Driverless Vehicles Make Inroads in Military - Velodyne Lidar

in the front grill. But if a trip down a gravel road breaks
those sensors, what cost $150 to $200 to install on the
assembly line might cost 10 times that to replace.
“The insurance industry is essentially in the business of
restoring something from an unintended loss. While
auto manufacturers are certainly mindful of repairability,
a simple design choice that is appealing to the marketing
people or the design folks may also hold an unintended
consequence of increasing the vehicle’s premium despite
a near-zero collision record,” Fraker says.
The large insurance companies are also cautious, especially
when it comes to autonomous technology, a real
revolution in the automotive world. The companies are
used to having tens of millions of vehicle miles traveled
as a data set.
For instance, crash test data is easy to get: ram two cars
together and see what happens. Driverless car technology,
however, is meant to avoid such outcomes but it’s
difficult to measure their effectiveness.
“That’s a real issue,” Fraker says. “Insurance is really good
at measuring what happens. The industry is not built on
measuring what doesn’t happen.”
The Solutions
Faced with these problems, Fraker sees a couple of possible
solutions. One, the technology will likely be embraced
by smaller, more nimble insurance companies
that can innovate faster than the industry titans.
They’ll use an Internet-based claims model and be more
willing to take chances.
“That’s the kind of company that can use self-driving
vehicles as their breakout technology,” Fraker says.
“If you have a small specialty line insurer that can move
under the radar because their business isn’t that big to
begin with, if you want to innovate and go to market,
the upside with them is pace,” he says. “If you want
one of the big brand names to endorse your technology,
you’re going to grow old.”
One change that could help bring even the large companies
along would be to replace the 51-state and district
insurance regulatory model with a single federal-level
entity, maybe aimed just at setting insurance rates for
driverless cars.
Insurance companies “could save all the operational expenses
to file and file and correct, by just dealing with one
entity,” he says. While the federal government is often criticized
over questions of pace by some, “This is one where
I believe tremendous potential gains could be achieved.”
Fraker says.
Auto companies also could pool their test data, something
they have been very reluctant to do. But doing so
could generate the millions of miles of data the insurance
industry would like to see.
“If we took, hypothetically, all the manufacturers and
all the cars they have on the road, and add Google, we
probably have 1 to 2 million miles of test data,” Fraker
says. “But who’s aggregating it, and where is that being
used”
Even if all that is done, one big challenge still remains
— pricing the insurance to reflect the quality of the
technology. Currently, rates change depending on the
experience of the driver. A newly minted teenage driver
pays much more than a 45-year-old driver, for instance.
“Here’s what’s interesting: Will the insurance premiums
reflect an inexperienced operator when the car is
doing the driving If that is the case, then there is a
profound consumer message being sent about unreliability,”
Fraker says.
Liability lawsuits in the United States also pose a problem,
he says.
“No other society in the world has litigation with the
lottery mentality as it is here,” Fraker says. “If we’re not
careful, we are only going to slow it down right here at
home. This could literally cost the U.S. a technological
leadership position. It’s happened before. And that
would be a tragedy.”
Despite these hurdles, he sees autonomous driving become
a reality, if for no other reason than the alwayswired
millennial generation wants to stay connected
even when in a vehicle.
“Driving is a distraction for them. If they can’t stay connected,
they are not going to buy a car.”
It also means freedom of mobility for the elderly and disabled
and other populations, something that hit home
for Fraker personally when his son, who is on the autism
spectrum and unable to drive, showed him a Web report
on driverless technology a few years ago.
“He saw the first videos that The New York Times broke
about self-driving cars” and asked his father what he
thought. Fraker instead asked his son what he thought
about it. “He said, ‘it means I get to own a car someday.’
That hit me. It has driven me since.”
28 MISSION CRITICAL • May 2013