March 9, 2017

For nearly a decade, a consortium of tech firms and auto manufacturers has roved the West, pioneering autonomous vehicle technology far from federal regulators in Washington, D.C.

The hype over autonomous vehicles (AVs) began with Google’s Self-Driving Car project, a “moonshot” initiative to enhance mobility for seniors and people with disabilities while providing safe, efficient, and affordable transportation to the public.

While the tech giant inspired the public with videos of a legally blind man enjoying a ride in its quirky driverless cars, it was also convincing California and Nevada’s legislatures to allow it to test a technology that was still unproven on public roads.

Google was not the first company to conceive of self-driving cars – the idea is decades older than the company itself – but it did blaze a trail for others to follow and wrote some of the first state laws for a brand new industry.

This caused automakers to establish research operations in California as they worked to catch up with Google, and then inspired Uber and Lyft to begin developing their own AVs. Now 27 companies are testing autonomous vehicles in California alone, including automakers, tech firms, and an educational institution.

But the dust is beginning to settle in the Wild West as AVs inch towards maturity. Federal and state officials are now working to bring law and order to this new technological frontier, causing even the most daring tech firms to abide by the rules and cooperate with the authorities.

Enter Levandowski 

At the center of the story is Anthony Levandowski, a former Google employee who inspired its self-driving car program and influenced California and Nevada’s state policies to allow for the testing of AVs.

In 2008, Levandowski was working on Google Maps. He moonlighted as an entrepreneur to form a startup, 510 Systems, which was building a self-driving Toyota Prius.

According to The Guardian, Google was initially reticent to fund or even endorse Levandowski’s extracurricular pursuit, concerned about the legal implications of testing an unproven technology on public roads.

But Levandowski was eventually able to win over Google’s co-founders by making his Prius conduct a driverless pizza delivery in downtown San Francisco. The tech giant purchased Levandowski’s fledgling project in 2011 and brought it into its moonshot laboratory, Google X.

The acquisition was not altogether unusual, given Google’s history of pioneering new technologies.

But Google’s initial reticence was telling: the auto industry is highly regulated – and building a car is much different from building an internet search engine. Outside of government-sanctioned demonstrations, testing automated vehicle systems on public roads was largely uncharted territory fraught with regulatory peril.

At the federal level, companies engaged in auto manufacturing, design, and retrofitting are required to comply with federal motor vehicle safety standards – which were not (and still have not been) updated to address the advent of AV technology.

In the absence of federal oversight, states could effectively establish their own regulations surrounding the testing and operation of AVs.

At this time, there were not any laws on the books governing autonomous vehicle testing. It was unclear how law enforcement in California would react to Google’s Self-Driving Car. In a 2016 interview, Levandowski indicated that, in this pre-regulatory period, “if people asked us what was on the cars, we’d say it’s a laser and just drive off.”

The regulatory uncertainty did not dissuade Levandowski – instead, he saw an opening. He hired a lobbyist, David Goldwater, to help write and pass some of the nation’s first autonomous vehicle laws in California and Nevada.

“I thought you could just do it yourself,” Levandowski told The Guardian, “Then I found out that there is a team dedicated to that, a process. Got a little bit in trouble for doing it.”

Levandowski’s ambition laid the technological and policy foundations that kicked off the now-widespread effort to develop autonomous vehicles. Up to this point, AVs were mostly limited to university robotics labs and DARPA’s Grand Challenge –more of a utopian dream than a technology to be regulated.

The same AV laws that Levandowski helped push in California and Nevada also became the models for other states to follow in the coming years. In fact, sometimes passages were copied word-for-word from California’s legislation. For example, some sections of the 2016 Tennessee AV law were copied verbatim from California’s first AV law in 2012.

Levandowski Breaks His Own Rules

Nevada was the first state to implement autonomous vehicle laws in 2011, thanks in part to Levandowski’s efforts at Google. But in 2016, those same laws posed a challenge for him in 2016 when he left Waymo to start his own autonomous trucking company, Otto, which was later acquired by Uber for $680 million.

Shortly after the company’s launch, Otto planned to film an advertisement of its trucks driving on a Nevada freeway without a human operator present.

As Business Insider reported, the response from Nevada DMV’s AV oversight officer, Jude Hurin, was stern:

“I am concerned… every company we have dealt with in the past has obtained a test license in our state prior to the media event… Your video is going to produce questions directly to your company and Nevada DMV as to why they do not have a red test plate on the vehicle. I am also going to have Daimler Trucking and others calling me to ask why Otto is allowed to do this when they couldn’t.”

“Without [an AV testing] license you do not have authorization to drive this on our highway in a semi or fully autonomous mode,” Hurin concluded.

