3 ms·

Since you brought up insurance, here's a third option: leave it up to manufacturers and consumers to determine how liability is structured in their private agre

by buu700 5y ago

Since you brought up insurance, here's a third option: leave it up to manufacturers and consumers to determine how liability is structured in their private agreements, but make self-driving car insurance mandatory. This could even be enforced by mandating that new vehicles refuse to activate self-driving mode without a valid token as proof of insurance. With a system like that, the market would ultimately work out an optimal solution. Vehicles with safer technology and greater manufacturer liability would be subject to lower insurance rates, while on the other end of the spectrum consumers would be responsible for paying for the externalities of their choices. No one is going to use a self-driving mode that costs more than the vehicle itself to insure, so in theory manufacturers will be more strongly incentivized to get this right. Edit: A follow-up thought: self-driving car insurance should be independent of manual car insurance. They could be bundled together for savings, but someone who doesn't intend to drive manually shouldn't be required to purchase two types of insurance. Eventually, as the technology improves, self-driving insurance will become cheaper than manual insurance. This model also neatly solves the current issue of enforcing insurance requirements. If self-driving mode can require a valid insurance token, then so can manual driving mode.

TrainedMonkey 5y ago
This. Insurance is how liability should be handled because that aligns incentives for everyone. Tesla's approach "it's drivers responsibility to pay attention" is a cop out and "manufacturers are responsible for 100% of everything that happens when automation is active" will stifle tech development. Insurance can set premiums based on number of accidents in the area and let market find most efficient solution.
- elliekelly 5y ago
  Insurance is about shifting risk. Sometimes shifting the risk aligns incentives and/or efficiently allocates the costs of the risk but it’s far from guaranteed.
  - buu700 5y ago
    It's not guaranteed, but there's money to be made for anyone who can accurately assess the risks and determine optimal rates. Price too low and the payouts will put you out of business; price too high and the competition will eat your lunch.
- buran77 5y ago
  > "manufacturers are responsible for 100% of everything that happens when automation is active" will stifle tech development That's... technically true but not at all an acceptable explanation for anything. We don't just go ahead and do whatever we want to "speed up innovation". All kinds of abuse constantly gets bundled under the "only way to innovate" umbrella. If a manufacturer advertises a feature and even charges money for it then it certainly should take responsibility for the feature working as expected and for the fallout from any failure outside of user control. The customer insures against things that are their own doing, or simply cannot be assigned to someone (weather?). The company pays for it's mistake directly, not via "market forces". That's why companies don't get out of such lawsuits by just claiming "innovation" and "the market will deal with us". "Driving" is absolutely core to a car. It's not a GPS where the manufacturer can or should be able to just say "we take no responsibilities for the outcome of a GPS or (self)driver malfunction". If the insurance on your car suddenly triples because the stuck accelerator pedal caused accidents, you're now left with a car which is not only terribly expensive to operate but also impossible to sell because the expense follows the car. All because of something the manufacturer caused. And that will also stifle innovation in all kinds of ways.
  - Jiro 5y ago
