Uber, San Francisco in self-driving car squabble | Business| Economy and finance news from a German perspective | DW | 22.12.2016
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Uber, San Francisco in self-driving car squabble

Technologies Inc. has removed its self-driving cars from San Francisco streets, just one week after their launch, in response to a regulatory crackdown.

The California Department of Motor Vehicles (DMV) said on Wednesday it revoked the registration of 16 self-driving cars because they had not been properly permitted. For the last week, the agency was demanding that Uber shut down its program and comply with regulations requiring a permit to test self-driving cars on public roads.

"We have stopped our self-driving pilot in California as the DMV has revoked the registrations for our self-driving cars," San Francisco-based Uber said in a statement emailed to AFP.

Regulations-averse Uber said it was not obligated to have a permit, because its vehicles require continuous monitoring by a person in the car. Anthony Levandowski, Uber's vice president for advanced technologies, said last week that as with the Teslas, the cars driven by Uber still have a driver capable of assuming control at any time.

 "We have a person sitting in the driver's seat, and there's also a person next to them looking at the system and trying to confirm that everything is going well," he added. "They are able to override and take control of the vehicle at any time."

Semi-self-driving Uber car in Pittsburgh (Getty Images/AFP/A. Merendino)

Here, one of Uber's semi-self-driving Volvo cars in Pittsburgh. Trials of the technology will continue there, even as trials of the same technology in San Francisco have been halted- but probably not for long.

California regulations define autonomous vehicles as having the capability to drive "without the active physical control or monitoring of a natural person." Uber has argued that the law does not apply to its cars, which cannot stay in autonomous mode continuously. A driver and an engineer are in the front seats to take over frequently in sticky traffic situations such as construction zones or pedestrian crossings.

Uber's defiance was met with threats of legal action from the DMV and the state attorney general. But the DMV told Uber that if it had obtained a permit, the regulator would have given the green light to the self-driving pilot. DMV director Jean Shiomoto said in a letter sent to Uber on Wednesday that she would "personally help to ensure an expedited review and approval process," which she said can take less than three days.

So the squabble is over whether California has the right to regulate Uber's trials of its semi-autonomous cars, not on whether the cars should be on the road at all. 

Change of venue?

San Francisco was supposed to be the company's second testing ground for its self-driving cars. The first trials launched in September in Pittsburgh. It is not yet clear whether Uber will apply for the California permit, or simply bring the self-driving cars to another state.

"We're now looking at where we can redeploy these cars, but remain 100 percent committed to California and will be redoubling our efforts to develop workable statewide rules," an Uber spokeswoman said in a statement.

California's permit process is intended by the state as a public safety measure, as regulations also require that companies provide the DMV with accident reports. Uber, however, has complained that California, its home state, has favored complex rules over technological innovation.

Another 20 companies exploring self-driving cars, including Alphabet's Google, Tesla Motors, and Ford, have obtained California DMV permits for 130 cars.

Google's self-driving car (picture-alliance/dpa/Google)

An early version of Google's self-driving car technology. The company's autonomous vehicle program is evolving quickly under the new Waymo brand, and new models look less like dorky cartoon sketches.

Growth pangs, and hungry competitors

Since its debut in 2010, Uber has rapidly grown into a worldwide phenomenon, despite regulatory hurdles and resistance from traditional taxi operators. In its latest funding round, the company was valued at more than $60 billion, even though it has racked up losses at it expands and takes on competitors such as Lyft and Juno.

In August, Uber inked a deal with Volvo to collaborate on the development of self-driving cars, in what they characterized as a long-term industrial partnership. But they are far from the only companies going in this direction.

In addition to US-based competitors like Tesla, Uber also faces competition from German carmakers such as BMW. The Bavarian marque will have about 40 vehicles with self-driving funcions in Munich's inner city starting in early 2017, and will later expand the project to other cities, BMW announced in early December.

BMW intends to push into pay-per-use transport, having recognized the competitive threat from ride-hailing companies like Uber, Lyft and Juno. The ride-hailing business model is set to shake up the traditional car industry, not just the taxi industry, because as autonomous vehicle technology matures, customers will have an excellent alternative to owning cars of their own. They will be able to hail rides from wherever they are, using smartphone apps, and get dropped off, without having to worry about parking or recharging the vehicles.

Once ride-hailing companies are able to deploy fleets of fully autonomous self-driving cars that no longer need a steering wheel or a backup human driver, the cost of rides is expected to plummet. That's at least a few years away. But with deep-pocketed companies like Alphabet, the parent of Google, investing massively, the technology may be on city streets sooner than most people expect. Alphabet spun off its autonomous car unit under a new brand, 'Waymo,' only a week ago.

nz / (Reuters, AFP)

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