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1 S u m m a r y This report assesses policy and planning strategies at the state, regional, and local govern- ment levels that, if implemented, could nudge private-sector choices regarding automated vehicles (AVs) and connected vehicles (CVs) toward outcomes that would benefit society. Why would these governments want to do this? State, regional, and local governments use available policy levers to ensure the safe and efficient operation of public roadways and to foster equity across users of the system; overseeing AV and CV technologies is a natural extension of this longstanding mission. Technology and Regulatory Contexts For the purposes of this work, an AV is one that takes full control of all aspects of the dynamic driving task for at least some of the time. Using the Society of Automotive Engi- neers (SAE) International taxonomy, this research focuses on the role of higher levels of AVs in mitigating or exacerbating the negative effects of driving, or in creating new effects. Higher levels of automation are designated SAE Levels 3, 4, and 5 and are referred to in federal policy guidance as highly automated vehicles (HAVs). HAVs are not currently deployed on public roads for consumer use in the United States, although several tests of such vehicles are being implemented. A CV has internal devices that connect it to other vehicles, as in vehicle-to-vehicle (V2V) communication, or a back-end infrastructure system, as in vehicle-to-infrastructure (V2I) communication. V2V applications enable crash prevention, and V2I applications enable telecommunication, safety, mobility, and environmental benefits. Dedicated short-range communication (DSRC) standards are currently the leading medium for V2V and V2I safety applications. At present, V2V and V2I applications solely provide driver alerts; they do not control the operation of the vehicle. The National Highway Traffic Safety Administration (NHTSA) released the official Fed- eral Automated Vehicle Policy in December 2016. While this policy itself does not represent a regulatory action, it identifies potential future rulemaking activities. The policy outlines areas of safety that developers should address. The policy also outlines federal and state roles. It affirms that states retain their responsibilities for licensing and registering vehicles, defining and enforcing traffic law, and regulating insurance and liability requirements and policies. It recommends that states review current laws and regulations to address unnecessary impedi- ments to the safe use of AVs, and update references to human drivers in motor vehicle codes. States are encouraged to work together to standardize roadway signs, traffic signals, lights, and pavement markings for uniformity of the operating environment. The policy envisions that each stateâs AV-related activities will be administered by a single lead agency and associated technology committee. This report could serve as an important resource for these entities. Advancing Automated and Connected Vehicles: Policy and Planning Strategies for State and Local Transportation Agencies
2As of August 2016, eight states and the District of Columbia have enacted legislation related to AVs, beginning with Nevada in 2011 and followed by Florida and California in 2012. In 2015, 16 states introduced AV legislation, and 34 states and districts in total have considered AV legislation since 2012 (National Conference of State Legislatures 2016). Some of the adopted legislation relates primarily to terminology and taxonomy, such as a bill introduced in Louisi- ana. The adopted legislation in a number of states and districts including California, Nevada, and the District of Columbia authorizes operation and testing of AVs on public roads. In North Dakota and Florida, the legislation calls for studies and pilots of AV technology. Several enacted bills, including those in California and the District of Columbia, require a human driver to be sitting in the driverâs seat while the AV is in operation. The Tennessee bill prohibits local governments from banning vehicles equipped with AV technology. Potential Impacts of Automation and Connectivity Vehicles that are increasingly automated and connected have the potential to profoundly change personal, freight, and public transportation. The potential benefits to society are immense. As producers sell AVs and CVs and consumers buy them, crashes, traffic congestion, air pollution, and other negative externalities associated with driving may significantly dimin- ish. On the other hand, AVs and CVs may have drawbacks and pose risks. Technology will solve some problems but could also create new ones. For example, cybersecurity vulner abilities associated with CVs could compromise safety. Congestion could increase with the prolifera- tion of AVs as driving becomes less onerous and individuals who do not drive today have more opportunities for travel. With this document, transportation agencies can examine the kinds of strategies that lead to positive societal outcomes as AV/CV technologies proliferate. The analytical foundation for identifying potential policy strategies was an examination of the role of AVs and CVs in mitigating or exacerbating existing transportation externalities (listed below). An externality is an effect produced by either a consumer or producer that affects others yet is not accounted for in the market price (i.e., occurs external to the market). Externalities result in suboptimal societal outcomes because the true