United States: Driverless Vehicles Have Arrived In North Carolina. How Will Your Industry Be Affected?

Last Updated: December 19 2017
Article by Cheslie Kryst

Most Popular Article in United States, January 2018

Twelve years old. In North Carolina, a person as young as twelve years old may ride alone in a fully autonomous—or, "driverless"—vehicle.

New legislation in North Carolina opened the door for local operation of driverless vehicles. Some autonomous vehicle testing has already begun on North Carolina roads. You may see these vehicles in a city near you sooner than you'll see a Panthers win at the Super Bowl and, yes, you may even see a twelve-year-old alone in the front seat someday.

North Carolina Legislation

A statute that became effective on December 1, 2017 regulates the operation of driverless vehicles in North Carolina. (House Bill 469) These self-driving vehicles use a combination of lasers, radar, and other technology to track objects around them that may be hidden from the human eye.

The statute defines a driverless vehicle as one "equipped with an automated driving system that will not at any time require an occupant to perform any portion of the dynamic driving task when the automated driving system is engaged." North Carolina does not require the operator of such a vehicle to have a license. The registered owner is ultimately responsible for moving violations.

This new law effectively encourages automakers to bring driverless vehicle testing to the state. A recent announcement by the United States Department of Transportation has the same effect. In early 2017, North Carolina's Interstate 540 Triangle Expressway toll road was selected by the United States Department of Transportation as a designated testing location for driverless vehicles. North Carolina was on a short list of only ten testing locations in the country in a program sure to attract driverless vehicle technology pioneers. NCDOT officials are aware some testing has already started on the Expressway and on other roads in the state.

Local Industry Changes

The development of driverless vehicle technology will no doubt upend some industries. The automotive and technology industries are two that have been affected and will continue to change and develop dramatically in the coming years. It is difficult to predict, with a high level of certainty, the impact this new technology will have on other industries; however, there are several big industries in North Carolina likely to experience broad changes in the coming years.

Automotive Manufacturing

North Carolina is number ten in the nation for automotive sector employment. Companies like Bridgestone, Daimler, and Freightliner employ over 26,000 workers in the state. North Carolina has a perfect storm of resources and opportunities that will continue to feed this growing industry. This includes the designated testing location and its proximity to the Research Triangle, access to the second-fastest growing information technology industry in the nation, and the emergence of the fully autonomous truck.

Trucking

Truck drivers are one group that may be concerned about job opportunities being phased out in the future. Uber-owned Otto recently worked with Anheuser-Busch to complete a 120-mile beer delivery in a semi-tractor—while the vehicle operator sat in the backseat. Although drivers who maneuver through narrow, congested city streets may feel more confident about the security of their jobs, those who are frequently traversing highways may not feel the same.

Employers should be aware of job-shifting opportunities for truck drivers. It may be helpful to utilize an existing workforce in a different capacity rather than expending costly resources to recruit new employees. If the future of truck driving will involve someone operating a semi-truck at a remote location, early retraining efforts may help to ensure employee retention.

Business and Financial Services

North Carolina's financial center is the third-largest in the nation. Businesses supported by car insurance premiums should be especially vigilant and attentive to the development of the driverless vehicle. The question is not if the structure of car insurance as it is today will change, but when.

Responsibility for accidents will likely shift from the human driver to the automaker or technology developer. This shift in responsibility from the driver to the product raises important questions. How will insurance companies and other related businesses equip themselves to handle the potential for increased involvement in products liability lawsuits?

Volvo is one automaker that has announced it will take full responsibility for any accidents or collisions in which one of its vehicles is involved and at fault while in fully autonomous mode. It is unclear how many other automakers will make the same guarantees for their vehicles. Surprisingly, the vast majority of the accidents that fully autonomous vehicles have been involved in were due to driver error when human drivers rear-ended ultra-cautious driverless vehicles.

State and Local Government

Many automakers are developing driverless technology to use primarily with hybrid and fully electric vehicles. An increase in popularity of these vehicles may endanger funding of government entities like the NCDOT, which is funded in large part by a fuel tax paid by consumers at the pump.

Funding issues may even reach small, local government or private entities that collect revenue from parking tickets. Driverless vehicles may be able to drop riders off at their respective destinations and find their own parking spaces. This may eliminate the need for centrally-located parking decks and may lower the chance of receiving parking tickets. As the popularity of driverless vehicles grows, the NCDOT and other government agencies may have to find new sources of revenue.

It Won't Be Long

Google's parent company has an autonomous vehicle division, Waymo. It has been operating its vehicles on public roads in the United States without any human behind the wheel since October 2017. Although these vehicles may not be widely available for consumer mass production any time soon, large automotive and technology purchases and investments may provide other opportunities for consumers to ride in driverless vehicles.

Ride-sharing company Uber has an autonomous fleet that has already driven more than a million miles in Pittsburgh, San Francisco, and Tempe, Arizona. It will soon expand its fleet with plans to purchase 24,000 fully autonomous vehicles from Volvo for delivery starting in 2019—less than 13 months from now. Following closely behind, General Motors recently invested $500 million in another ride-sharing company, Lyft, before acquiring a software firm that will aid its fully autonomous vehicle development strategy.

It is difficult to predict with a great level of certainty all of the changes and the impact these vehicles will have on each of the industries in North Carolina. Therefore, companies should be acutely aware of how driverless vehicles continue to develop in the next couple of years. They should prepare for both positive and negative changes in their respective industries. By preparing for and immediately addressing the impact driverless vehicles will have, companies will be better positioned to use these vehicles to their benefit and earn a competitive advantage over less vigilant businesses.

About the Author:

Cheslie Kryst is an attorney at Poyner Spruill, LLP, concentrating her practice in complex civil litigation. Before joining the firm she worked for both General Motors Company and Fiat Chrysler Automobiles, developing company strategies for electrified vehicles. She is a graduate of Wake Forest University where she received a JD and an MBA.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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