Advancing Automated and Connected Vehicles: Policy and Planning Strategies for State and Local Transportation Agencies (2017)

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88 C h a p t e r 5 This study examined the societal impacts of AVs and CVs—both beneficial and detrimental—and identified policy and planning strategies at the state and local lev- els that could internalize these impacts in market deci- sions made by individuals and organizations. Traditionally, public agencies intervene in market activities when there are goods or services that may not be efficiently or equita- bly provided by the market. In such instances, public and private interests do not align. The deployment of AV/CV technologies will have effects on producers and consum- ers in the market, on public agencies themselves, and on third parties who are not involved in the market of buying and selling AVs and CVs. It is the role of public agencies to consider the interests of all these groups and, in cases where those interests do not align, to intervene in the mar- ket to maximize potential benefits and minimize negative consequences. Public agencies have many mechanisms with which to align public and private interests, including economic, regulatory, and planning actions. This research identified 18 strategies that represent common types implemented by state and local governments. The viability of each was assessed by the following criteria: effectiveness and effi- ciency in achieving the desired outcome; implementation considerations; stakeholder, equity, and political consid- erations; technological developments; and cost and ben- efit considerations. The feasibility of achieving the desired outcomes was deemed more likely with some strategies than others, but all are presented for consideration. The particular circumstances of one state, region, or locale over another may influence the overall viability of a particular strategy. The important goal is to create desirable out- comes for society. The first is safety. The second relates to enhanced mobility. A third relates to mitigating pollution and congestion. The fourth relates to market barriers that could deter and delay introduction of these technologies. Summaries of Policy and Planning Strategies The following strategies are presented organized by the desired outcome. • Outcome: to mitigate safety risks through testing, training, and public education. – Enact legislation to legalize AV testing: Legislation will provide a necessary policy framework to allow AV test- ing on public roads. Testing is a critical path step for mitigating safety risks. – Enact legislation to stimulate CV or AV testing: Legisla- tion will provide a necessary policy framework to stimu- late 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. – Modify driver training standards and curricula: Driver training standards and curricula will be essential to safe operation of AVs and CVs. – Increase public awareness of benefits and risks: AV and CV technologies have the potential to bring immense societal benefits 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. • Outcome: to encourage SAV use. – Subsidize SAV use: A strategy that incentivizes SAVs to provide first/last-mile service and service for targeted populations could be effective in achieving positive societal outcomes. – Implement transit benefits for SAVs: This economic incentive could be more effective with an SAV fleet than traditional transit because of the flexibility in origins and destinations served, but service characteristics would still be important. – Implement a parking cash-out strategy: While park- ing cash-out has been fairly successful where adopted, Conclusions and Recommendations

89 its success depends on the availability of commute alternatives. – Implement LEMs: Price is undoubtedly an important component of home buying decisions, but there is no evidence that LEMs make a major difference. – Implement land use policies and parking requirements: 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 show signs of success where they do exist. – Apply road use pricing: Road use charges have been effec- tive in achieving specific objectives related to minimiz- ing the negative impacts of driving, but they are very unpopular. • Outcome: to address liability issues that may impact market development. – Implement a no-fault insurance approach: A state-level no-fault automobile insurance approach would likely accomplish goals of clarifying assignment of liability and, depending on the statutory language, reducing or eliminating manufacturer liability. – Require motorists to carry more insurance: Raising man- datory insurance minimums would very likely produce a net-positive socially beneficial outcome. Without enforce- ment, the strategy may increase the incidence of consum- ers not purchasing any insurance. • Outcome: to enhance safety, congestion, and air quality benefits by influencing market demand. – Subsidize CVs: If NHTSA requires DSRC/CV equip- ment on new vehicles, then the incentives would be used to retrofit existing vehicles. – Invest in CV infrastructure: It is unclear whether the benefits of increased funding for CV infrastructure will be greater than the costs. Evidence of ROI is needed. – Grant AVs and CVs priority access to dedicated lanes: 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. – Grant signal priority to CVs: It is unlikely that this policy will be the driving force to increase market penetration because the travel time benefits will be minimal. – Grant parking access to AVs and CVs: Priority parking likely will have zero effect on the market penetration of AVs and CVs. – Implement new contractual mechanisms with private- sector providers: P3 arrangements have a long history of creating net-positive benefits to society, so this strategy would likely have similar outcomes. The strategies provided through this research offer consid- erations for state and local agencies using the best informa- tion 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 regarding AVs and CVs toward outcomes that would benefit society, thus aligning public- and private-sector interests in the tech- nologies. Ultimately, transportation planning and policy making for AVs and CVs will be informed through a cycle of learning and leveraging early-adopter agencies that sup- port testing, evaluation, research, and continuous knowledge creation. Suggestions for Further Research The assessments conducted in this research were high- level viability reviews. Several of the strategies warrant more in-depth study to tease out key issues. • Enact legislation to stimulate AV or CV testing. – Among states that have already passed legislation, what persuaded lawmakers to spend their political capital and energy to pass it? What was the driving factor and/ or economic productivity advancement? – Who wins and who loses at the local or state level? How can the winners be persuaded to be supportive? How can losers be addressed? – What are the motivators for the private sector to select one location over another? – Why is funding of CV testing for V2I a good public investment? What is the ROI? • Subsidize SAV use. – Under what conditions would transit properties want to subsidize SAV use? How much subsidy is needed? – With a large investment in rolling stock, how would transit gradually move into a combined bus/SAV fleet? – For which future public transport scenarios should cities be preparing, and how will this affect congestion and safety? • Implement new contractual mechanisms with private ser- vice providers. – What do public agencies have in the AV/CV realm that is of value to private service providers? – What data will be available from CVs, how can the data be monetized, and by whom? – What types of P3 arrangements can be created to pro- vide public agencies with the data they need for opera- tion of public roadways?

90 • Invest in CV infrastructure. – What is the ROI for public agency investment in CV infrastructure? – In what applications is CV infrastructure most likely to provide a positive return? • Subsidize CVs. – What level of incentive (price) is needed to motivate the auto owner? – What is the estimated level of public good that comes from retrofit and that would justify government subsidy? • Implement land use policies and parking requirements. – What is a new policy framework for parking and its evo- lution in terms of AVs? – What is the financial impact of reduced parking demand? • Grant AVs and CVs priority access to dedicated lanes. – What levels of AVs are prioritized? Are CVs or SAVs pri- oritized? In a simultaneous arrival situation, which of the technologies have ultimate priority access? – What level of incentives (if lanes are priced) are effective in managing their use or discouraging their use?