California Overregulation Drives Uber Testing to Arizona

Published January 23, 2017

After California government regulators stopped Uber, a popular transportation network company connecting drivers and riders, from conducting real-world tests of autonomous navigation technology, the company announced plans to move its test grounds to Arizona and expand its testing operations in 2017.

The peer-to-peer economy transportation company is experimenting with self-driving cars, which use sensors and software to drive an automobile more accurately and safely than human drivers.

In December 2016, the California Department of Motor Vehicles revoked permission for Uber to test 16 self-driving cars, claiming the company had failed to conform to state government regulations on external markings for experimental vehicles.

After loading the 16 test vehicles on an autonomous truck headed for Tempe, Arizona, Uber representatives told reporters the company planned to expand its testing programs in 2017.

Government vs. Consumers

Evan Swarztrauber, a communications director for TechFreedom, a think tank focusing on digital issues, says consumers are better equipped than government to determine whether businesses’ products and services meet their needs.

“The rapid growth of the company, and some of its more local battles that it has won, you can attribute to them basically coming in guns blazing, getting as many customers as they possibly can, and making the service really popular,” Swarztrauber  said. “By the time government and regulators have a chance to do something, you’ve got an army of lobbyists called ‘happy customers.'”

Refusing to Bow to Regulators

Swarztrauber  says Uber’s migration to Arizona will benefit the company’s customers.

“This is really important, lifesaving stuff, and for us to dither and drag our feet over whether or not companies are coming to the government, pampering the bureaucracy, and kissing the ring—they left. Good,” said Swarztrauber.

Cites Progress-Friendly Environment

Jonathan Riches, national litigation director for the Goldwater Institute, says Arizona lawmakers’ efforts to become friendlier to businesses and innovation are paying off.

“In addition to the self-driving cars, there was a case two or three years ago involving efforts to characterize Uber as taxis,” Riches said. “But Gov. [Doug] Ducey said they’re not taxis. This is something very different. This is a sharing-of-information platform … More recently, in the last legislative session, we assisted with the passage of legislation that prohibited cities and towns from banning short-term vacation rentals. We were the first in the country to do that.”

Regulators Gonna Regulate

Riches says government regulators are often too eager to restrict new technologies.

“Ever since Henry Ford invented the Model T, you’ve had regulators throughout the country banning the running of horseless carriages,” Riches said. “For whatever reason, there’s this impulse among government regulators to default to ‘no,’ and I think part of it is that they just don’t know what to do with innovation. It doesn’t fit within the square regulatory box or environment that they’re used to operating in.”

Riches says government regulators are often unable to adapt to technological change.

“Because something new disturbs that traditional box that they’re used to regulating in, rather than asking what can be done to have that innovation happen safely, they default to the ‘no’ position,” said Riches. “The good news is that in the end, technology and innovation always win. The question is how much is lost and how many jobs are lost in the meantime.”