Rethinking regulation can fuel self-driving car innovation: Lessons from Israel

Autonomous vehicles (AVs) can improve road safety and alleviate traffic congestion. Since AVs do not need a driver, they can also cut mobility costs by some 70%. But since it could be cheaper to run “dead-heading” AVs than to pay for parking it when not needed, AVs could also increase congestion in city centers, and if the vehicles’ tailpipe isn’t zero emissions, decrease air quality in dense areas while increasing carbon emissions and noise pollution.

To ensure the technology’s benefits are fulfilled, it is necessary to create a comprehensive regulatory framework for autonomous vehicles trials and commercial operation. Regulating technology poses a great challenge for regulators all over the world, forcing them to adapt new approaches to regulation. Such new approaches can help countries transition away from 20^th century transportation solutions and ensure countries can embrace the groundbreaking technologies of the future.

To this end, Israel’s Ministry of Transportation (MOT) partnered with the World Economic Forum’s Centre for the Fourth Industrial Revolution for promoting the integration of agile regulation that would accelerate the shift to a smarter, cleaner and safer mobility system.

The Centre for the Fourth Industrial Revolution Israel, hosted by Israel’s Innovation Authority, assisted MOT in shaping a new work process for developing Israel’s regulatory framework for the commercial deployment of autonomous vehicles. The process comprised three key elements: (1) cataloguing AV policies and best practices in leading nations and states; (2) creating multi-stakeholder engagements to ensure that regulations could keep up with technological innovation; (3) shaping a dynamic regulation capable of responding to technological advancements while placing it on path for a more sustainable and inclusive mobility ecosystem.

Our collaboration with the Israeli MOT, foreign regulators and mobility community over the past few months taught us a few critical factors for forming an efficient and successful regulatory framework for developing and implementing innovative technologies:

The entry of innovative technologies into heavily regulated traditional sectors, such as transportation, have forced regulators all over the world to adapt a new, more agile approach to the regulatory process. At the core of this approach lays the understanding that innovative technologies are developing at a rapid pace, which mostly does not match the pace of regulation, and that the average regulator usually does not have the necessary technical knowledge to regulate the field thoroughly. Multi-stakeholder dialogue and knowledge brokering are required for overcoming these gaps. Therefore, policy makers need to form cross-ministerial partnerships and regularly consult with industry, academy and non-profit actors. For example, Singapore established a committee (CARTS) comprised of renowned international experts, academics and industry representatives. Sharing best practices with other regulators who are facing the same challenges, global and local, can also accelerate and improve the collaborative policy efforts.

The complexity and novel nature of technology is not served by traditional ‘top-bottom’ regulation. Technology’s shifting demands require regulators to work closely with the industry and tech companies, to create regulatory frameworks that ensure public interests (safety, privacy, etc.) while enabling further technological developments. To this end, our work included a series of dialogues that presented many stakeholders with the opportunity to voice their needs and concerns. These conversations proved particularly important because they enabled Israeli regulators to tune in to leading Autonomous Vehicle companies not yet operating in Israel. Companies such as Cruise, Waymo and Zoox engaged directly with Israeli regulators, during community sessions and regulatory workshop held in San Francisco.

Regulators should use agile regulatory tools, in order to have the ability to amend and change regulation easily and quickly, in accordance with technological developments. For example, a regulatory sandbox can enable a safe environment for experimentation of innovative products, services and business models, without having to comply with existing regulation for a limited period and scope. Singapore has initiated regulatory sandbox mechanism in 2017 for pilots and special use of AV’s. Countries who make use of agile regulations, such as Singapore and the UK are better prepared for leveraging existing technologies and welcoming new technologies into their markets.

As disruptive technologies can be perceived as threatening and unsafe to use, it is more crucial than ever to engage with the public and gain its trust. Engaging with the public and different road users is essential to shaping regulation and enhancing public acceptance to new technologies. Different strategies for public acceptance such as public hearings, surveys and pilots that are open for public use have been key to developing AV policies in many leading countries. For example, the UK Law Commission introduced in-depth surveys for informing its AV policy recommendations, and California not only holds public hearings but also makes recordings of such meeting digitally available. Such measures provide transparency and forge trusting relationships.

These insights are just a sampling of the findings that surfaced from the Forum’s collaboration with the MOT. Together, the groups produced a comparative policy report, released last week by C4IR Israel and MOT. The report reviews and compares key AV policy approaches around the world. During the preparation of the report, C4IR Israel initiated a dialogue between Israel’s MOT, Ministry of Justice and AV regulators from Singapore, Australia, the UK, California and Arizona. Furthermore, by initiating workshops designed to deepen the knowledge and understanding of stakeholders in the field, we were able to enhance MOT’s engagement with other governmental agencies and non-governmental stakeholders such as leading AV companies, top researchers and nonprofit organizations. The report was released as a complementary step to a new AV legislation draft, which was released last August by MOT, permitting driverless pilots on public roads in Israel. A cross-ministerial committee for advancing the regulatory framework for AVs in Israel was formed – inclusive of both government and external experts in AV technology and regulation.

To be sure, regulation is just one piece of a very large puzzle. Going forward, we will extend our work to address the societal, economic, and environmental implications of AV adoption. This will include reviewing business models to ensure the tech does not only serve those that can afford an autonomous driving experience but also serve those that cannot travel without it. Groundbreaking tech must also be underpinned by infrastructure and robust community and citizen engagement, to see that users are not only educated about the disruption ahead but also have a chance to tweak it in ways that will improve user experience.

C4IR Israel, backed by the World Economic Forum and the Israel Innovation Authority, will continue to play a critical role in soliciting and aggregating stakeholders’ feedback to policy efforts and regulatory drafts, as well as facilitating a continuous dialogue with key global regulators and standardization efforts.

The regulatory process of AVs in Israel is an important case study, demonstrates how a country can adjust to innovative and disruptive technology, and successfully adopt an agile regulatory approach. The state of Israel invites interested parties to engage in the process and take part in designing Israel’s AV regulation.