August 22, 2016

Autonomous vehicles - Driverless cars race shifts up a gear

Volvo and Uber have announced they are collaborating to produce autonomous vehicles, with testing of the first driverless taxi fleet to commence in the next few weeks. They aim to place themselves ahead of the competition in the race to create the world's first fully autonomous vehicle.

Ford recently announced that it would develop a vehicle with no steering wheels or pedals by 2021, with a view to them offering ride sharing services, when not being used by their owners.  Tesla has also made a similar pledge, creating a new technology arms race.

Volvo also recently announced that it will be testing its driverless cars on the UK streets. It reportedly picked the capital due to the UK's position on driverless technology. In July, the Government launched a consultation for driverless cars to be used on British roads, following The Modern Transport Bill being introduced in the Queen's speech.

The Bill notes that motor insurance will remain compulsory. Insurance will also be extended to product liability in respect of such vehicles, and the Government has stipulated that product liability insurance should include cover for passengers, third parties and the 'not at fault' automated vehicle driver. How this will address the position in respect of driverless vehicles used for ride sharing is likely to need further refinement as the technology develops. 

A recent study by KPMG notes that only 10% of insurers have strategic plans in place for the advent of driverless vehicles (the report can be accessed here ). Indeed the majority believe it will be another 20 years before driverless vehicles are mainstream, with safety concerns being the main impediment to consumer use.

However, given that the Government has stated that current legislation is sufficient for the insurance of testing autonomous vehicles, going forward insurers must be mindful of how existing policies may be modified in order to be able to provide suitable coverage for the developing industry.