Beverly Hills could drive autonomous vehicle revolution

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This article was originally published in Law360, New York (June 1, 2016, 11:39 AM ET)

Beverly Hills is known for its swanky stores and hotels with first-class service. But for your next visit, the driver of your shuttle might be a software program.

While you weren’t looking, the 5.7-square-mile minicity near Los Angeles reinvented itself as a tech leader. In 2015, Google named it an eCity, saying it has the strongest online business community in California. And last month, the Beverly Hills City Council unanimously passed a resolution to develop a fleet of municipal driverless shuttles, putting the city on track to likely become the first U.S. city with such a service.

Other cities developing comparable programs include Singapore, Masdar City in Abu Dhabi, Amsterdam and London. Finland and Switzerland are planning to have driverless buses by 2017, and Japan plans to introduce driverless shuttles before hosting the 2020 Olympics.

This is exciting.

As I wrote in Law360 last December, despite regulatory hurdles that can seem much more daunting than the technological challenges still being worked out, I am confident that there will be a swift and massive shift to autonomous vehicles (AV) within a few years. I just didn’t realize that Beverly Hills was about to help lead the movement. My son — who rides the Metro trains with me — will be at the front of the line with me when these vehicles debut, and we’d love to see the technology roll out in our home town, Culver City, another small city in L.A. ideally situated to join the AV revolution.

Amid this excitement, it's somewhat confounding that the state of California, which has drawn opposition from Google and other groups over its very cautious AV policy requiring all AVs to have a manual override and licensed driver at the ready, will find itself at odds both with some of its own cities and with the federal government — which in recent months has strongly backed the AV revolution by setting aside $4 billion for pilot projects.

Beverly Hills is banking on funding the program through partnerships with technology companies, and will need to successfully navigate a complex regulatory environment to meet its goal of having the shuttles operational in less than 10 years.

Beverly Hills’ resolution was adopted in part to respond to the lack of parking for the planned extension of the Metro’s Purple Line, including three stops in Beverly Hills by 2026, and is being described as a “first and last mile” solution. According to Beverly Hills Mayor John Mirisch, the city anticipates that people will use their smartphones to request an AV to take them from point A to point B within the city limits.

The city's report in support of Beverly Hills’ resolution lays out a Phase I plan which includes developing an understanding of the relevant state and federal regulations, exploring partnerships with manufacturers, transportation network companies and governmental organizations. The report also says the city will publish a white paper on AVs and host a conference in the fall of 2016 that will include panel discussions on the current state of AV technology, the role of AVs in the larger multimodal transportation environment and the regulatory landscape.

To deal with the California Department of Motor Vehicles’ resistance, Beverly Hills anticipates adding itself to a proposed bill by California Assemblywoman Susan Bonilla that would exempt a Contra Costa County driverless shuttle pilot program from the DMV’s manual driving capability requirements for AVs. Bonilla’s bill, which has been approved by the state assembly, would authorize the Contra Costa County Transportation Authority to test 12-passenger, low speed, driverless shuttles at the Bishop Ranch Business Park in San Ramon, and at GoMentum Station on the Concord Naval Weapons Station

Beverly Hills’ resolution comes amid a recent flurry of activity in the development of AVs. In January, General Motors announced its $500 million investment in Lyft as part of “a long term strategic alliance” to create “an integrated network of on-demand AVs in the U.S.,” and in March GM acquired Cruise Automation, a Silicon Valley AV start up, for over $1 billion. Uber recently confirmed it is testing driverless cars on the streets of Pittsburgh. And Apple recently invested $1 billion into the Chinese ride-hailing firm Didi Chuxing, to name just a few highlights.

Apple’s investment in Didi aims to take advantage of both the vast number of potential customers, with a population of nearly 1.4 billion people, as well as China’s centralized government and uniform regulations, which Apple is betting will put China ahead of the United States in a driverless car future where a society that more embraces uniformity is at an advantage.

By contrast, in the U.S., the patchwork of individual state regulations is seen as a significant obstacle to the widespread adoption of driverless vehicles. Google, which recently spearheaded the formation of a coalition with car makers and taxi-hailing companies to help steer the AV regulations and increase public support for the technology, was particularly vocal in its disappointment with the DMV’s proposed “manual driver” requirements, which it sees as unnecessarily limiting the growth of the technology and pushing companies developing the technology out of California. Google’s coalition, including Ford Motor Co., Volvo, Uber and Lyft, will lobby lawmakers and regulators on legal barriers to AVs and former U.S. National Highway Traffic Safety Administration official David Strickland will be its spokesman.

"Self-driving technology will enhance public safety and mobility for the elderly and disabled, reduce traffic congestion, improve environmental quality and advance transportation efficiency," the group said in a statement.

Google argues that requiring technology that switches between automated and manual technology actually makes the cars less safe. With over 50 self-driving cars having driven over 1.5 million miles, Google has gathered the data to support their position — which it publishes monthly in online reports. In February, the National Highway Traffic Safety Administration sided with Google when it sent it a letter saying a self-driving system can be considered the driver of a self-driving car for the purposes of interpreting federal vehicle safety regulations and guidelines.

After decades of driverless cars seemingly forever on the horizon of the future, they seem more inevitable then ever. The recent news of traditional car manufacturers investing in AV tech companies is the latest harbinger. With safety heralded as the prime motivation, and the simultaneous realization of time and cost savings, the benefits of AVs are hard to dispute.

Small affluent cities such as Beverly Hills are ideally situated to move the low speed urban component of the AV landscape forward, as they have the economic means and limited size to implement the vehicle to infrastructure communication systems which are seen as necessary component of a future driverless car world. The opportunity for municipalities to partner with the technology companies and AV manufacturers will incentivize other cities to follow suit. I would expect to see a trend in cities following Beverly Hills lead and anticipate that some of the $4 billion that President Obama has earmarked for AV’s will go to states and municipalities investing in vehicle to infrastructure communications.