Wednesday, October 14, 2009

Lowering Barriers to Innovation in Cars

In 1890, there were 2000 car companies in and around Paris. I haven't been able to find the data for Detroit, but its a good guess to imagine that it was the same. Today, what do you think? Maybe 50 new cars being seriously tested for market consideration worldwide?

In a time when everyone is talking about the need for innovation and new vehicle types, it is basically impossible for a couple of clever guys (used in a gender-neutral way) to think up, test, sell, and improve upon their ideas. We have set the regulatory bar so high, that we've basically excluded innovation from any who doesn't have several hundred million dollars handy. The US Department of Energy recently gave Tesla Motors a $465 million loan that will be repayable only if they succeed. This is an expensive approach, for the government and for car manufacturers.

There is a lower-cost way forward, with precedents in the food industry. Here's what I think should be done.

To promote innovation In the existing vehicle stock:

1. Create an open in-vehicle technology platform/device that can be installed in existing vehicles, which brings car-specific data to the internet (with open APIs) for developers/innovators. This will facilitate changes in ownership, access, driving behavior, connectivity to other relevant data in the environment. [This idea is in hand and doesn't need government regulatory intervention.]

To promote innovation of new vehicles and new mobility choices:

2. Create a government insurance plan for small transportation businesses, to be paid into by these start-ups, that provides insurance, likely with reasonable per incident caps, that enables them to try innovative things that don't match the insurance industry status quo. Carsharing, carpooling, pick-up shuttles, PAYD insurance, innovative vehicle designs have all be held back by the insurance problem. By capping at some specific "small business" volume, innovation can be enabled and the real liability risks can be learned from these small groups. Ideas that succeed (and increase in volume beyond small business) will have the track record to move into the private sector insurance industry.

3. Remove government oversight of safety standards for low sale-volume vehicles. There is insignificant public health risk from small volume vehicle accidents. As an analogy, the health standards we apply to the corner deli are different from what we apply to Nabisco. In the vehicle space, there is only one rule that applies. And like the corner deli, locals won't frequent one that serves old or unhygenically prepared food.

4. Consider creation of low speed, low weight class of roads on which any vehicle and mode of transportation is at low risk for mortal accidents, and on which these small volume new vehicles could travel very safely. "The probability of death from an impact speed of 50 mi/h (80 km/h) is 15 times the probability of death from an impact speed of 25 mi/h (40 km/h)....only 5 percent of pedestrians died when struck by a vehicle traveling at 20 mi/h (32 km/h); however, the proportion of fatalities increased to 45 percent at 30 mi/h (48 km/h) and to 85 percent at 40 mi/h (64 km/h)." Source data.

On this last point, I'm imaging that many urban areas (and perhaps some roads or some lanes in suburban/rural areas) could have this classification. If this new classification were just by speed, allowing a diversity of vehicles could travel on those roads, we would get one kind of innovation. If we pushed the restriction further to include weight restrictions, these low speed/low weight roads would have a totally new and different characteristic that would favor pedestrians, bicycles, and small vehicles. Right now, many people tell me they don't ride their bikes (or let their kids ride) because of the weight/speed problem of other traffic.


Kai Carver said...

Interesting that innovation could come, once again, from bicycles. They were at the beginning of the automobile revolution. I think the crazy proliferation of scooters and near-car-like motorbikes in urban settings points us in one direction for innovation.

Personally, electric bicycles that would keep me warm and dry, in a Velib-like sharing configuration, are what I dream about for urban transportation. I may not be terribly representative though.

And yes, making enough roads safe for alternatives to giant hulking pieces of death metal is a great and necessary and difficult task for change to happen.

I note that in Paris cyclist fatalities seem to come primarily from trucks and buses. In some ways that makes the problem more obvious and also possibly more tractable. Cars, as bad and dangerous as they may seem from a cyclist's point of view, are not the biggest problem.

Shipyardphil said...

As a business owner in green transportation, I am very excited to see you acknowledge insurance as a problem. It is a very very very big prohibitive problem. Insurance is a problem on many fronts. Cities can't make decisions, product makers can't sell vehicles, operators of services can't make a profit, etc unless the start out as big as U-Haul and can self insure. It's ridiculous.

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