Driverless vehicles: Australia is playing catchup

15 March 2019


I have been interested in driverless vehicles for many years now and two things have been a source of constant frustration. The first is how the media pays a lot of attention to the failures particularly where deaths are involved. This focus is misleading as we are in a testing phase and accidents are to be expected. A jet aircraft crashing did not stop the aviation industry from flourishing since the 1960’s. Dramatically reducing injury and death in motor vehicle accidents is a major purpose of driverless vehicles.

The second frustration is how slow our response in Australia has been to create a legal framework within which driverless vehicles can operate on the road. From 17 July 2017, the Germans amended their Road Traffic Act to regulate the use of "motor vehicles with highly or fully automated driving function". In 2018 the United Kingdom enacted the Automated and Electric Vehicles Act. Both pieces of legislation provided for frameworks for automated vehicles to be used on roads in Germany and the United Kingdom respectively, including covered by insurance.

To date, Australia still has no legislation covering the use of driverless vehicles by the general public. There have been specific pieces of legislation to allow trials, and South Australia, for example, was very advanced enacting such legislation in 2015.

Some action

In Australia, the National Transport Commission (NTC) has been taking the lead and endeavouring to coordinate a response from the state jurisdictions regarding multiple aspects necessary for the introduction of driverless vehicles.

Towards the end of 2018, the NTC obtained submissions from the public regarding the legal changes necessary, including to insurance, to allow driverless vehicles to be used by the general public on the road. The consensus of the submissions to the NTC, including from many insurers, was that existing laws should be sufficient, in particular compulsory third party legislation, with only some modification to allow driverless vehicles to be covered. One example of a necessary change is the definition of 'driver'. The exception to that consensus was Western Australia, who considered the nature of driverless vehicles required a whole new approach to compensation legislation.

In May 2019, it is expected that the conference of transport ministers from around the country will consider the NTC’s work on possible legislation, including the different options that the submissions put to the NTC. It may well be that following that meeting, the progress to legislative reform can be quicker but it would not be surprising if we still do not have any legislation in place covering driverless vehicles for CTP compensation until 2020. It would be a pity if this were the case. We would be behind countries such as Germany by as much as three years.

Technology drives change

As is often the case where technology drives change and the law is slow to respond, the market has already made its own moves. Earlier this year, QBE in partnership with the Armidale Regional Council and with support form the NSW Government’s Smart Innovation Centre is providing the insurance required for a driverless vehicle initiative. It is a 12 month project where a level 4 automated bus (level 5 is fully driverless, eg. no steering wheel) will drive around a 5km route in Armidale. Yes, it is still only one of the many tests that need to happen, but private and public sector have combined to make it happen.

Similarly, in October 2018 in Adelaide, the government blocked off roads leading to two main city streets (Flinders & Wakefield Streets) to allow testing of vehicles with ‘Vehicle to Everything’ technology (V2X) developed by the Adelaide based company Cohda Wireless. The technology, fitted to two vehicles, allowed the vehicles to communicate with each other (not with people) and transport infrastructure such as traffic lights. Deliberately, the vehicle with a driver ran a red light while the other, an autonomous (or driverless) vehicle, identified this and avoided the collision.

Government and private sector cooperation is vital to allow technological change. Testing is important and shows the way to the future.

Our future is already happening in Germany where the legislation is in place to allow driverless vehicles.

Driverless and electric vehicle development is costly and businesses would not do it without seeing an advantage. So costly that competitors BMW and Daimler (which makes Mercedes-Benz) recently announced a joint venture with investment of US$1 billion in five areas: car sharing, ride-hailing, parking, charging and multimodal transport. Multimodal transport is the use of multiple means of transport on a single trip (under a single contact, useful for efficient goods transport for example). We cannot match this but we can at least be the beneficiaries of their hard work (perhaps if we gave Cohda Wireless $1 billion we could do better!).

The need for legislation

The need to progress more quickly with legislation covering the use of driverless vehicles is paramount not just by the rate of technological development that is occurring but also to allow all the elements that support the use of these vehicles.

Specific legislation covers trials. The trial in Armidale is the most recent of many instances of the public being able to use driverless buses (others have run in Sydney, Renmark, Flinders University in Adelaide and other instances around the country).

Another aspect to be addressed is protection for privacy and data breach as the data from driverless vehicles, particularly in their communication with each other and with infrastructure, can be open to 'hacking'. The use of such data to resolve disputes surrounding collisions is also an important element.

Criminal responsibility, for example current negligent driving and other criminal provisions, also needs to be the subject of reform.

CTP and property damage insurance and the law governing compensation are key areas for consumers. Legislation is needed to cover this.

Lastly, new road rules and infrastructure need to be put in place so that driverless vehicles can safely use the roads. A 5G network would be useful, although not essential as the vehicles use multiple sources of information. There may be designated lanes for driverless vehicles or be more sophisticated changes such as traffic lights and even parking controls being able to communicate directly with vehicles. All of this requires rules.

Save lives (and money)

The World Health Organisation reported that in the year 2013 there 1.24 million road traffic deaths worldwide. More than half were motorcyclists, cyclists or pedestrians. The US Department of Transport in February 2015 reported that 94% of US motor vehicle collisions were due to human error. In the 12 months to January 2019 there were 1,166 road deaths in Australia according to the Department of Infrastructure, Regional Development and Cities - read their March bulletin here.

It is the safety aspect of driverless vehicles that is perhaps their greatest advantage.

As long as driverless vehicles deliver on their safety promise, the public will not be spooked by shock media reports of deaths during testing. Those instances are dramatically less than the amount of loss and suffering that occurs now from motor vehicle accidents caused by humans.

Governments will be motivated to support this change for many reasons including the prospect of saving health costs and not having emergency departments full of crash victims. Business will be more efficient with less transport costs (driverless semi trailers can drive close to each other reducing drag which reduces fuel consumption). We will want to use the driverless taxi, the elderly and disabled will have greater independence. The list of benefits goes on.

Insurance, reform & infrastructure

The need for legal reform now is a reflection of the reality that driverless vehicles will become a much more important part of our community. It is as big a change as from horses to cars. It will be some years before driverless vehicles are the majority (and there will be a transition to fully driverless). However, we need to plan now for the insurance underlying the anticipated legislative compensation schemes that include liability for driverless vehicle collisions. What will motivate the use of driverless vehicles is if they result in lower insurance premiums as a result of their lower risk. This will depend upon data which will grow as the vehicles are used. In addition to that, if commuting times (for example, along dedicated lanes) are quicker, then the uptake will also increase.

For all these benefits to happen, we need to act more quickly in Australia to provide the legislative, insurance and infrastructure framework to allow driverless vehicles on our roads – not just for the odd test bus.

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