    Insurance shouldn't (but probably will anyway) go up when your brake pedal is discovered to be defective, because the insurance is there to pay for the financial loss caused by the defective pedal. The loss in the resale value of your car and the increase in future premiums are losses caused by the defective pedal. Of course, the insurance company can simplify this by just not charging you more for future premiums, rather than paying you for future premiums and taking it back later. And by not charging other people more for future premiums, they preserve the resale value of the car. This is an automobile equivalent of "why health insurance should cover preexisting conditions"--any increase in future premiums caused by your condition is an expense caused by the condition, so your insurance should pay for it. If you switch companies, technically the first company should pay for the increased premiums from the second company, but averaged over the whole market this is still equivalent to just not increasing premiums.
    - 5y ago
- wolverine876 5y ago
  > "manufacturers are responsible for 100% of everything that happens when automation is active" will stifle tech development So does food safety, regulation of harmful chemicals, etc. Do we have a shortage of tech development? For self-driving cars? Are these companies so fragile?
johannes1234321 5y ago
How does it help the victim of the accident? The owner of the vehicle got the cheapest package and nobody will cover the victim. This is the reason why we demand drivers to have an insurance and don't leave it to the owner to figure this out. Without regulation this doesn't work as not everybody who in the end is affected is involved in the negotiation when buying the insurance.
- s1artibartfast 5y ago
  >How does it help the victim of the accident Insurance payout goes to the victim. >The owner of the vehicle got the cheapest package and nobody will cover the victim. Like regular insurance, 2nd party liability is mandatory.
rapind 5y ago
A model where the manufacturer is responsible is also leaving it up to the market. All you're doing is assigning blame where it belongs (the actual driver being the software and not the end-user). The manufacturer (or their insurer) will find the sweet (market) spot between safety and costs, where costs include not just manufacturing but the legal repercussions. Putting the onus on the end-user is messy and wasteful from a market efficiency stand point. It may benefit Elon to make the user at fault, but it's just as "socialist" (or more-so) than putting the onus on the manufacturer. I think the bigger concern is how to assign fault. If you allow the end-user to override the software then you'll need an objective 3rd party to determine blame (not the manufacturer or the end-user).
suifbwish 5y ago
It’s my opinion that until the next major breakthrough in AI, all self driving cars should be unable to engage self driving mode if they detect more than a certain number of active vehicles on the road that are not self driving. There is no way in hell we are ready for self driving vehicles in crowded cities like Chicago or New York. For road trips through the rural areas sure! Navigating geometry is not the problem it’s decision making in complex real time environments.
wolverine876 5y ago
> leave it up to manufacturers and consumers to determine how liability is structured in their private agreements, but make self-driving car insurance mandatory. The free market's efficiency requires a balance of power and information. Similarly, in law, the validity of contracts depends on the relative position of the parties; the court will frown on a company that tries to enforce absurd contractual clauses on naive individuals. A car manufacturer has incredible power and resources (including lawyers, actuaries, etc.) compared to an individual consumer buying a car. What will a consumer do, hire their own legal team to call the general counsel's office of Mercedes and renegotiate the agreement? It will cost more than the car. Have you ever done that with any agreement with a corporation? We use our government to regulate where the market fails. Otherwise, we still have lead in gasoline, monopolies, etc.
cyanydeez 5y ago
Leaving things up to capitalism to solve has not worked. Regulation works. Standards works. Consumers get rug pulled.
YeBanKo 5y ago
No, don't leave anything up to consumer and manufacturer to figure things out. First of all, it not two way relationship, it is manufacture, insurance companies, consumer, other participants on the road and government in two capacities: as a an authority that sets the traffic rules and an another authority that maintains road infrastructure. These relationship is highly asymmetrical and tilted against the consumers, which asymmetry contract law won't work as expected.