Of course, Levandowski was aware that the Nevada DMV requires companies testing AVs in the state to submit an application prior to operation – he helped to write the rules. But Levandowski likely hoped to avoid completing the application process, which required documentation of 10,000 miles of autonomous testing, a detailed safety plan, and a plan for hiring and training test drivers.

Nonetheless, Otto proceeded to film and release a video of its truck driving autonomously (and allegedly without a human in the cab) on a Nevada highway when it announced its launch.

State officials railed against Otto afterwards, forcing the company to walk back its claims that the truck was operating without a human operator present. Instead, Otto claimed, it actually did have an engineer in the cab at the time and that its truck was not self-driving, as it required an engineer to be present to monitor the vehicle.

If this sounds familiar, it is because Uber adopted the same rationale when testing its Self-Driving Ubers in San Francisco last December, shortly after Levandowski came on board.

Due to his role in crafting California’s AV laws, Levandowski posited that Uber could squeak past the legislative requirement to obtain a state AV testing permit.

California state law defines autonomous vehicles as being able to operate without human intervention. The reasoning was that Uber’s cars were not fully capable of operating without monitoring or intervention by a human driver, and would therefore have two engineers on board at all times.

But California disagreed with this interpretation.

On the same day that Uber launched its Self-Driving Uber service, the California Department of Motor Vehicles sent a letter to Levandowski that chastised the company for not registering its AV testing program in the state like twenty other companies had.

After a protracted battle with San Francisco and state officials, Uber opted to move its AV testing to Arizona – which does not require AV licenses or permits – instead of complying with California’s regulations.

The Age of Law and Order

Much ink has already been spilled about Uber’s rocky start to 2017. Its customers railed against the company’s controversial response to protests of President Trump’s immigration ban at JFK; a #DeleteUber movement siphoned off 200,000 users; a firestorm erupted over a former female engineer’s blog post detailing sexual harassment issues at the company; a video emerged of Kalanick yelling at a driver who voiced concerns about reduced fares; and the New York Times revealed that Uber used a program called Greyball to dodge government regulators.

Additionally, in a February 23 blog post, Waymo (formerly known as Google’s Self-Driving Car project) accused former employee Anthony Levandowski of downloading over 14,000 highly confidential and proprietary design files for Waymo’s autonomous vehicle hardware.

In its complaint, Waymo estimates the theft of its intellectual property by Levandowski and other former Waymo employees to have netted Otto employees over half a billion dollars.

In a statement first reported by Business Insider, Uber called the lawsuit “a baseless attempt to slow down a competitor and we look forward to vigorously defending against them in court. In the meantime, we will continue our hard work to bring self-driving benefits to the world.”

But ultimately, the convergence of bad press, regulatory disputes, and consumer backlash seem to have elicited a change of heart for Uber’s CEO, who has signaled a turnaround for Uber, which began correcting some of the actions – and inactions – that had caused it grief. Kalanick hired former attorney general Eric Holder to probe sexual harassment allegations. The New York Times now reports that Uber is now prohibiting the use of Greyball to target local regulators. And, as of March 8, the company has applied for and received a permit to test autonomous vehicles in California.

Uber’s change in tone is indicative of a larger shift that is already taking place in the autonomous vehicle industry.

Operating in regulatory uncertainty was the norm for autonomous vehicle manufacturers in the past decade of development. Manufacturers complained about, yet thrived in, the absence of consistent federal and state policies surrounding the technology.

But now that autonomous vehicles are evolving from a utopic projection to a perceived inevitability, federal and state officials want to ensure they are deployed safely while also pushing back against scofflaw operations of AVs.

This year alone, legislators in 20 states across the country have already proposed over 60 AV laws – and there is no sign of a slowdown.

Meanwhile, U.S. Transportation Secretary Chao is considering significant adjustments to the Federal Automated Vehicle Policy (FAVP). On the Hill, Senators John Thune (R-SD) and Gary Peters (D-MI) are advancing legislation that directly impacts the testing and future deployment of autonomous vehicles.

That is to say, the era of the devil-may-care Silicon Valley cowboy is over – and the age of (mostly) rule abiding autonomous vehicle development as begun.

The industry’s three major tech giants – Waymo/Google, Uber, and Lyft – have given up on building their own cars from scratch. Instead, they have entered alliances with experienced automakers that have the institutional knowledge to abide by federal and state laws. Waymo partnered with Fiat-Chrysler, Lyft partnered with General Motors, and Uber with Daimler (the parent company of Mercedes).

The old desperados are even singing a different tune – last month, they urged the United States Congress to step in and establish a framework of national laws that they could agree to follow.