costs and benefits of actorsâ choices are not reflected in market prices. â¢ Traffic crashes: When individuals drive a vehicle, they not only increase their own risk of a crash and its associated costs, they also increase (but do not fully pay for) crash risks and costs for other motorists, pedestrians, cyclists, and society in general. As such, the market for safe vehicles and motoring behavior is distorted. V2V safety applications could reduce the magnitude of this externality by addressing a majority of vehicle crash types if the V2V applications are demonstrably effective and widely used, and the driver-vehicle inter- face performs well. A marginal increase in benefit could be obtained through V2I safety applications depending upon V2I extent. Even without CVs, AVs could reduce a majority of driver-related errors, which account for a vast majority of traffic crashes, but AVs also might introduce new types of errors. â¢ Congestion: As the number of vehicles on a road increases past a certain density, vehicle speed and throughput decrease, causing congestion. Each additional driver adds to the congestion but does not bear the full cost of that effect. Thus, there is less incentive for indi- viduals to take actions that reduce congestion. It is unclear how AVs and CVs will affect congestion. CV applications could mitigate congestion by reducing delays caused by safety incidents and by increasing system efficiency. Widespread adoption of V2V capabilities, widespread V2I infrastructure, and interoperability among mobility applications would maximize these effects. AVs that are safer than human drivers could enable the reduction of crash-related delays, but a proliferation of on-demand AVs could put more vehicles on the road, increasing congestion.
3 â¢ Pollution: Vehicles emit local and global air pollutants. When someone drives a vehicle, he or she reduces the air quality and adds to noise pollution in surrounding areas. That person also imposes the costs of climate change on the global society. These costs are largely excluded from the transportation market. AVs could mitigate this externality by leading to reduced vehicle production rates and parking needs, and to increased use of smaller, electric vehicles and eco-driving. AVs and CVs could also increase this externality by increasing safety and improving the convenience of vehicle travel, lowering transporta- tion costs. While the associated increased vehicle miles traveled (VMT) may facilitate addi- tional economic activity or enhanced quality of life, the increased VMT may or may not bring negative environmental impacts that would need to be mitigated. â¢ Land development: Land devoted to automobile infrastructure and to inefficient develop- ment patterns, while historically increasing mobility and decreasing travel costs, may also pose negative environmental, economic, and public health effects on society. These costs are largely not borne by travelers specifically but by society as a whole. AVs and CVs could increase safety, improve convenience of vehicle travel, and lower transportation costs. These effects might lead consumers to take more trips and travel more miles in order to access lower-priced land and rural locations, exacerbating the negative effects. However, society could benefit if HAVs reduced the need for parking adjacent to destinations in dense urban areas so that land dedicated to parking in urban areas could be repurposed for other uses. â¢ Mobility: Older adults, youths under age 16, and individuals with disabilities have limited access to desired destinations, activities, and services. Because of implicit and explicit sub- sidies for personal automobile travel, these can be viewed as a negative externality of the existing transportation system. Fully automated vehicles may offer a reduction of the existing negative externality by enabling significant improvements in access and mobility for such individuals. This is particularly true for those who live in areas with few alterna- tive modes. The benefits of less-than-full automation and CVs in reducing this negative externality are unclear, however. Policy and Planning Strategies Society could benefit if state, regional, and local governments were to implement policy and planning strategies to (a) internalize these externalities in decision making by consum- ers and (b) reduce negative societal effects and increase positive societal effects of AVs and CVs, regardless of whether they are internal or external to market decisions. Both types of strategies would result in better societal outcomes. Eighteen strategiesâorganized by desired outcomeâare provided for transportation agencies to consider. The strategies represent the common types implemented by state and local governments. The viability of each has been assessed by the following criteria: effec- tiveness and efficiency in achieving the desired outcome, political acceptability, operational feasibility, geographic impact, who would implement, and hurdles to implementation. The feasibility of achieving the desired outcomes was deemed more likely with some strategies than others, as noted in the bottom line assessments presented. Outcome: To Mitigate Safety Risks through Testing, Training, and Public Education 1. Enact legislation to legalize AV testing. Assessment: Legislation will provide a necessary policy framework to allow AV testing on public roads. Testing is a critical path step for mitigating safety risks. The key hurdle to implementation is passing legislation; there must be political will to do so.
