Waymo's Traffic Light Failure is a Regulatory Failure

San Francisco had a power outage, sending some locations in the city into blackouts, including the traffic lights. Waymo self driving cars apparently need those traffic lights to function. But instead of failing gracefully, they just stopped, clogging intersections and causing traffic jams. Waymo, to their credit, is halting service until they figure out a way to fail gracefully and not, say, block ambulances. But, honestly, why was this allowed at all?

Someone at Waymo must have known that this was going to be an issue, and decided that it was an issue they could live with to get their service on the street. That was obviously a poor choice, but Waymo was allowed to make that choice. Traffic light failures are rare, yes, but not unheard of. Someone should have asked how Waymo would ensure that their cards would not block emergency vehicles in the event of encountering a failed traffic light. Waymo had to earn a permit and apparently no one in the permitting process thought to ask, or was allowed to ask, about this fairly critical and fairly common situation. And as a result, we had a situation that literally put lives at risk.

We defer far, far too much to the idea that regulations are bad. Regulations are not bad. They are necessary, as this example shows. They do not slow innovation, they ensure that innovation is actually innovation. Self-driving cars are not innovation if they are just innovating ways to keep emergency vehicles from the emergencies. I do not think that the people in Waymo are indifferent to the common good. They did, after all, pull their service when this problem became evident. But they are incentivized to have these on the road as fast as possible, which discourages self-criticism and taking their time. Even the best firms, run by the best people, can be blind to their own incentives and biases. That is why we need regulations — to ensure that the public good has a seat at the table.

Proper regulation would have made certain that Waymo did not have this potentially dangerous failure state. Opposing regulation is not step toward innovation. It is almost always a step toward harm. Regulations make innovation possible. By ensuring that firms are required to think before they act, they ensure that firms are actually acting well, actually bringing innovation rather than just imposing costs on the larger public for their own good. You cannot have innovation without regulation. Without regulation you get some degree of public cost for private gain, the least innovative thing possible. We need to stop pretending that magic of the market will make everything all right. That way lies frozen self-driving cars and ambulances trapped behind them.