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Apple's biz model will backfire in self-driving cars

They will need standardised software to talk to one another & avoid crashes

Noah Smith | Bloomberg 

Apple's biz model will backfire in self-driving cars

Fans of self-driving cars will have breathed a sigh of relief at the news that Uber and Google’s Waymo, two giants in the industry, have settled their intellectual-property lawsuit. This removes a huge distraction for companies, and freeing them up to focus on their own research.

So that’s good. Driverless cars will be an incredible boon to society. They could save tens of thousands of American lives every year, and even more in countries such as India and China, and prevent millions of injuries. They could save the average American hundreds of hours each year. And they could eliminate the stress of driving, improving health and quality of life for billions.

The positive, transformative potential of self-driving cars is hard to overstate. Thus it’s great to see the US government thinking about how to regulate autonomous vehicles well in advance of the technology’s wide adoption. Bipartisan legislation has been introduced in both the House and Senate to harmonise rules at the federal level, while the is trying to remove unnecessary regulatory barriers. Meanwhile, Senators Bill Nelson, Gary Peters and John Thune have put forward a set of principles they plan to use when regulating self-driving cars.

Most of the principles are sensible — promoting safety, cybersecurity and education, while propelling innovation forward as fast as possible. But one of the principles — the principle of government remaining neutral toward alternative —deserves some closer examination.

Unlike the normal, human-guided variety, self-driving cars work better as a network. When the vehicles talk to each other, they can avoid crashes much more effectively. But if Waymo cars don’t talk to cars, that will reduce safety for everyone on the road.

That means companies have an incentive to wire their cars to talk to each other, right? Maybe not. Lack of interbrand communication would mean that each buyer would have an incentive to purchase a vehicle from the most dominant or popular brand, because that would have the largest number of other cars it could talk to. In other words, there’s a real danger that companies will try to be like Apple, limiting interconnectivity in order to try to turn the auto market into a closed, monopolised ecosystem.

The potential profit from monopolising the auto market — or even just the of that market — is vast. Suppose that people are willing to pay $10,000 for the software that controlled a self-driving There are about 17 million new cars sold in the US each year. Just multiplying those two numbers would translate to revenue of $170 billion a year, or almost as much as’s sales last year.

But if the company was a true monopoly — if you had to buy your self-driving software from one company or suffer a much higher risk of injury and death — it would act to maximise its profit. That is what monopolies do. It would raise prices, restrict output and make it harder for a middle-class person to own a

A monopoly in would be bad for not just consumers, but also for workers. For any number of reasons, government should act to prevent one company from dominating this industry.

The traditional way to deal with a monopoly is to break it up, as AT&T was ordered to break up in 1982. But in the case of self-driving cars, doing so would leave the road less safe overall, since we’d be left with a bunch of smaller brands whose cars couldn’t talk to each other.

A better idea is for the government to mandate that all autonomous cars be able to talk to each other. The easiest way to do that is to mandate that self-driving software companies make public all of the software and protocols that they use for communications between cars. If regulators enact this rule early on, it would allow companies to develop their systems around a universal, shared from the ground up. That would be true tech neutrality, with no one system having a market advantage.

This sort of rule would prevent safety-based monopolisation of the auto fleet. But in spirit, it’s really more similar to something the government has been doing for centuries — harmonising weights and measures. That’s such an essential, useful government function that it’s actually written into the US Constitution.

© 2018 Bloomberg

First Published: Sun, February 18 2018. 22:30 IST