Der Bundestag Lays a Self-Driving Egg

Normally if you are trying to solve a knotty problem in the automotive industry the best place to look for help with challenges philosophical or physical is Germany. With nearly one in every five workers engaged in designing, building, servicing or selling cars and with five global car makers calling Germany home, you'd expect to find the most refined perspective in all instances. But you'd be mistaken.

This is the unavoidable conclusion to be drawn from the latest self-driving car legislation approved by Germany's lower parliamentary house, the Bundestag. According to Cleantechnica.com, Germany’s Bundestag, "has approved the regular use of self-driving vehicles and features in the country" but under the condition that drivers must always be able and expected to take control when necessary and that those human drivers will be fully responsible for the behavior of the vehicle.

The legislation requires adoption by the upper house before proceeding to final approval, but it marks an abject surrender to both the automotive and insurance industry lobbies. It is clear that, other than Volvo, no car company is eager to take full responsibility for insuring and ensuring the performance of autonomous driving systems. Volvo continues to stand alone in announcing its ultimate intention to take on that responsibility. What is missing is a regulatory framework for that underwriting pledge and the German legislation is no help.

The German legislation reprises a decades-old industry saw that holds consumers responsible in all circumstances for vehicle failures - be they poor design or actual flaws. For decades auto makers blamed drivers for crashes and fatalities, failing to take responsibility for dangerous vehicle design decisions - ie. metal dashboards, no seatbelts.

Similarly, it took decades for regulators to recognize the responsibility of auto makers and require new standards and safety systems which ultimately reduced the frequency of crashes and the number and severity of injuries. To throw responsibility back upon drivers just as in-vehicle systems are achieving new levels of autonomous driving capabilities is to abdicate legislative and regulatory responsibility and let car makers and insurers off the hook leaving the humans to hold the body bag.

After the debacle experienced by United Air Lines last week - violently punting a passenger off of a plane based on a computer algorithm - we all know how badly computer-based decision making can turn out. But blaming the driver for the weakness of an on-board algorithm opens the door to a downward spiral in autonomous vehicle technology development and the evaporation of research dollars.

Car makers must warranty and guarantee the performance of these systems and take appropriate responsibility as they would for the performance of airbags, brakes and bumpers. The German legislation requires a black box to sort out the post-crash forensics and assign blame, but this is nothing more than a recognition of existing reality. The problem is that the Bundestag seems to suggest that in most instances the black box data will be used to finger the driver.

I have a lot of respect for German automotive engineering and strategic thinking, but German self-driving car legislation that holds the driver responsible in all circumstances is a giant leap backward. With connectivity and autonomy the responsibility of the car maker is elevated. The game has changed and is changing and car insurance, as we know it, will be the first casualty - no pun intended.

Now that car makers are increasingly connected to their cars they cannot plead ignorance to either vehicle performance or driver behavior nor can they walk away from responsibility - even if their lobbyists are successful as in the case of the Bundestag, evidently. Once again, it is a case of Tesla Motors being miles ahead of its metal-bending colleagues, with the possible exception of Mercedes-Benz.

If a Tesla driver misuses the autopilot feature, the feature is temporarily disabled. Tesla has not explicitly taken responsibility for the performance of its autopilot system in the event of a crash, but it has already demonstrated how vehicle data - gathered wirelessly in connection with a crash - can be used to establish responsibility - usually absolving Tesla, of course.

Presumably, the legislators in the Bundestag will wipe the egg off their collective face in time to celebrate Easter and consider a more visionary path forward - one that, perhaps, will establish a legal framework for enhanced auto maker responsibility in self-driving scenarios. It reminds me of the esurance executive who noted at an industry event last year that consumers should only have to pay for insurance when their hands are actually on the wheel - if there is a wheel.

Roger C. Lanctot is Director, Automotive Connected Mobility in the Global Automotive Practice at Strategy Analytics. More details about Strategy Analytics can be found here: https://www.strategyanalytics.com/access-services/automotive#.VuGdXfkrKUk