Why Uber moved its fleet from California to Arizona

States are the laboratories of democracy. One state can choose to heavily regulate an emerging industry, while another state is free to take a permissive approach to the technology.

{mosads}The laboratory concept is on full display between California and Arizona. Uber, the transportation disruption company, recently announced it would launch autonomous vehicle services in San Francisco to compliment its Pittsburgh, Pennsylvania fleet. Instead of welcoming the announcement with open arms, the State of California ordered Uber to cease autonomous operations until such time as Uber could comply with California’s regulatory scheme.


Uber decided California opposed the introduction of new transportation technologies, promptly moving its entire San Francisco autonomous fleet to Arizona. Gov. Doug Ducey welcomed Uber’s announcement. “While California puts the brakes on innovation and change with more bureaucracy and more regulation, Arizona is paving the way for new technology and new businesses,” Ducey said.

California heavily regulates emerging, autonomous vehicle technologies, while Arizona takes a much more permissive approach. California wants developers to ask permission first, while Arizona has exhibited a desire to learn what challenges emerging technologies will actually face.

California’s autonomous vehicle regulations number some 35 pages. The regulations govern everything from insurance, to driver and driver testing requirements, to the vehicles themselves. The regulations prohibit the testing of autonomous technologies on public roads, unless the innovator meets certain other requirements. Once an innovator satisfies those requirements, California limits the number of autonomous vehicles to ten per innovator. This is not ten on the road at a time, but ten total autonomous vehicles.

If these requirements are not enough, California requires innovators to report any accident, whether the vehicle was in autonomous mode or not, within ten days of the accident. Even worse, California requires innovators to report any time a driver disengages a vehicle’s autonomous mode. The innovator must include in the disengagement report, “the location: interstate, freeway, highway, rural road, street, or parking facility” along with the “facts causing the disengagement including: weather conditions, road surfaces, construction, emergencies, accidents or collisions, or whether the disengagement was the result of a planned test.”

Some experts estimate that adoption of autonomous vehicle technologies could save half a million lives per year and reduce the number of fatal accidents by 90 percent. Yet, California seems to have taken the position that the public must be protected from life-saving and safety-enhancing technological advancements.

On the other hand, Arizona has an extremely permissive approach to autonomous vehicle technologies. In 2015, Ducey signed an executive order establishing a “Self-Driving Vehicle Oversight Committee.” In contrast to California’s 35 pages of regulations, Ducey’s order is two pages. The order directs the state department of transportation to “undertake any necessary steps to support the testing and operation of self-driving vehicles on public roads in Arizona.”

Also in contrast to California’s regulation, the executive order sets forth only four rules for innovators to follow: autonomous vehicles may be operated only by an employee of the innovator or other appropriate designee; the vehicles must be monitored and the operator must have the ability to take over operation of the vehicle if necessary; the operator must have a driver’s license; and the innovator must have the proper insurance.

Technologies, such as autonomous vehicles, have much in the way of safety to offer the public. It makes no sense why California has a regulatory scheme designed to keep the technology off the road. While California’s approach makes no sense, states like California are free to regulate emerging industries. They must be aware, though, innovators are likely to avoid testing products in states with heavy-handed regulatory approaches. States like Arizona and Pennsylvania, instead of California, will be among the first to adopt life saving and safety enhancing advancements.

Jonathon Hauenschild, J.D., is a technology policy analyst. He is the founder and principal of Franklin Adams & Co., LLC.

The views expressed by Contributors are their own and are not the views of The Hill.

Tags Arizona California Jonathon Hauenschild Technology Uber

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