Future Tense

Arizona’s Lax Approach to Regulating Self-Driving Cars Is Dangerous—and Paying Off

At least in the short term.

SCOTTSDALE, AZ  - MAY  14:  Arizona Gov. Doug Ducey listens as former Florida Gov. Jeb Bush speaks at a dinner during the Republican National Committee Spring Meeting  at The Phoenician  May 14, 2015 in Scottsdale, Arizona. Bush, brother of former President George W. Bush and son of former President George H.W. Bush, is widely expected to run for the Republican nomination for president in 2016.  (Photo by Laura Segall/Getty Images)
Arizona Gov. Doug Ducey turned his state into ground zero for autonomous vehicle technology. Laura Segall/Getty Images

On Monday night, Arizona Gov. Doug Ducey rescinded Uber’s authority to test autonomous vehicles on the state’s streets, following the March 18 crash in Tempe that killed Elaine Herzberg.

Uber had already suspended its AV program in the wake of the incident, as it has routinely done after crashes. Since then, the investigation has revealed a safety protocol with more holes than a Scottsdale golf course. Video from the crash revealed that the woman had not come “from the shadows right into the roadway,” as Tempe Police Chief Sylvia Moir initially said, but had already crossed several lanes of open, if darkened, asphalt before being hit by the computer-navigated Volvo SUV. Numerous experts said the oversight indicated a serious, inexplicable flaw in Uber’s LIDAR technology; rival companies chimed in to say their systems would have detected Herzberg. The New York Times obtained documents showing that Uber’s vehicles could hardly make it 13 miles without requiring what the industry calls “disengagement”—the human backup seizing the wheel. (Waymo averaged 5,600 miles per disengagement in California in 2017.) And although Waymo has had empty robot cars shuttling around Phoenix since October, the video from Tempe, which showed Uber’s test driver looking down for prolonged periods before the crash, raised questions about the efficacy and ethics of human supervision of AVs.

Still, it represented quite the about-face for Ducey, a first-term Republican who has established Arizona as a Wild West for Silicon Valley companies encumbered by the California regulatory state. A moving violation by a self-driving Uber brought the company to Arizona in the first place: In December 2016, the company put driverless cars on San Francisco streets without acquiring the proper permits from the state. Within hours, one of the cars had run a red light. The California DMV revoked the vehicles’ registrations. Uber said the incident was human error; a leak later revealed it was the navigation system, which had also “failed to recognize” five other traffic lights in the city.

Come to Arizona and forget your troubles, Ducey offered. “Arizona welcomes Uber self-driving cars with open arms and wide-open streets,” he said shortly after Uber skirmished with Sacramento. “While California puts the brakes on innovation and change with more bureaucracy and more regulation, Arizona is paving the way for new technology and new businesses.” Uber shipped its fleet to Arizona. The state didn’t even impose the California-style reporting requirements that reveal how good each program’s software is.

It is impossible to ignore the parallel to Theranos, another venture capital-backed company that promised big things from its technology. Back in the spring of 2015, Ducey staged a photo-op at the blood testing start-up’s lab in Scottsdale to sign a law (co-authored by the company) that allowed Arizonans to request their own bloodwork without a doctor’s note. Theranos installed itself in Walgreens around the Phoenix area. A year later, the pharmacy had canceled the deal, Theranos was under federal investigation, and founder Elizabeth Holmes was banned from working in its labs. In April, more than 175,000 Arizonans who may have received defective blood tests were offered refunds from the company in a settlement.

The moral of the story seems to be that if you lower the bar low enough, you’ll get competitors who can barely get over it. For Arizona, that meant the arrival of two companies—Theranos and Uber—still working to figure out technology that they had already unleashed on the public.

But just as the Theranos law allowed a more established blood-test competitor, Sonora Quest, to roll out controversial consumer-facing lab testing in Safeway supermarkets, so did the state’s permissive vehicle testing laws (and steady climate and auto-friendly sprawl) lead Google’s Waymo to make Phoenix ground zero for its autonomous taxi service. On Tuesday, Waymo CEO John Krafcik raised the curtain on a self-driving, electric Jaguar I-Pace and announced that the companies plan to manufacture up to 20,000 vehicles over the next two years. With that number of cars, Krafcik said, Waymo could offer a million trips a day. The service will go to market in a 100-square-mile service area of Phoenix.

So maybe Ducey is winning. Arizona was the state where America got its first driverless car fatality. It will also be the state that inaugurates the world’s first true driverless taxi network. The first thing is a tragedy; the second, even to a cynic, a remarkable achievement.

But that robot taxi service may be an ephemeral victory. Krafcik is confident Waymo’s operations will soon expand to other cities, and Jaguar Land Rover CEO Ralf Speth is excited about putting the autonomous I-Pace on the showroom floor. Congress nearly pre-empted state and municipal authority to regulate autonomous vehicles this winter. In any case, what begins in Phoenix will soon be elsewhere. In the meantime, there’s no reason to think Waymo’s network will permanently alter Phoenix’s development, economy, or reputation—at least not much faster than it does the same in other cities. The big-picture changes wrought by driverless cars will take years, if not decades, to take effect. The first-mover advantage accrues to Waymo, not to Phoenix.

What Arizona gets for going first is to be the guinea pig, to test changes to mobility, congestion, curb space, parking lots, traffic tickets, and yes—bicycle and pedestrian safety. The experiment has just begun.