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1 Policy Objectives

The potential benefits of AVs are recognised by many governments and directly correlate with transport and societal policy objectives. Most transport strategies include references to:

  • Improving road safety
  • Reducing emissions
  • Easing congestion
  • Improving public transport provision for those who either choose not to, cannot afford to or are physically unable to drive

Some or all of the above could be positively (or even negatively) affected by AVs. It may be beneficial for local or national governments to prioritise which benefits are most important. If the aim for a particular area is to improve public transport accessibility, the solution needs to be focused on highly automated public transport vehicles that have no direct vehicle controls. If the main aim is to improve road safety, there is much that can be done with Advanced Driver Assistance Systems (ADAS). These are already deployed on higher-end private vehicles, as discussed in a report by Boston Consulting Group and the Society for Motor Manufacturers and Traders. If congestion is a major concern, there could be incentives for encouraging shared use of larger vehicles, or intelligent route planning. Environmental concerns may steer the developments towards ensuring AVs are fitted with electric powertrains, and generally limiting energy use, perhaps by using low-speed, low-mass, demand-responsive vehicles. It's possible that economic benefits are better realised by pursuing technology that leads to higher sales of private vehicles, or lowers the cost of moving freight.

Further objectives could involve land use. If vehicles can park themselves in areas of lower parking demand, or continue to provide a taxi-like service after the passenger alights, then demand for car parking spaces could fall and this land could be put to better use. Likewise, if AVs can operate with a higher throughput and less road space is needed, then land can be released. These two themes featured in a video released by Drive Sweden, a Strategic Innovation Program launched by the Swedish government, and in a white paper produced by WSP Parsons Brinckerhoff in association with Farrells.

2 Role of government and regulators

Governments and regulators can significantly shape and influence markets. As discussed in an article by Bryant Walker Smith, governments can play multiple roles at the same time, such as:

  • Monitoring – collecting data about AVs prior to, during and post-deployment. Educating – governments can educate themselves, stakeholders and the general public.
  • Reacting – responding to issues created by AVs.
  • Preparing – this could include using government resources and expertise to ensure plans are in place to deal with incidents.
  • Clarifying – the government can clarify the legal status of automated driving. For example, clarifying what constitutes in law the entity that was previously referred to as 'the driver'.
  • Restricting – restrictions can be imposed either before development, before deployment or post-deployment, and at various levels of government. This might be needed, for example, to address public safety concerns.
  • Promoting – at the same time as restricting automated driving, governments could be promoting it. A paper by Bryant Walker Smith explores methods by which governments can promote automated driving.
  • Planning – broader in scope than preparing, planning deals with the longer-term policy objectives and how automated driving can assist. Examples could include looking at land use aspirations, as described above.

The Transport Systems Catapult investigated one of the major barriers to AV deployment: safety considerations. The mechanisms for encouraging road safety can be divided into three parts: vehicle safety, operational safety and environmental safety, as shown below:

Current safety assurance activities in the automotive sector (UK), SRN: Strategic Road Network.
The above diagram illustrates that there are mechanisms for ensuring that:
  • Vehicles are 'safe'
  • Vehicles are driven 'safely'
  • Infrastructure and roads are 'safe'

With the transformative impact of AVs, much of the existing safety landscape needs to be adapted or fundamentally reinvented. The diagram below annotates the above diagram with text in yellow boxes to show some of the high-level changes that warrant attention by regulators and authorities.

Changing Safety Landscape with the Introduction of AVs (UK)

3 Policy Levers / Tools

Regulations can be forward-looking or retrospective. Forward-looking regulatory tools might include:

  • Performance requirements
  • Process requirements
  • Regulatory entry barriers
  • Standards
  • Industry practice
  • Insurance conditions

Whilst retrospective regulatory tools might include:

  • Criminal/civil sanctions
  • Regulatory recalls
  • Investigations and hearings Tort/warranty claims
  • Reputation impacts
  • Sales impacts

The above tools can be separated into public and private regulatory tools. Private statutory requirements, such as the need to obtain sufficient insurance, play an important part in public policy. Reputation damage resulting from incidents could also be a significant consideration for the automotive industry. Fear of losing sales as the result of an incident could help ensure that organisations strive to achieve the highest standards of safety for their products.

The timing and extent of regulation are important. Too much regulation too early can stifle innovation, but there might come a point where it is appropriate to standardise approaches to certain aspects of AV testing and deployment.

The evolution of AVs shines a spotlight on several different fields that go beyond the vehicle design and build itself. The shifting role of the driver, insurance, ownership and payment models, licensing laws, infrastructure, traffic laws, public safety and so on, will all be affected in some way. There is a need to consider how this can be stage-managed and regulators will likely play a role in directly managing this, or working with other parties to shape it.

4 Role of local policies

Local government may be keen to adopt local policies to ensure the deployment of AVs serves the community and not just manufacturers and individual interests. There are several policy tools already available to do this. They are the conventional tools of pricing, subsidies, licensing and space allocation. New ones may be necessary.

