In my hometown of Pittsburgh, Uber is working with my alma mater, Carnegie Mellon, to test its driverless cars. A little over a year ago, Uber’s Advanced Technologies Center opened in partnership with Carnegie Mellon University. Since then, Uber has been revving up its autonomous car testing team. Now, you can find its Self Driving Vehicle (SDV, a.k.a fully autonomous vehicles, i.e. driverless cars) out on the roads of the Steel City to test its real world capabilities.
While driverless cars seems like a solution for Uber, legal issues remain. Sure – SDVs may omit all of the driver-related legal issues that continues to haunt Uber. Bur new and not fully resolved issues emerge. For one, NHTSA has considers the “driver” of SDVs to be the system itself. Thus, in response to Google’s own inquiry (a different project than Uber’s) NHTSA indicated that for Google’s SDVs, the system is deemed the “driver”. This leads us back to the question of who or what is the driver of an SDV.
How might this get parsed for insurance coverage? Good question. The insurance industry will get back to us on that.
According to a McKinsey & Company report suggested how they might do so:
Car insurers have always provided consumer coverage in the event of accidents caused by human error. With driverless vehicles, auto insurers might shift the core of their business model, focusing mainly on insuring car manufacturers from liabilities from technical failure of their AVs, as opposed to protecting private customers from risks associated with human error in accidents. This change could transform the insurance industry from its current focus on millions of private consumers to one that involves a few OEMs [original equipment manufacturers] and infrastructure operators, similar to insurance for cruise lines and shipping companies.
In all probability, liability arising from a car crash with a driverless system will trace back to the manufacturer. This concern may discourage a lot of potential manufacturers from leading the race to develop the best autonomous systems. But, Google, Uber and GM–among other companies–are certainly investing a lot of time and money into developing SDVs.
Remember, too, that Google’s self-driving cars have already gotten into a few minor accidents. As we all know, technology is not perfect. And when technology fails, the SDV manufacturers will be the ones burdened with huge liabilities. Time for them to start getting more insurance, while perhaps not so much for individual consumers.
It’s summer, which means many of us are opting to find creative, less expensive ways to get to the airport. Personally, I’m in the minority among my friends when it comes to ride-hailing services like Uber. Why? I know too much about the insurance pitfalls, and can’t help but think about what might happen in the off chance that me or my family member might get injured as an Uber passenger.
Several days ago at a friend’s BBQ, I ran into one of my favorite neighbors who told me not to hug her too hard because she was involved in a horrible car accident with an Uber driver. When I asked her who was going to help her pay her medical bills, her response: “Good question. We’re still trying to figure that one out.”
This is one of the many problems that I have with ride-hailing services: They’re trying to have their cake and eat it too. Why is it that they have escaped regulations and yet can exploit loopholes by calling themselves an “app” provider? They are quasi-taxi services, that have somehow figured out how to avoid the massive fees like medallions that hard-working taxi-drivers must deal with. Despite the many headlines that keep popping up about Uber tragedies, where lack of insurance persists as a critical issue, people are willing to turn a blind eye because they think they’re saving money.
True: In California, Washington and other states, we are seeing more laws pass to address the insurance coverage gap. Thank goodness. But this still doesn’t make things as straightforward as if you were injured in a taxi or your friend’s car. Many Uber drivers have still not disclosed to their insurance companies that they derive some of their income as ride-hailing drivers. Ooops. What do you think their insurers will say, when they find out after their insured gets into an accident with some injured passengers?
Is it worth it, if you find yourself in an accident as an Uber passenger or in a car that an Uber driver hits while it’s carrying Uber passengers? Think long and hard the next time you want to use that clever app. Please.