Arizona Shuts Down Uber’s Self-Driving Car Fleet

Uber - Arizona Shuts Down Uber’s Self-Driving Car Fleet

Source: Volvo

Uber’s test fleet of autonomous cars has been officially ordered off the road in Arizona. This order comes 10 days after one of its vehicles caused the first self-driving car fatality involving a pedestrian. 

The move by the Arizona government is not good news for the company, which has been trying to catch up to Alphabet Inc’s (NASDAQ:GOOGL) Waymo. Arizona was a key hub in Uber’s testing, with half its fleet of autonomous cars based in the state.

Arizona Governor Moves Against Uber

You can still hail an Uber in the state of Arizona, but you will no longer see one of the company’s self-driving cars on the road.

 After the March 18 accident killed Elaine Herzberg, Uber voluntarily pulled its autonomous test vehicles off the road. However, after footage of the self-driving car fatality involving one of Uber’s Volvo XC90 SUVs was released, questions were raised about why the vehicles sensors failed to see the woman. Furthermore, the footage clearly showed the human driver — who could potentially have grabbed the controls to avert the collision — wasn’t paying attention.

That video caught the attention of the public, and of Arizona’s Governor. According to the Associated Press, Governor Doug Ducey has ordered Uber’s autonomous test fleet off the roads in the state. In a letter to Uber’s CEO, the Ducey stated that the public safety should be the top priority for companies testing self-driving cars in Arizona and that “the incident that took place on March 18 is an unquestionable failure to comply with this expectation.”

Not a First for Uber’s Self-Driving Cars

The move doesn’t prevent Uber from resuming testing of its autonomous cars in other cities. But with half of its fleet and hundreds of staff based in Arizona this is a serious blow.

And this isn’t the first time Uber’s autonomous fleet has left a state. Arizona became the hub of the company’s efforts after California shut it down in 2016.

At the time of the California action, Arizona’s Governor put out a press release that seems a little ironic at this point:

“Arizona welcomes Uber self-driving cars with open arms and wide open roads. 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. In 2015, I signed an executive order supporting the testing and operation of self-driving cars in Arizona with an emphasis on innovation, economic growth, and most importantly, public safety. This is about economic development, but it’s also about changing the way we live and work. Arizona is proud to be open for business. California may not want you, but we do.”

The Arizona Governor’s turnaround in position is likely to make other states think twice about welcoming the company.

Good News for Waymo?

Overall, the first self-driving car fatality involving a pedestrian is far from good news for the autonomous vehicle industry. Everyone is going to be under tougher scrutiny.

Who is at fault: the auto maker, sensor maker, software developer, driver, or the company that operates the autonomous car? These questions about liability had been theoretical until now. But after March 18 the questions need real answers — answers with likely repercussions for the industry.

That being said, any setback for Uber is a win for Waymo in the race to develop a self-driving car. So far, the battle between the two has been fierce, including courtroom drama over stolen trade secrets. Uber is burning cash and its reputation for scandal makes it tougher to be forgiven for any accidents. Calls are already mounting for the company to sell off its self-driving car efforts to another company — possibly to an existing auto maker.

The Arizona self-driving car fatality and resulting banishment of Uber’s test fleet could mark a crossroad for the company’s decision to hitch its future to being first to market with an autonomous car. Clearly that effort is going to be more costly and more difficult than expected. The question is, will Uber continue, or sell off its autonomous technology in the hope of partnering with a big auto maker?

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2018/03/arizona-shuts-ubers-self-driving-car-fleet/.

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