CONTINUED FROM PAGE 34
First, ridesharing is not and cannot be linear because peak
demand for rides will always frustrate peak supply.
the autonomous vehicle ridesharing model is at heart, a more
convenient, customized mass transit model, not a competitor
to private vehicle ownership.
While this model will certainly
have appeal to some, even if it were to become more cost-
effective on a per-mile basis, the overwhelming majority of
consumers will not wish to sacrifice flexibility and convenience
for shared autonomous mobility.
For the Commission, issues of privacy, consumer protection,
and potential deception should be the focus in the context of
ridesharing. Many ridesharing companies today rely heavily
on the ability to gather, compile, and leverage very sensi-
tive personal information about their customers (including
information about those customers when they are
the ridesharing service). Indeed, many ridesharing companies
are generally considered to be more “data” companies than
Reasonable limitations, consumer
consent, and consumer protectionwith respect to this incredibly
sensitive information is critical. In addition, many ridesharing
business models rely on so-called “dynamic” pricing models
that are difficult to predict, adequately disclose, or rely on as a
consumer.While there is nothing inherently problematic with
such models, to the extent that consumers seek to rely on such
ridesharing services as their primary transportation option, the
opportunity for unfair or deceptive treatment increases greatly.
The cybersecurity and privacy issues presented by autono-
mous vehicles and ridesharing are of paramount impor-
Overall, we would urge the Commission to continue to
focus its efforts on the truly crucial issues that underpin all of
these promising new technologies: cybersecurity and privacy.
With other regulators (including NHTSA, the Department
of Homeland Security, and DOT) focused on the technical
aspects of cybersecurity, the Commission should continue
to work with manufacturers, suppliers, software companies,
and dealers to protect consumers by ensuring that privacy
and security are at the forefront of all they do.
related systems need to be designed with privacy and security
first, and executed with security as the top priority. We would
also urge the Commission to work with other regulators at
the federal and state level to establish clear rules regarding li-
ability and consumer protection now, before they are needed.
A security problemor a loss of faith in the vital privacy protec-
tions in a connected, autonomous vehicle would present both
an existential threat to a manufacturer and an impediment to
consumer acceptance of these new technologies. Moreover,
the cybersecurity bar must be a high one. These issues must
be addressed now, and consumers must have reason to trust
they are adopted.
The dealership franchise model has a positive effect on
Finally, we take issuewith the suggestionsmade
by some of the speakers during panel four at the Workshop
that the state laws restricting vertical integration in the auto-
motive retail distribution system somehow stifle the ability to
“innovate.” In particular, Professor Scott Morton’s suggestion
that the state franchise laws are akin to a state law “outlawing
internet movie downloads and requiring consumers to visit a
video shop and rent a video if they want to watch a movie,”
TR. IV; 14, is the flimsiest of straw men. Any consumer in
this country can go online and purchase a new car from a
dealer today. No state franchise law limits or restricts any
ridesharing businessmodel or autonomous driving technology.
As outlined above, these laws simply regulate the ownership
structure of the retail outlet and the relationship of that outlet
to the manufacturer.
So what are the specific innovations that the franchise model
allegedly stifles? According to Professor Scott Morton, they
are: (a) “remote updates of software”; (b) “just in time manu-
facturing”; and (c) alternate means for consumers to “to test
A lot of people will want cars during rush hour; very few will want them in the dead of night.
Indeed, the policy questions with ridesharing will likely center not on how it will compete with private ownership, but on how it will compete with public transportation
(and whether large-scale public transportation projects should continue to be funded).
The same can be said for non-manufacturing, “data” companies who
seek to become auto manufacturers. Why would such a company wish to manufacture a car? Presumably because of the value of capturing and controlling the sensitive data
emanating from, and related to, that car. The privacy issues arising from such a business model are immense and should also be an area of increased focus by the Commission.
See Keynote Remarks of Commissioner Terrell McSweeny at the Connected Cars USA Conference 2016 where she stated that “the Federal Trade Commission’s role in
all of this [is] . . . to include protecting consumer privacy – and, ultimately, their data security.” She went on to state that “[s]ince becoming an FTC Commissioner, I have
become a frequent visitor to the various hacker conferences where car hacking has been prominently featured. Some have dismissed these exploits as stunts. But I think it
would be wiser to treat these revelations as an important wake-up call to the auto industry.” Seehttps://www.ftc.gov/system/files/documents/public_statements/913813/
mcsweeny_-_connected_cars_usa_2016_2- 4-16.pdf at 2-3.
While “connected” vehicles were not discussed in any detail on the panel, we believe that the privacy and security issues with connected vehicles will require concerted
regulatory and technological efforts over the coming years, and should also be at the center of the Commission’s efforts.
CONTINUED ON PAGE 39