Howes: Self-driving car hype outruns market, rule-maker

Daniel Howes
The Detroit News

Detroit — Jason Levine, the new head of the Center for Auto Safety, has a thought on the autonomous car exuberance driving the auto industry and would-be investors: slow down.

Not because technology doesn’t exist to enable vehicles to steer, turn and stop themselves. It’s because providers of the technology — from Detroit, Stuttgart and Tokyo to Tel Aviv and Silicon Valley — “need to demonstrate it’s better than what we have.”

They haven’t yet. At least not to the unwashed masses who, in the conjuring of self-driving visionaries, would gladly surrender the keys to their pickup or stylish BMW for rides in soulless smart refrigerators on wheels. Can you say skeptical?

“We’re a long way off,” said Levine, a consumer protection lawyer, Obama administration alum and new executive director of the Center for Auto Safety, in an interview last week. “Don’t forget about the car that’s in someone’s driveway today. The push to be early by non-traditional players has upended what would be an iterative process.”

That would be a process typically measured in years, not months. A process governed by federal regulations, fueled with safety data, bolstered with the kind of testing that would show steady declines in failure rates. The industry, defined as traditional automakers and the Silicon Valley heavyweights crowding into the autonomous space, simply isn’t there yet.

But the enthusiasm is, and that’s another story. The race for self-driving supremacy is technical and financial at the same time, underpinned by the assumption that investors will reward leadership even as they punish those who appear to be lagging behind.

Exhibit Nos. 1 and 2 would be General Motors Co. and Ford Motor Co. GM shares are up more than $10, or more than 20 percent, since July because the automaker is on a credible path to autonomy — far ahead of Ford and even Tesla Inc., the industry darling struggling to launch its widely anticipated Model 3.

And Tesla continues to draw investor confidence despite losing money on every car it builds, failing to hit production targets of its Model 3 and drawing increasing skepticism that it is on track to field autonomous vehicles in meaningful numbers. GM is getting that nod at this point.

Capital is moving more quickly than technology. And the technology, suites of sensors connected to central processors continually crunching reams of data, is moving more quickly than consumers, dealers and government regulators. Can’t have a functioning market without them.

Silicon Valley is setting the pace that Detroit and its global automotive rivals are being forced to match, with mixed results. The Libertarian-minded high-tech sector plays by its own rules, dismisses convention and regulations, and will prove harder to tame in the autonomous space than traditional automakers.

“Tech companies are the complete wild card in this space,” Levine said. “The total wild card is consumer acceptance” — and the public understanding that realizing the autonomous future will require expensive upgrades to infrastructure to enable the technology.

Who do you think will be asked to pay for that? Here’s a hint: It’s not likely to be the companies angling to make money off a) your next SUV purchase or b) your spending on rides with Uber and Lyft or c) the data you generate, which those same companies will be able to use and ... I don’t know ... sell.

“Private industry has an incentive to do something with your data,” Levine says. And the prospect of getting access to even more of it by providing transportation services is the Promised Land sought by all the players in the space.

“That’s how Big Money works,” he continues. “That is driving a lot of bad decision-making. You and I don’t buy cars 10 years from now.” Autonomy is “sexy. It’s fun. It’s science fiction. It’s new. It needs to be statistically better than human drivers.”

And if they aren’t reliably and demonstrably better, groups like Center for Auto Safety are likely to be there to raise the alarm — along with dealers and customers, regulators and plaintiffs lawyers. They know a potential bonanza when they see one.

The pitch for self-driving vehicles theoretically promises a world free from traffic fatalities. When — if — that can be achieved is a question still very much in search of an answer.

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Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.