Regulation time-lag will hit driverless technology hard says leading consultancy BDO

Politicians are falling far behind the pace of technological change. First published on

The legislation surrounding driverless cars is lagging so far behind the technology involved that the industry is unlikely to see a regulatory framework in place any time soon says leading international business, finance and taxation consultancy BDO. And IEEE, "the world’s largest technical professional organisation dedicated to advancing technology for the benefit of humanity" can only see problems ahead as the politicians fall further and further behind.

BDO has been looking at a report from which reveals the confused state of the sector. The technology experts involved reveal that while US states such as California and Nevada have decided to allow self-driving cars on public roads as long as a human driver remains alert behind the wheel, other states are only allowing testing to take place on designated roadways.

And in Europe, the regulators have allowed limited tests of self-driving cars and tractor trailers while the UK has moved ahead and allowed authorised testing. The UK trials, which started last year, have enabled the British government to review road regulations to establish how to deploy fully autonomous shuttle vehicles on its roads.

There is a lack of consistency says the website, which describes itself as "the flagship magazine and website of the IEEE, the world’s largest professional organisation devoted to engineering and the applied sciences," designed "to keep more than 400,000 members informed about major trends and developments in technology, engineering, and science." says changes in the law cannot be delayed until the arrival of robotic driving. Things need to happen now because current laws leave too much room for uncertainty.

“A car company cannot be expected to invest in putting out a new fleet of autonomous cars when it could be forced to take them off the road after the first accident,” says and BDO agrees, arguing that it is next to impossible to update laws and regulations at the same speed at which driverless technology is being developed.

Also, a recent report from Euractiv raises another concern ... European Union countries will not be able to launch driverless cars before the US because 21 out of the EU's 28 member countries have signed the Vienna Convention on Road Traffic. This says that drivers must be allowed to take back control of the driverless vehicle at any time and does not allow them to run on public roads without a driver in control.

Violetta Bulc, the EU transport commissioner, says she is considering making changes to the Convention to allow cars to operate without assistance from a driver. And next year, Elzbieta Bienkowska, who is in charge of internal market policies, will announce whether any legal changes will be made to ease the way for driverless cars.

The main stumbling blocks for driverless cars, according to BDO, include insurance; how much users will pay; how companies can/will subscribe on behalf of their employees; taxation; book-keeping and auditing.

Harry Chana, partner and international tax practice leader at BDO Canada, says taxation will become an increasingly important issue for governments. How will car tax be gathered when there is such a big change in the ownership model? How will counties cope with a huge fall in fuel tax revenues if the majority of driverless cars are electric or hybrid vehicles?

The key element to the success of driverless cars, according to Chana, is the vehicle’s constant contact with its surroundings. “Who will maintain this infrastructure to allow driverless cars to function as they optimally should?" he asks. "From the car maker’s perspective, a subscription-based model may emerge for the owner of driverless cars. From the government’s perspective, unfortunately, the likely answer is some form of tax or levy.”

BDO estimates driverless cars will arrive in early 2021 based on predictions made by car companies, ride-hailing services and car technology suppliers in early 2018. The leading car manufacturers think that driverless technology will be ready on 11 June 2021. Meanwhile, ride-hailing services and technology suppliers predict the technology will be available by 14 March 2020.

Auto manufacturers and ride-hailing companies are investing in M&A to reach this goal.

A report by Hampleton says car companies are investing billions to incorporate artificial intelligence, augmented reality and technology which enhances driver experience and safety.

And, according to the technology merger and acquisitions company’s study, Ford has invested $1bn in Argos AI.

In Israel, Germany’s Continental acquired Argus Cyber Security, whose technology protects connected cars from being hacked for around $400m.

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