Although many of the safety benefits and some capacity improvements are achievable with Level 3, there will be strong supplier and political pressure to speed the approval of higher levels to achieve other benefits and not be left behind. The problem will be that the most significant individual benefits are achieved with Level 4/5 at a small incremental cost: removing parking problems, allowing new users (previously unable to drive), fully performing other activities while travelling and eliminating liability and insurance issues. These are important individual benefits that will speed up Level 5 adoption and, at the same time, may bring some of the unintended consequences that the policies should seek to manage.

Once Levels 4 and 5 are allowed on the road there will be a need for improved demand management policies. It is less likely that AV only lanes would be provided and the effort will be focused on enhancing the benefits and discouraging use that produces disadvantages. In this context, it is expected that the policies will favour for-hire AVs over owned ones and monitor their impact to ensure the right balance is struck. On the other hand, if unemployment is perceived as a key and major problem, then the opposite preference will be adopted.

Pricing instruments will be the most flexible, and effective, policy tools to manage AV demand and to provide an alternative source of revenue once fines and parking yields are reduced. In its simplest form, this may involve a lower annual road tax for the preferred form of use. It will be possible to devise parking policies specifically for Levels 4 and 5, treating owned and hired vehicles differently, as is currently the case for some taxi ranks and car club places.

Empty AVs circulating on congested roads will be a sore sight creating universal irritation and rejection. It will be relatively easy to justify a Road User Charge (RUC) as a measure to manage their use. The charge is likely to be set to reflect the externalities, congestion and emissions of empty movements.

Revenue collection will be simplified by the extensive instrumentation of such vehicles, including accurate location history. This charge is likely to be acceptable to all, recognising the clear nature of the externality of an empty vehicle in circulation. It will then be a small step to charge the externalities of AVs with passengers and also of other, non-automated, vehicles. Any RUC will have the additional benefit of allowing tailored pricing to protect and encourage the use of more efficient forms of transport and discourage urban sprawl.Automated buses, mini-buses, trucks and white vans will also need specific policies to satisfy similar requirements to those of car AVs. As such, they will affect an important group of stakeholders: professional drivers and their assistants.

The adoption of AV technologies and the policies associated to them will have major impacts on groups of people that are often ignored in the policy development process: those unable to drive, professional drivers and associated trades, insurance workers, parking assistants and inspectors.

It will be necessary to design complementary measures to address the equity impacts of AVs. In some countries, the process of replacing drivers with AVs will be slower because of the different costs of capital and labour. But in all countries, there will be a need to devise effective means of up-skilling those displaced by automation and AVs will be a major and early case requiring resources and ingenuity.

Existing status of AV regulations

Summaries of regulations from around the world are included below:

4.1 United States

The US has published numerous legislation, guidelines and policy documents concerning AVs. The federal government and the National Highway Traffic Safety Administration (NHTSA) produced an AV policy guidance document. This document includes 12 priority safety design elements for consideration, including vehicle cyber security, human-machine interface, crashworthiness, consumer education and training, and post-crash ADS behaviour. It also encourages entities engaged in testing and deployment to publicly disclose Voluntary Safety Self-Assessments of their systems in order to demonstrate their varied approaches to achieving safety.

At state level, there is a useful Autonomous Vehicle Legislative Database that was collated by the National Conference of State Legislators. The following subsections summarise regulations from a selection of states that have been active in defining safety requirements.

A key consideration for regulators is how to define the ‘driver’ within an automated system. NHTSA's letter to Google provides an interesting context to this discussion.

California has a well-defined programme for allowing AVs to be tested, under strict conditions (such as always having a ready-to-take-control test driver, and reporting any incidents or ADS disengagements to the state government). The draft legislation also allows for deployment of AVs, after applying for a Permit to Deploy Autonomous Vehicles on Public Streets, including evidence that the vehicle will obey road traffic laws and AV behaviour guidelines. Trials without a human driver on board are also permitted given further restrictions.
The state’s **Department of Motor Vehicles (DMV)** is eliminating the requirement for autonomous cars to have a backup person in the driver’s seat – and the rule will go live as early as April 2, 2018. The 50 firms currently holding test permits, including Waymo and NVIDIA, can then apply for a fully driverless license. They will only be required to monitor their cars remotely – and meet the following requirements:

  • Companies must inform local authorities about the area in which they’re conducting tests.
  • A "law enforcement interaction plan" for police officers must be presented to deactivate the vehicle if needed.
  • Collision reports must be submitted within 10 days.

For more information, follow the links to these relevant documents:
Adopted Regulations for Testing of Autonomous Vehicles by ManufacturersDeployment of Autonomous Vehicles for Public Operation

District of Columbia

AV legislation in the District of Columbia requires AVs to have a driver in the car and ready to take control, and vehicles converted to be autonomous must be newer than four years old.