by buu700 5y ago

TrainedMonkey 5y ago

This. Insurance is how liability should be handled because that aligns incentives for everyone. Tesla's approach "it's drivers responsibility to pay attention" is a cop out and "manufacturers are responsible for 100% of everything that happens when automation is active" will stifle tech development. Insurance can set premiums based on number of accidents in the area and let market find most efficient solution.

elliekelly 5y ago
Insurance is about shifting risk. Sometimes shifting the risk aligns incentives and/or efficiently allocates the costs of the risk but it’s far from guaranteed.
- buu700 5y ago
  It's not guaranteed, but there's money to be made for anyone who can accurately assess the risks and determine optimal rates. Price too low and the payouts will put you out of business; price too high and the competition will eat your lunch.
buran77 5y ago
> "manufacturers are responsible for 100% of everything that happens when automation is active" will stifle tech development That's... technically true but not at all an acceptable explanation for anything. We don't just go ahead and do whatever we want to "speed up innovation". All kinds of abuse constantly gets bundled under the "only way to innovate" umbrella. If a manufacturer advertises a feature and even charges money for it then it certainly should take responsibility for the feature working as expected and for the fallout from any failure outside of user control. The customer insures against things that are their own doing, or simply cannot be assigned to someone (weather?). The company pays for it's mistake directly, not via "market forces". That's why companies don't get out of such lawsuits by just claiming "innovation" and "the market will deal with us". "Driving" is absolutely core to a car. It's not a GPS where the manufacturer can or should be able to just say "we take no responsibilities for the outcome of a GPS or (self)driver malfunction". If the insurance on your car suddenly triples because the stuck accelerator pedal caused accidents, you're now left with a car which is not only terribly expensive to operate but also impossible to sell because the expense follows the car. All because of something the manufacturer caused. And that will also stifle innovation in all kinds of ways.
- Jiro 5y ago
  Insurance shouldn't (but probably will anyway) go up when your brake pedal is discovered to be defective, because the insurance is there to pay for the financial loss caused by the defective pedal. The loss in the resale value of your car and the increase in future premiums are losses caused by the defective pedal. Of course, the insurance company can simplify this by just not charging you more for future premiums, rather than paying you for future premiums and taking it back later. And by not charging other people more for future premiums, they preserve the resale value of the car. This is an automobile equivalent of "why health insurance should cover preexisting conditions"--any increase in future premiums caused by your condition is an expense caused by the condition, so your insurance should pay for it. If you switch companies, technically the first company should pay for the increased premiums from the second company, but averaged over the whole market this is still equivalent to just not increasing premiums.
  - 5y ago
wolverine876 5y ago
> "manufacturers are responsible for 100% of everything that happens when automation is active" will stifle tech development So does food safety, regulation of harmful chemicals, etc. Do we have a shortage of tech development? For self-driving cars? Are these companies so fragile?

johannes1234321 5y ago

How does it help the victim of the accident? The owner of the vehicle got the cheapest package and nobody will cover the victim. This is the reason why we demand drivers to have an insurance and don't leave it to the owner to figure this out. Without regulation this doesn't work as not everybody who in the end is affected is involved in the negotiation when buying the insurance.

s1artibartfast 5y ago
>How does it help the victim of the accident Insurance payout goes to the victim. >The owner of the vehicle got the cheapest package and nobody will cover the victim. Like regular insurance, 2nd party liability is mandatory.

rapind 5y ago

A model where the manufacturer is responsible is also leaving it up to the market. All you're doing is assigning blame where it belongs (the actual driver being the software and not the end-user). The manufacturer (or their insurer) will find the sweet (market) spot between safety and costs, where costs include not just manufacturing but the legal repercussions. Putting the onus on the end-user is messy and wasteful from a market efficiency stand point. It may benefit Elon to make the user at fault, but it's just as "socialist" (or more-so) than putting the onus on the manufacturer. I think the bigger concern is how to assign fault. If you allow the end-user to override the software then you'll need an objective 3rd party to determine blame (not the manufacturer or the end-user).

suifbwish 5y ago

It’s my opinion that until the next major breakthrough in AI, all self driving cars should be unable to engage self driving mode if they detect more than a certain number of active vehicles on the road that are not self driving. There is no way in hell we are ready for self driving vehicles in crowded cities like Chicago or New York. For road trips through the rural areas sure! Navigating geometry is not the problem it’s decision making in complex real time environments.

wolverine876 5y ago

> leave it up to manufacturers and consumers to determine how liability is structured in their private agreements, but make self-driving car insurance mandatory. The free market's efficiency requires a balance of power and information. Similarly, in law, the validity of contracts depends on the relative position of the parties; the court will frown on a company that tries to enforce absurd contractual clauses on naive individuals. A car manufacturer has incredible power and resources (including lawyers, actuaries, etc.) compared to an individual consumer buying a car. What will a consumer do, hire their own legal team to call the general counsel's office of Mercedes and renegotiate the agreement? It will cost more than the car. Have you ever done that with any agreement with a corporation? We use our government to regulate where the market fails. Otherwise, we still have lead in gasoline, monopolies, etc.

cyanydeez 5y ago

Leaving things up to capitalism to solve has not worked. Regulation works. Standards works. Consumers get rug pulled.

YeBanKo 5y ago

No, don't leave anything up to consumer and manufacturer to figure things out. First of all, it not two way relationship, it is manufacture, insurance companies, consumer, other participants on the road and government in two capacities: as a an authority that sets the traffic rules and an another authority that maintains road infrastructure. These relationship is highly asymmetrical and tilted against the consumers, which asymmetry contract law won't work as expected.