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Governmentis Interruptus

The President announced last week that it is time to regulate driverless cars. This usually means finding a way to tax the new technology or strangle it while a more nimble and less regulated country steals the technology or copies it. But in the heat of a quest for Presidential legacy and scant time to discover it,  President Obama’s administration is calling on the technical staffs of the manufacturers like Uber, Google, Ford, GM, Tesla and Apple to share with the government how those cars work and why they can fail. I guess they are convening a science fair for 15% of the world’s GDP?

Why Not Trust Market Competition

I might trust the forces of market competition among giants of technology like Google, Ford, GM, Uber, Tesla, Microsoft and Apple to fight this one out when 10-12%% of Worldwide GDP is at play. But I also understand that this is a disruptive moment and the government’s first instinct is to help.

According to Digital Industry Insider, in an article reported out by Reuters on September 20, 2016 the National Highway Traffic Safety Administration is calling on the driverless car industry to voluntarily submit a 15 point “safety assessment”.  NHTSA is aiming to make that voluntary submission mandatory through the “regulatory process”. The administration also hopes for a kumbaya moment where someone like Elon Musk, leads a sharing session where Google and Uber will exchange IP and best practices with Tesla and Ford as well as data about problems they have encountered with their own beta tests.  According to Digital Industry Insider, “The proposals touch an array of issues, from the ethics of robot guided vehicles- should an automated car hit a pedestrian or protect the occupants of the vehicle in a case where a crash is unavoidable- to whether self-driving cars should be allowed to speed”.

This was all precipitated when Uber recently unleashed robot cars in the Pittsburgh test market. No longer safely contained as an abstraction on the Google campus in Moutainview California where Google robot cars have been running for many years, the Pittsburgh Uber cars are actually circulating in public and the government wants to know how they work and how they can fail. Gee, I would think that the government would be more interested in how they can succeed given most of the technology leaders are American and the worldwide auto industry is many trillion dollars.

Late Night Hosts Can Give You the Top Fifteen Failures

I am also trying to understand what the government is going to do with the failure information. Any late night host can come up with a list of the top 15 reasons why driverless cars may fail and pose a safety threat to our transportation network:

  1. The Autonomous Flux Capacitor Stops Working
  2. China’s Death Star takes out the Uber and Google satellites
  3. Driverless cars stop at yellow lights and are rammed by old tech cars
  4. Many states still have toll booth operators who only accept cash
  5. Woman riders mutiny and short circuit the flux capacitor so they can sit in the driver’s seat and apply make up at stop signs and text in traffic jams
  6. The software is “improved” by the government.
  7. Driverless cars are organized by a transportation union and go on strike
  8. The Solar Engine is manufactured by Solyndra
  9. Orange Barrels are confused with waiting passengers
  10. They don’t have steering wheels, brakes or gas pedals
  11. They run out of gas in a traffic jam
  12. RAIN.FOG,SMOG blind the eyesight
  13. Valets can’t disable them
  14. Car Ferries let them off early
  15. Hal the computer takes over the system

As far as I can tell there is no need to give the tort industry an advance playbook. If Jimmy Kimmel can name 15 possible failures that is good enough for me.  It should also be satisfactory for most Americans and presumptive President Clinton’s only interest should be a financial one. If I were Elon Musk I might see if President Obama blinks on this one and wait for a President who is looking for a financial legacy.

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Rob McCreary

Rob McCreary has more than 40 years of transactional experience as an attorney, investment banker and private equity fund manager, and has spent his career in building entrepreneurial organizations with successful track records. Founder and chairman of CW Industrial Partners (originally CapitalWorks, LLC), he is responsible for developing and maintaining senior relationships with investors and portfolio governance.

This blog represents the views of Rob McCreary and do not reflect those of CW Industrial Partners or its employees. This blog is not intended as investment advice. Any discussion of a specific security is for illustrative purposes only and should not be relied upon as indicative of such security’s current or future value. Readers should consult with their own financial advisors before making an investment decision.