Florida has fully enacted several laws addressing testing and operation of AVs. Broadly, these allow both testing and deployment of AVs, subject to conditions, such as that the vehicle must come to a safe stop if the ADS fails and an operator is not able to take manual control.


To obtain an Autonomous Vehicle Testing License, Nevada’s Department of Motor Vehicles requires applicants to submit a report describing prior testing of the AV. Operators must have covered 10,000 miles of prior testing, and must describe how their autonomous system handles a variety of traffic scenarios. Applications must also select the road types (interstate highways, state highways, urban environments and unpaved or unmarked roads) and environmental conditions (night driving, rain, fog, snow/ice, and high crosswinds with gusts above 30mph) that they wish the AV licence to cover. Before a licence is granted, a demonstration drive is required, along a route selected by the operator, but covering a variety of conditions. Once a licence is granted, AV trials must have an operator in the car and ready to take control at all times.


Pennsylvania has an active policy document governing the testing of AVs on public roads. AV trial programmes must be approved by the state government, and are subject to restrictions, including a maximum of two lorries (or three passenger vehicles) in a platoon, and a requirement that law enforcement and emergency response staff can easily disengage the ACS. Trials without an operator on board the AV need additional specific authorisation, and the vehicle must carry special markings indicating it is fully autonomous.

4.2 Europe

The European Union Think Tank report Automated vehicles in the EU provides a summary of the regulatory situation within the European Union. ABI/Thatcham Research have provided a report with a summary of regulations from a UK/European perspective. There is also a European strategy on Cooperative Intelligent Transport Systems, a milestone towards cooperative, connected and automated mobility.


Finland has a defined procedure for applying for a licence for public road tests of AVs, through the Finnish Transport Safety Agency (Trafi). The driver of the AV can be outside the vehicle but assumes full responsibility for the control of the AV. Finland also created an AV roadmap for 2016-2020.


France has enacted legislation to permit trials of AVs on public roads.The trial organiser must apply for cross-ministry authorisation and the application process will be defined by an upcoming decree of the Conseil d'Etat. While safety is the top priority, the details of any restrictions are not specified in the legislation.


Germany is actively promoting AV development and has set up a Round Table on Automated Driving. It has also designated a stretch of the A9 Autobahn as an AV test facility, the Digitales Testfeld Autobahn. There is a publicly available AV strategy document, as well as a detailed report from the Round Table on research priorities for AV development. The digital infrastructure, cyber security and privacy issues form a key part of the government strategy.


The Netherlands has an established process for organisations to apply for permission to test AVs. Instead of providing fixed guidelines and restrictions for the trials, the RDW (vehicle licensing and regulatory authority) considers each case carefully and works closely with the organisation running the trial.


Spain has introduced a formal process for gaining approval for road trials of AVs. The process requires operators to apply to the government department responsible, the DGT, providing proof that the vehicle is insured and has passed a series of tests showing basic competence. The driver must also meet certain requirements, and be able to take control of the vehicle at any time (although the driver does not have to be inside the vehicle).


Sweden is keen on supporting AVs, and Volvo's DriveMe pilot is running in Gothenburg. However, the government has not published any new regulations or guidelines to support AVs, although they did produce a study of the Swedish landscape for AVs.


Switzerland has several AV trials, though there are no publicly-available framework or guidelines covering these. A policy document was published in December 2016 describing the potential impacts of AVs, however, this does not directly address safety aspects.

United Kingdom

The UK government has set up the Centre for Connected and Autonomous Vehicles (CCAV) to lead policy development in this sector. It is tasked with delivering a programme of research, development, demonstration, and deployment activity, worth up to £200 million, through Innovate UK. It also aims to provide co-ordination across government departments and a single contact point for stakeholder engagement. The Code of Practice for testing of AVs was launched in February 2015 and is in the process of being updated. The UK government[should this be parliament?] (House of Lords) held an inquiry into AVs, and published the resulting report and extensive stakeholder input here.

4.3 Rest of the World


The National Transport Commission (NTC) leads Australia’s regulatory approach. The NTC produced a policy paper titled Regulatory reforms for automated road vehicles, as well as candidate guidelines for AV trials. The guidelines discuss several safety questions for trials, including the pre-trial testing of vehicles, human driver considerations, driver or operator training requirements, driver and operator fitness for duty, driver or operator duties, transition between human and automated driving modes, system failure warnings and vehicle identifiers.


Japan has non-regulatory guidelines for testing AVs without needing prior approval. They require a driver and an monitoring passenger to be in the vehicle. They also suggest an iterative approach, starting with private facilities, and using quieter public roads, before moving to busier and/or hazardous environments.

South Korea

South Korea has an active programme of AV tests, supported by new legislation defining the parameters required for trials. These mandate that two drivers must be in the vehicle, there must be adequate closed-road testing, technical requirements (including a speed limiter and incident recording equipment) are in place, and there is evidence of insurance