Hyperloop and autonomous vehicles: disruption ahead?
Do hyperloop and autonomous vehicles represent the future? MARTIN WATT, Counsel, and ZARA SKELTON, Senior Associate, at Dentons examine some legal and policy issues to be addressed for each technology in four key areas
THE longevity of existing rail and road transport technologies has been remarkable, but it’s plain that both now face a disruptive challenge from hyperloop and from the rollout of autonomous vehicles.
To realise the benefits of these new technologies, however, policy challenges must be overcome. Law and regulation must adapt so the new modes are not hampered by inappropriate rules, and so there are safeguards against the new risks they create.
Rollout
Hyperloop: This involves pods travelling in a tube under low air pressure conditions. Speeds of up to 700mph have been mooted, with pods using magnetic levitation to glide above a track using electric propulsion. In operation it will be an on-demand autonomous vehicle system.
One well-known organisation working on the technology is Virgin Hyperloop One. It recently announced backing from Sir Richard Branson, and has received $425m (£321m) from various investors (including SNCF) as well as the support of many technical partners (including Deutsche Bahn). Its goal is to have a hyperloop system in service by 2021, and following a competition it has selected ten potential routes, including two in the UK.
Other firms pursuing the concept include Space X, which has a facility in California to test pod designs presented to it as part of a global challenge, and Hyperloop Transportation Technologies, a global organisation of engineers and scientists partnering with Atkins, among others.
Two key impediments to the progress of these projects are: there is no existing infrastructure to use or develop from; it is so innovative that governments have so far shown curiosity, but less in the way of practical support.
In the UK, for example, the Government has been quite quiet on the subject. It made clear in late 2016 that while it is looking into hyperloop, current policy is based on the proven technology behind HS2, stating: “Utilising untested systems risks delays to the delivery of the much-needed additional capacity to our network and increases the potential risks to cost and programme.”
The way in which hyperloop is being developed is therefore markedly different from the way more traditional grands projet such as HS2 are implemented.
Interest has gradually built since 2013, when basic ‘open source’ details of the proposed technology were released by Elon Musk to try to kick-start development for all to use.
Nothing at this stage was protected by patent. Since then, private entities rather than governments have been trying to take the concept forward, using the open source material as a basis. They have been doing so using nontraditional methods - including using crowd-funding, and running competitions to help choose routes and pod designs.
Land acquisition, planning and building of the tubes needed for the hyperloop system (either on columns or in tunnels) will be difficult, although the Development Consent Order process may streamline this.
Hyperloop will need the tubes it runs in to be relatively straight, to allow for high speeds to be built up and maintained. This may make choosing and then obtaining the rights to a route in the UK difficult. As such, it raises issues similar to those being dealt with by HS2, including in relation to environmental protection and compulsory purchase of land. A Hybrid Bill is likely to be needed.
Even though two UK routes have been selected by Virgin Hyperloop One as winners, it may be more realistic to expect first use of the technology to take place in a location where both the geographical and regulatory landscape are simpler.
Autonomous vehicles: With the infrastructure already there for autonomous vehicles, the main challenge is getting access for testing and development. In some jurisdictions, permits or hefty surety bonds are required before testing can occur. In the UK, in contrast, regulation is not a barrier to the testing of automated vehicles on public roads. Testing can go ahead provided a test driver is present, takes responsibility for the safe operation of the vehicle, and the vehicle complies with road traffic laws. This has encouraged companies to use the UK as a testing site.
Regulation and Safety
Hyperloop: It is not immediately clear how hyperloop would be regulated in the UK. It seems unlikely that the hyperloop system as currently envisaged would be a railway within the remit of the Office of Rail and Road (ORR), although it may be that amendments could be made to the ORR’s statutory remit to allow it also to regulate hyperloop. Alternatively, a new regulator could be created for the specific purpose of doing so.
Whichever course is chosen, the UK will need to develop the regulatory system while the technology is also developing. It may be useful to borrow the idea of a regulatory ‘sandbox’ from energy regulator Ofgem. This is designed to allow “innovators to trial business propositions that will benefit consumers without incurring all of the usual regulatory requirements”, by entering into dialogue with Ofgem about the eventual regulatory needs of the proposed innovation.