4 2. Enact legislation to stimulate AV or CV testing. Assessment: Legislation will provide a necessary policy framework to stimulate others to test AVs and CVs on public roads. Testing is a critical path step for mitigating safety risks. Direct funding may be needed to stimulate CV testing. The key hurdle to implementation is passing legislation; there must be political will to do so. 3. Modify driver training standards and curricula. Assessment: Driver training standards and curricula will be essential to safe operation of AVs and CVs. Hurdles to implementation are mainly operational; altering driver training and licensing requirements for AV Level 3 vehicles will require significant restructuring of driver training and of licensing requirements and testing. AV Level 4/5 vehicles could eventually lead to the elimination of driver training, examining, and licensing as they currently exist. However, there is not enough clarity on the specifics of CV and AV roll-out to determine how to proceed with new training standards in the near term. 4. Increase public awareness of benefits and risks. Assessment: AV and CV technologies have the potential to bring immense societal ben- efits but also pose new risks, both of which need to be made known to the general public to ensure market acceptance as well as safe operation. Public education campaigns are expensive and complicated endeavors. Their effectiveness and ability to achieve a posi- tive societal outcome will be determined by the credibility of the messenger and per- ception by the receiver about the necessity and validity of the message. A major hurdle will be the development of trusted messages given the uncertainties in the technology deployment, benefits, and drawbacks. Outcome: To Encourage Shared AV (SAV) Use 5. Subsidize SAV use. Assessment: Based on what is currently happening with transportation network com- panies like Uber and Lyft, a strategy to encourage SAV alternatives to AVs is not needed since demand for such services has been strongly market-driven. However, a strategy that incentivizes SAVs to provide first/last-mile service and service for targeted popu- lations could be effective in achieving positive societal outcomes. Hurdles will be in implementationâreallocation of public transit subsidies for SAVs and political oppo- sition from some driver-reliant industries (i.e., taxis and livery services). 6. Implement transit benefits for SAVs. Assessment: Transit benefits, a type of economic incentive provided to employees to pay for transit or vanpool fares, are not by themselves particularly successful in increasing transit use. Evidence has shown that use depends much more heavily on extent of ser- vice provision and user convenience. This economic incentive could be more effective with an SAV fleet because of the flexibility in origins and destinations served, but service characteristics would still be important. The key hurdle to implementation is regulatory. Congressional action is required to alter the existing transit benefit program. 7. Implement a parking cash-out strategy. Assessment: Parking cash-out is a type of existing economic incentive wherein employers offer employees a choice between retaining a free parking space and taking a cash payment. While parking cash-out has been fairly successful where adopted, its success depends on the availability of commute alternatives. The key hurdle is institutional; there is no par- ticular incentive for employers to implement this, other than a mandate. Still, even making the offering of the program mandatory for employers would not necessarily encourage SAV use since the employees might opt for the free parking instead.
5 8. Implement location-efficient mortgages. Assessment: Location-efficient mortgages (LEMs) are special mortgages available to homeowners whose properties are located close to transit stations. Price is undoubtedly an important component of home buying decisions, but there is no evidence that LEMs make a major difference. The additional increment available to qualified buyers in pilot programs was generally in the range of $15,000, which is probably not sufficient in many markets to make a difference in the number of homes affordable to the borrower. Major hurdles to implementation are political. There are a number of stakeholders who might have concerns about such a program. 9. Implement land use policies and parking requirements. Assessment: Land use strategies allow, incentivize, or mandate development features, and these can be used to realize the best use for the public good. However, land use policies do not necessarily ensure that developers will provide for the best use or that the realized design will function as envisioned. The likelihood that such policies will generate a large shift to SAV use must be compared to existing efforts to promote shared mobility. These examples are still quite limited, though they show signs of success where they do exist. Hurdles are political, with potential objections from private developers and local residents. 