Marjorie Harris Loeb, Partner, Mayer Brown LLP
Personally, what is the most interesting aspect in the convergence of the tech and automobile sectors?
The integration of technology into vehicles is not new to the automobile industry. Vehicle manufacturers have already integrated advanced sensor technologies into many vehicles to provide intermittent driver assistance and increased control, such as automatic braking, lane departure warnings, blind-spot detection and adaptive cruise control. However, deployment of fully autonomous vehicles on public roads will require a combination of increasingly advanced sensor technologies with vehicle-to-vehicles infrastructure and vehicle-to-vehicle connectivity, fully bringing automobiles into the “Internet of Things.” Success will require vehicle manufacturers and technology providers to form alliances that build on each other’s core strengths. Manufacturer’s ability to document and perform detailed design specifications and test protocols to comply with increasingly complex regulatory standards must match up with technology companies’ ability to continuously improve and quickly adapt to changing needs and customer tastes. As a lawyer accustomed to working on complex technology transactions, I enjoy working across multiple disciplines to build relationships that make sense for both sides, whether that is a license agreement of existing technologies, application development agreements to further adapt and refine existing applications to work in an automotive environment, strategic alliances to build more bespoke systems or develop new applications, or an acquisition of development capabilities. Regardless of the structure of the relationship, the parties must balance the need for interoperability to develop an end-to-end system able to provide the desired consumer experience, while at the same time protecting against growing safety and cyber threats. The challenges are real, but the opportunity to make significant strides toward safer and more widely available forms of transportation are compelling reasons to engage.
What are the challenges facing the autonomous vehicle industry?
The biggest challenge is consumer acceptance and trust in the technology so that a rational market can be created that aligns the value of these technologies to users with the significant investment being made to create and maintain them. Cybersecurity is one key aspect to earning that trust, which is discussed below, the other of course is safety and what I refer to as not only rebutting but rejecting the paradigm of the “autonomous vehicle paradox.” The paradox is typically presented as, “what if a vehicle has to navigate between two bad alternatives – e.g. hitting a group of pedestrians or driving off a bridge and endangering the life of its occupants, which should it be programmed to choose, and if the latter because it somehow weighs the relative harm or chance of survival, who would buy a car that makes choices against its occupants?” There is of course no good choice, that is the way the paradox is set up. However, one can also imagine a similar situation but with a human driver behind the wheel. The real question is why do we trust a human to make a better decision than a machine in this circumstance? What value do we place in the technology in terms of for example, the quality of its “eyes”, its “reaction time”, its ability to make more “predictable” choices all of which may in more cases than with human drivers either avoid getting into the paradox in the first place, or mitigating the resultant impact of either “bad” choice and choosing the one where it can best mitigate the consequences? The challenge for the industry and for the regulators that want this technology to evolve because of its potential benefits to counter driver error and distraction — it is to prove the negative – the accidents that did not happen due to driver assistance technology. Only then will consumers focus on the value of the technology and recognize the paradox as an outlier.
How will cybersecurity play into the autonomous vehicle industry in the coming years?
As stated above, I think addressing concerns regarding potential hacks is critical to earning consumer trust in autonomous vehicles and it needs to be managed as a core safety issue. The challenge is that like all devices that are part of the internet of things, the threat of vulnerabilities can never be truly eliminated, rather manufacturers and their technology providers need to stay ahead of the potential threats and also demonstrate their capability to quickly detect and respond to an intrusion. This will require an ongoing relationship of development and adaptation between manufacturers and their technology providers.
What are the next steps in the development of federal and state regulations in the self-driving industry?
At some point, sooner rather than later I hope, state and federal regulatory efforts need to converge. The industry and consumers need a consistent and comprehensive framework that defines minimum standards around testing and classification of technologies so that the industry can demonstrate and consumers can begin to trust the technologies in these vehicles.
How did you initially get involved in this industry and what do you love about it?
My initial involvement was wholly by chance and precipitated by a relocation to the Detroit area, having previously worked in Boston doing primarily private equity and venture capital transactions as well as some IPOs and public M&A. Wanting to continue that type of work, I realized quickly I had better opportunities in Michigan by becoming part of the auto industry. From my first in-house job as a commercial transactions and securities lawyer at a tier 1 supplier, I never looked back. I love the automotive industry precisely because of its challenges – I know of no other industry that has the highest levels of complexity in every phase in the production cycle – where huge upfront capital investments are required, where you design and develop products on increasingly shorter cycles but still three to five years ahead of production and yet plan for the incorporation of the same software and technology that is practically considered disposable when used in other industries, where the product for the consumer is still one of his most significant investments and must retain value, where getting it wrong can have tragic consequences and even if you get it right, you must be prepared for the unexpected actions by users and in the environment in which it is used – in short change and evolution is the only constant.