this area, consider getting involved in testing and policymaking, and consider diversifying their policy products to take advantage of the changes that autonomous vehicles will bring .
a. Insurer involvement in research, development and policymaking
indemnity companies have a history of assisting in the execution of technologies that make vehicles safer, and their involvement with autonomous vehicle systems should be no different. already, insurance companies have partnered with car manufacturers and other companies on inquiry, development, and policymaking related to autonomous vehicles. Aon, an policy agent and risk adviser, has partnered with other companies to test self-driving cars on a test racetrack in the Netherlands. State Farm Mutual Automobile Insurance Company has partnered with the University of Michigan and Ford to inquiry whether driver-assist technologies may lower the rate of rear collisions as region of the “ Blueprint for Mobility ” project .
state grow has besides partnered with the University of Michigan and other companies to lead the university ’ sulfur Mobility Transformation Center, which focuses not only on the research and growth of automatize vehicles, but besides on addressing the “ legal, political, sociable, regulative, economic, urban plan, and business issues ” implicated by autonomous vehicles .
Insurers may gain a competitive advantage by getting involved in autonomous vehicle research, development, and policymaking. such engagement would give insurers access to information that they can use to build their autonomous vehicle cognition infrastructure, to create autonomous vehicle insurance products, and to better handle risk judgment. Their involvement would besides provide the ability to influence precedence setting for safety goals. Insurers ’ participation in policymaking would give them a voice in shaping how lawmakers will handle the changes to the indemnity market—perhaps by amending minimum insurance standards, altering who is required to obtain insurance, or expanding no-fault liability systems. By taking an active role in research, development and policymaking, insurers can drive the variety, rather than allowing the change to drive them .
b. Diversification of insurance products
Although autonomous vehicles are expected to reduce the demand for personal automobile policy, they give rise to other types of liabilities that will need to be insured. In that way, autonomous vehicles create newly opportunities for the policy diligence. Insurers concern in leading the diligence in autonomous fomite policy should consider products targeted at manufacturers and at insuring new technologies. As an exercise, Tokio Marine & Nichido Fire Insurance won second place in the Efma-Accenture initiation in Insurance Awards 2016 in the Best Disruptive Product or Service class for providing policy for autonomous fomite testing on public roads .
Another nontraditional policy product likely to grow as a leave of autonomous vehicles is cybersecurity policy. According to Munich Re, 55 percentage of corporate managers surveyed believe cybersecurity is the biggest indemnity concern related to autonomous vehicles.
There is reasonable induce for concern. For example, in July 2015, two hackers were able to wirelessly control a Jeep – manipulating the vent conditioner, radio receiver, windshield wipers, infection, and even the brakes. soon after, Chrysler recalled 1.4 million vehicles that may have been affected by the vulnerability revealed in the Jeep hack. The prove ability of hackers to control vehicles raises obvious concerns. Hackers could, for case, cause autonomous vehicles to get into accidents or redirect vehicles transporting goods to perpetrate larceny. therefore, although the personal car indemnity market may shrink, the market for cybersecurity insurance related to autonomous vehicles should grow .
technical change is inevitable, and the automobile insurance industry is no exception. While the wax of autonomous vehicles creates risks to existing business models, it besides creates opportunities for existing players to provide new products, create new expertness, and serve their customers in new ways .