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Michigan Just Passed the Most Permissive Self-Driving Car Laws in the Country

Dec 09, 2016

Michigan Gov. Rick Snyder signed a package of automaker-backed bills Friday that aim to clear the way for self-driving cars to operate on public roads and re-establish the state as the epicenter of automotive innovation in a time when much of the attention and praise has centered on Silicon Valley.

The four bills, 995, 996, 997, and 998, establish regulations for the testing, use, and eventual sale of autonomous vehicle technology and are meant to more clearly define how self-driving vehicles can be legally used on public roadways. The new laws allow testing of vehicles without steering wheels, pedals, or needed human control—an important allowance that aims to propel Michigan ahead of California, a hotbed of driverless car development. (For instance, California rules prohibit the use of fully autonomous driverless cars that don’t have a steering wheel or a brake pedal—like the prototype developed by Google.)

Automotive and technology companies will now be able operate self-driving vehicle ride-sharing services and driverless cars may be sold to the public once the technology has been tested and certified. One bill establishes the Michigan Council on Future Mobility, an arm of the Michigan Department of Transportation that will recommend policies to set industry standards. The council will regulate connected vehicle networks and how traffic data, such as vehicle crashes, will be collected and shared.

Fiat Chrysler Automobiles (fcau), Ford Motor Co., General Motors, Toyota Motor, Google and ride-hailing companies Uber and Lyft participated in shaping the final legislation, according to Michigan state officials.

However, tech companies like Uber are not happy with the contents of SB 996, which allows only "motor vehicle manufacturers" to participate in a so-called SAVE project. A SAVE project is an initiative that allows eligible automakers to deploy a network of on-demand self-driving taxis.

"We oppose SB 996 (the 'SAVE Act') and its anti-tech protectionist elements, but SB 995 helps resolve many of those issues, and we appreciate the state enacting those improvements," an Uber spokeswoman said Friday. "Ultimately, we think it is early in the life of this technology to prescribe state laws, and while these bills may work for Michigan, we do not think they are something other states should use as a model."

The new laws come at an auspicious time for automakers and companies like Google and Uber who are racing against each other to develop and commercialize the technology.

“At the end of the day, the most important thing about SB 995 is that it will permit on-road deployment of autonomous vehicles. And we’re grateful for this legislation because it will play a critical role in achieving our intention to deliver a fully autonomous SAE level 4-capable vehicle with no gas or brake pedals and no steering wheel for commercial use in geo-fenced areas in 2021," Wayne Bahr, director Automotive Safety at Ford Motor Co. said at the signing Friday.

General Motors (gm) and other automakers developed the legislation and presented it to the Michigan Department of Transportation and Sen. Mike Kowall, who later introduced the bills in the state legislature, MDOT director Kirk Steudle told Fortune. Initially, companies including Google and Uber were dissatisfied with some language in the bill that appeared to prohibit their ability to operate an on-demand network of autonomous vehicles used by the public, Steudle said, adding that the language was modified and Google and Uber are comfortable that they can now qualify.

Still, there are some questions about the clarity of the language in SB 995 and , according to Bryant Walker Smith, assistant professor of law and engineering at the University of South Carolina and a scholar at Center for Internet and Society at Stanford Law School. "The language is so unclear that I can't even say what it actually does," Smith said in an email, adding that while the final laws did change they are "still a mess."

The legislation's attempt to define the term "operator" ends up complicating things, Smith wrote in September.

If these bills are enacted, drivers and operators could conceivably include companies running driverless taxi services, engineers who start automated vehicles, passengers who merely ride in them (since otherwise a mobile device exception would be unnecessary), companies that file platooning permits, and the automated driving systems themselves. The bills accordingly complicate rather than clarify the meaning of these two critical terms. These terms are critical because Michigan's current vehicle code places a wide array of rights and responsibilities on the driver or operator of a motor vehicle.

The big takeaway from these auto industry-backed bills—questionable language aside—is that it shows at least one major automaker is close enough to deploying a driverless taxi service in a limited area that it is already investing resources in enacting an explicit legal framework for that service, Smith said in an email exchange Thursday. "That's exciting," he added.

State officials see this as a better alternative to rules that exist in California, which Steudle says are too restrictive. "They're getting data and they're posting it on a website that really doesn't mean anything," he said. "Unless you're an electrical engineer in the middle of automated vehicles you won't understand what it means. So what good does it really do other than give all the data from one company to another company?"

This over-regulation is unnecessary, Steudle added.

"We view this legislation as Michigan getting government out of the way of technology and letting it be deployed when it's ready, but at the same time in a manner that keeps people accountable for keeping people safe on roads," Steudle said. "There's 100 years of history of automobile companies in Michigan putting test vehicles on the road and putting safe vehicles out."

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