How the Future of Mobility Will Transform Regulation of the Transportation Industry

By Mary Reusch

The speed at which mobile technologies have become integrated into automotive manufacturing has accelerated faster than many Americans realize. In fact, according to BCG, connected vehicles will account for 100% of the U.S. auto market by 2035, which means that “cars will operate more like smartphones” by providing travelers with connectivity, guidance and opportunities to improve productivity while riding in their cars.

Of course, today’s news headlines regarding mobility and automotive manufacturing are dominated with stories related to the microchip shortage and supply chain delays that could stretch into 2023. But for those looking beneath the hood, a longer-term challenge that must be confronted is how federal and state government regulations must evolve to keep pace with the future of mobility in the transportation industry.

“The automotive industry is in the grip of a technological revolution that promises to make connected and autonomous vehicles a reality, as well as bring electric mobility to the masses,” write Jakob Krupa and Xu Yuan, senior correspondents for MLex, a LexisNexis company. “But regulators need to step in to help the industry — from carmakers, through tech giants to fuel companies — resolve legal, technical and ethical quandaries.”

MLex has just published a special report, “Future Mobility: A New Frontier,” which explores some of the key lawmaking, regulation and litigation that is likely to shape the global development of connected and autonomous vehicles with mobile technologies.

The report identifies four key areas to monitor as mobility transforms the regulation of the transportation industry:

Connected Vehicles

Connected vehicles will be safer, more earth-friendly and more intelligent. For example, by helping drivers avoid heavy traffic and flagging issues with the vehicle’s health, mobile tech will help reduce human errors, which are believed to be a factor in up to 95% of accidents. But regulators have their hands full with determining what is considered personal data in the context of connected vehicles.

“Multiple datasets strictly about a car’s performance are arguably not personal,” Krupa and Yuan write. “Lawmakers will need to agree on data governance policies with appropriate privacy safeguards, determining what is personal and needs to be protected, and what is not and could be confidently shared and stored in the broader ecosystem.”

Autonomous Vehicles

Despite the hype around “autopilot” technology on some vehicles, the truth is that most autonomous vehicles are only at level two on a five-point scale; drivers must still be ready to take back the wheel at a moment’s notice. That gap will close in the decade to come, however, as mobile technologies creep toward full driving autonomy and self-driving taxis.

There are some important rules surrounding autonomous vehicles that will fall to regulators to build out in the next few years. For example, some U.S. lawmakers have proposed a Self Drive Act covering safety standards, cybersecurity and privacy issues, and a comprehensive federal regulatory framework. There are also important liability considerations that will need to be defined by new statutes in the years ahead.

Electric Vehicles

Concerns about climate change have prompted governments from the UK to China to lay out major initiatives for carbon reduction. This has led to a boom in the production of electric vehicles and the passing out of fossil fuel-powered vehicles. As a percentage of new-car sales, electric models are still in single digits, but that share is growing rapidly.

These aggressive government mandates for zero-emission vehicles require bold investments by manufacturers, but they also pose numerous regulatory challenges for government agencies. One key battleground centers around competition law and state aid rules, as governments explore creative strategies for seed funding of factories and charging centers.

Industry Consolidation

Aside from the technology race, the proliferation of mobility in the transportation industry is likely to have significant implications on the competitive landscape of the industry itself. We will continue to see more unusual partnerships emerge — such as Intel’s acquisition of Mobileye and alliance with Chinese automaker Nio — as automotive manufacturers team up with tech companies to try to break out of the pack.

This consolidation trend will force regulators to make important decisions to protect the marketplace for consumers, in terms of pricing and distribution. Experts warn that it is essential for consumers to have confidence in the integrity of how the market functions and how it is regulated if they are to jump in with both feet.

“The burgeoning of the industry has attracted big money and fierce competition in the new mobility frontier,” according to Krupa and Yuan. “But without proactive, transparent regulation, it will not win the public’s trust. While the cars may be on their way to becoming driverless, the nascent industry still desperately needs someone in the driving seat.”

Download a complimentary copy of the MLex report Future of Mobility: A New Frontier to learn more.