July 27, 2017 at 5:00 am ET
In just the past few weeks, committees in both the U.S. House and Senate have held hearings on opportunities and challenges related to the advent of automated vehicles. But while self-driving passenger cars attract most of the attention, it is the freight transportation sector that has advanced the furthest in adopting the new technologies. This is where there is the greatest near-term potential to reduce costs, increase efficiency and improve safety — but only if regulators are careful to allow the technologies to progress.
In a number of separate industries including trains, freight trucks and even drones, companies are making rapid advances in automation. Initially, the new technology helps drivers improve their safety through add-ons like automatic speed control, lane control and enhanced braking. Eventually, however, automation is likely to take over more of the operation, eventually replacing drivers completely. Although this possibility may not occur for decades or more, its arrival should be welcomed because it would increase safety, boost productivity, lower freight prices, and solve a growing shortage of drivers and pilots. Better freight transportation will benefit every business and consumer in America.
A recent report by the Information Technology and Innovation Foundation argues that regulators should try to advance these goals. The most important task is to base their decisions on a firm understanding of the technology and develop a strong fact-based justification for any new regulations. For example, in a recent proposed rule, the Federal Railroad Administration basically admitted that it lacked the information needed to assess whether two-person crews were associated with better safety than one-person crews.
Beyond that regulators should follow five basic principles. The first is to welcome new technology. Of course regulators need to maintain their concerns over public safety, both because that is part of their mission and because it is crucial toward getting public acceptance of new technology. But there is a big difference between a regulator that resists new technology because it might cause safety concerns and one that assists the technology in identifying and overcoming those concerns. Second, the regulator should recognize that companies usually have strong economic incentives to maintain good safety records even in the absence of regulation. The high cost of equipment, civil liability suits and the importance of public reputation all encourage firms to stress safety. This is especially true when public acceptance of a new technology is still low.
The third principle is that regulators should not favor one technology over another. Markets tend to be very good at weighing the various factors, such as price, safety, reliability and adaptability, that characterize each technology and picking the best. Instead regulators should make sure that each technology meets the appropriate safety mandates, and they should let companies compete on the other criteria. In order to do this, regulators need to avoid applying the same rules to different technologies and uses. Flying a drone near an airport or football crowd is much riskier than flying it over agricultural crops. The latter should face less regulation.
The fourth principle is that regulators need sufficient resources to enable them to regulate wisely. This includes making sure that agency personnel have a firm understanding of new technologies, knowing both the markets and the firms they regulate, building an accurate factual base and monitoring compliance with the rules. This requires Congress to give agencies an adequate budget, something that will become more difficult as mandatory programs take up an increasing share of government spending. Regulated firms have a strong interest in making sure that agencies have the resources they need, but also that they spend these resources efficiently.
Finally, regulators need to make timely decisions. In some cases, such as commercial drones, the absence of sensible rules can retard an industry and cause companies to move their development efforts overseas. Because the process of regulating can take years, rules must be forward looking and apply to future as well as current technology. This can be done if regulators concentrate on the general safety standards that new technologies need to meet rather than on the specific technology needed to meet them.
Americans need to get excited about the future once again. Given a stable environment and adequate support, scientific and technological advances will continue. But sound economic and regulatory policies are needed to ensure that these advances are quickly integrated into products and services that improve peoples’ lives. If we do this, all Americans can experience steady increases in the standard of living. Automation of the freight sector offers a clear example of these possibilities, including improved safety. Regulators should chart the path toward safer, cheaper transportation.
Joe Kennedy is a senior fellow at the Information Technology and Innovation Foundation, a leading science and tech policy think tank.
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