Virgin Hyperloop One has said that it is already working on a safety case. It will need to establish new certification processes and to deal with the risks of both physical and cyberattack to the system.
Again, it is unclear which body would perform the safety regulatory function in respect of the safety case in the UK, but a first port of call may be the Health and Safety Executive.
Autonomous vehicles: Road vehicles must be ‘type approved’ under EC Directives and UN Regulations. This requires all vehicles to have testing, certification and production assessed by an independent body. Given the incremental development of autonomous technology, the UK Government has identified the need for a “rolling programme of regulatory reform”, providing the best environment for such a technology to thrive, unimpeded.
The growth of connected and autonomously operated vehicles will create an enormous amount of personal data about matters such as driver location, journey patterns and driving habits. Users and regulators of the technology will want this data to be properly used and protected. Automotive companies will want to use the information in tailoring and marketing products, in improving services, or in creating new revenues. However, there is also scope for it to be misused or subjected to cyber-attack.
The Information Commissioner’s Office has said that processing connected car data poses “a heightened risk of intrusion into individuals’
work and private lives”. It has recommended that “privacy protections are built into the design and development of new products and services”. This is reinforced by the new EU General Data Protection Regulations 2016, coming into force in May 2018 and calling for a privacy by design approach.
Also, the Department for Transport and the Centre for the Protection of National Infrastructure have recently published Key Principles of Cyber Security for Connected and
Automated Vehicles, designed for use throughout the sector. As for any potential for changes under the Data Protection Act, in a recent speech the Secretary of State for Transport said that data handling is a matter for vehicle manufacturers and service providers, but also that research projects will help provide evidence of how data should be recorded and shared.
Use/Protection of Concepts
Hyperloop: Following the early reliance on open source material, each project has since issued several patent applications for various parts of the system they have developed. A key question will be whether the different systems will try to retain a degree of standardisation to promote future interoperability, or whether a model of purely standalone projects will prevail.
Autonomous vehicles: Rollout of autonomous vehicles is likely to require manufacturers, third party suppliers and technological firms to collaborate in creating standardised specifications. At the same time, car manufacturers have been seeking to patent their inventions and obtain a competitive advantage.
Standards-setting organisations such as the European Telecommunications Standards Institute have been working on specifications in this area for some time. Standard-essential patents which must be licensed to all on fair, reasonable and non-discriminatory (FRAND) terms may also play a role in ensuring the technology owner cannot impose unreasonable terms on other users.
Managing Liability
Hyperloop: The classic rail network provides a clear model for managing issues of liability to third parties and within the system. Insurability of those liabilities is likely to be a key regulatory requirement (as for the classic rail network), and will be key to their financing. The challenge for hyperloop lies in finding a market for the ‘first of a kind’ risks that need to be covered.
Global insurance company Munich Re carried out a risk analysis of HTT’s Hyperloop technology and concluded that hyperloop is insurable. The next stage of their collaboration is to develop a Hyperloop Insurance Concept. It “will comprise not only traditional risk transfer for the relevant risk categories, but also risk-derived capital solutions to reflect the different stages of the HTT corporate development lifecycle and various challenges encountered in each phase of that lifecycle”.
Autonomous vehicles: Aaccidents involving autonomous vehicles will raise new questions in assigning responsibility for an accident, and protecting against its results. A given incident may have been contributed to by poor driving, a faulty algorithm or sensor, the car owner’s failure to download a software patch, or poorly designed roadside infrastructure.
In EU member states, laws transposing Council Directive 85/374 ensure an injured consumer can seek action against a vehicle manufacturer or importer for supplying a ‘defective’ vehicle, without proof of fault. Alternatively, a claim in negligence could be brought as drivers and manufacturers each have a duty of care, and will be liable if they breach this duty.
Meanwhile, the Government has published the Automated and Electric Vehicles Bill, setting out new motor insurance rules. It proposes to supplement the existing requirement for drivers to have third party liability insurance with a rule that if an autonomous vehicle is insured and causes an accident when driving itself, the insurer is liable for the damage.
Conclusions
Policy makers are clearly alive to the benefits of these new transport technologies. and in many areas are seeking to pave the way for their implementation. The future for personal transport certainly looks interesting.