10. Apply road use pricing. Assessment: Pricing applications are currently implemented in numerous forms through the United States. Road use charges have been effective in achieving specific objectives related to minimizing the impacts of driving, such as congestion and pollution. However, road use charges are also among the most unpopular of pricing applications in society. Thus, hurdles to implementation will be public and political opposition. Outcome: To Address Liability Issues That May Impact Market Development 11. Implement a no-fault insurance approach. Assessment: A no-fault approach to auto insurance allows crash victims to recover dam- ages from their own auto insurers rather than from another driver. State-level no-fault automobile insurance would likely accomplish goals of clarifying assignment of liabil- ity and, depending on the statutory language, reducing or eliminating manufacturer liability. The political feasibility of implementing such an approach in certain states is uncertain due to potential opposition from powerful stakeholder groups. 12. Require motorists to carry more insurance. Assessment: Raising mandatory insurance minimums would very likely produce a net- positive socially beneficial outcome because it would eliminate the existing subsidy for unsafe vehicles and drivers. Without enforcement, the strategy may have unintended con- sequences, namely increased incidence of consumers not purchasing any insurance. Hur- dles include the effective enforcement of insurance minimums and the likely unpopularity of higher mandatory insurance requirements among the general public. Outcome: To Enhance Safety, Congestion, and Air Quality Benefits by Influencing Market Demand 13. Subsidize CVs. Assessment: The strategy uses an economic incentive to encourage the adoption and pene- tration of CV technology. If NHTSA requires DSRC/CV equipment on new vehicles, there is no need to subsidize new vehicles. The needed role of incentives is for existing vehicles that would not be covered by a new vehicle mandate. Subsidies will likely require authori- zation and legislation at their respective levels that create barriers to implementation.
614. Invest in CV infrastructure. Assessment: The strategy encourages the adoption and penetration of CV technology by making sure that necessary physical and digital infrastructure is in place to support V2V and V2I applications. Hurdles include funding availability and the associated fact that investing agencies will want concrete evidence of return on investment. Currently, it is still unclear whether the benefits of increased funding for CV infrastructure will be greater than the costs. An additional hurdle is clarifying what data will be freely avail- able to public agencies and whether they could monetize such data, potentially defray- ing some of the CV infrastructure cost. 15. Grant AVs and CVs priority access to dedicated lanes. Assessment: For minimal cost, the societal benefits of fast and safe travel on dedicated lanes for AVs and CVs are very large. However, implementation will require the right situation. If the intent is to increase market penetration of equipped vehicles, effective- ness will depend on road operatorsâ willingness to dedicate lanes to AVs and CVs. If the intent is to reduce VMT in a restricted district or area (like an urban center), effective- ness will depend on how well the supply of SAVs matches demand. 16. Grant signal priority to CVs. Assessment: Signal priority involves sophisticated signal timing algorithms that estimate the arrival of specific vehicles and coordinate the signal timing to give them green light priority. It is unlikely that this policy will be the driving force to increase market pen- etration because the travel time benefits will be minimal. It may also have the negative outcome of reduced priority treatment for transit. 17. Grant parking access to AVs and CVs. Assessment: Priority parking, which grants priority reserved parking in desirable loca- tions, will have zero effect on the market penetration of AVs and CVs. The ability of an AV to park itself will likely be more of a market incentive. If implemented, the strategy would reduce some parking availability for non-AVs, which would incur opposition from the general public. 18. Implement new contractual mechanisms with private-sector providers. Assessment: Public-private partnership (P3) arrangements have a long history of creat- ing net-positive benefits to society, so this strategy that requires potential reinvestment of private-sector revenue to deploy CV/AV-enabling technologies would likely have sim- ilar outcomesâfacilitating adoption and market penetration and creating an ecosystem of innovation. However, P3s are generally perceived as a more expensive mechanism to realize those benefits, so identifying a suitable revenue stream to support the marketplace for AV and CV technology is a necessary precursor. Conclusions The strategies provided through this research offer considerations for state and local agencies using the best information available at the time. Technology direction may change, consumers may not adopt certain products, and any number of global economic or environmental drivers could alter the policy course. Even within such uncertainty, it is incumbent upon state and local agencies to use available policy and planning strategies to nudge private-sector choices regard- ing AVs and CVs toward outcomes that would benefit society, thus aligning public- and private- sector interests in the technologies. Ultimately, transportation planning and policy making for AVs and CVs will be informed through a cycle of learning and leveraging early-adopter agencies that support testing, evaluation, research, and continuous knowledge creation.