President Obama recently told the editor of Wired that the government needs to ensure that emerging driverless car technology doesn’t benefit one segment of society over another. While on the surface this sentiment seems noble, such an approach to new technology is certain to stifle innovation.
The history of innovation shows that markets and enterprising entrepreneurs take care of distribution inequities quite nicely if unhampered by government regulators. Government, for example, did not try to force radios into every home in the 1920s. Even though sets cost the modern equivalent of about $2,000 at the time, competition and demand brought the price down enough that virtually every household had one within a few years.
The same may be said for televisions, automobiles, calculators, wrist watches and, despite talk 20 years ago about the digital divide, computers and smartphones.
And yet today government regulations — always enacted with the ostensibly noble goal of protecting the public — are threatening innovation. America should reverse course.
Two years ago, Amazon vice president of global public policy, Paul Misener, wrote a letter to the Federal Aviation Administration complaining that he had to move drone delivery tests offshore because of regulations. New FAA rules, enacted this year, require drone operators to remain within eyesight of their drones at all times, which makes deliveries impossible.
Misener wrote, “… unless substantial progress is quickly made in opening up the skies in the United States, the nation is at risk of losing its position as the center of innovation for the technological revolution, along with the key job and economic benefits that come as a result.”
Sure enough, last month Domino’s pizza announced it would begin drone deliveries in New Zealand. Using a smartphone app, customers can get the drone to lower the pizza via a tether once it is hovering over the delivery point. Reports say the company is poised to do the same in a host of European countries and Japan. Notably, the United States is not on the list.
Similarly, Amazon is set to begin delivery via drones in the United Kingdom. Britain’s Civil Aviation Authority has rules much more accommodating to innovation than the FAA.
Having lost out on at least the initial rollout of drone deliveries, the United States can’t afford to lose out on driverless cars, as well. Uber already has launched a fleet of these in Pittsburgh. Lyft is promising a similar fleet soon. Ford, GM and BMW promise a line of autonomous cars by 2021.
Certainly, government must play a role in providing rules allowing these cars to interact with other vehicles on the road. States need to change a number of laws to accommodate the changing technology. But, to be clear, it is the private investors who have the most to lose if their cars are not safe and reliable. Government needs to put faith in investor self-interest, which has worked time and again.
President Obama told Wired he believes in getting out of the way, and that “early in a technology, a thousand flowers should bloom.” That’s well said, but then he added that government needs to ensure equity in the self-driving car market because it has the potential to affect people greater than any previous technological change, and, “The social compact has to accommodate these new technologies.”
We agree this technology has the potential to change the world in many ways. But history argues this means it’s more important than ever to minimize governmental interference.