Hyperloop companies have raised hundreds of millions of dollars to develop a new, high-speed form of transportation, but regulatory frameworks haven’t yet caught up with their technology.
California-based companies such as Hyperloop One and Hyperloop Transportation Technologies are hoping to send capsules of passengers and freight through vacuum tubes at speeds exceeding 700 mph. In doing so, they would be realizing a vision set forth by Elon Musk in his 2013 white paper “Hyperloop Alpha.” But former United States Secretary of Transportation Anthony Foxx has publicly stated that new transportation technologies are dramatically outpacing regulatory agencies.
In an interview for this article, David Norton, an attorney with specific expertise in aviation law, said that any new regulatory overview must take passenger safety into account.
“I suspect that, as with aviation, the two competing policy concerns will be passenger safety on one hand, and economic development on the other,” said Norton, when asked what type of oversight is necessary or inevitable for hyperloop. He explained that regulations would also be informed by a very old and well-established legal concept known as common carriage.
“A transportation service provider generally has the highest duties of safety possible to its passengers – and I think that will largely shape the regulatory landscape,” said Norton.
According to Chris Facey, the owner of a third-party logistics company called FreightSavvy, there could even be regulatory hurdles when hyperloop companies try to transport cargo via their high-speed service.
“The current method for classifying freight is the NMFC (National Motor Freight Classification system). It is outdated, to say the least, so new methods of classification of freight might be warranted,” said Facey. “Classification pertains to cargo claims and insurance as well as how freight is priced so there are wide-ranging effects involved in re-engineering a classification system for a new mode.”
A hyperloop could force regulators in D.C. to revise existing classifications and adapt to an entirely new era in transportation. In a podcast interview with Recode Decode, Anthony Foxx explained the challenges facing the United States Department of Transportation.
“I recognize the rate of change in our space is going to be faster in the future,” he said. “For example, our regulatory work, our rule-makings can take something like four or five years on the normal course. Well, with a technology like autonomous vehicles or drones or something like that, we could be two or three generations into a technology by the time a rule comes out. And so the rule could be outdated by the time it happens.”
Foxx said that during his tenure as Secretary of Transportation, he spoke with Elon Musk about hyperloop. Musk promoted his invention as a good alternative to the high-speed rail being developed in California. In his conversation with Foxx, Musk characterized hyperloop as a way of utilizing existing right of way. By limiting the acquisition of right of way, Musk suspected that the costs of any new transportation facilities could be reduced. Other hyperloop proponents have also noted that less ground is needed to build hyperloop infrastructure because the tubes could be built above ground and placed on pillars. The tubes could also be routed underground, capitalizing on new technology from The Boring Company.
Anthony Foxx believes we’re at an inflection point with technology. Before hyperloop companies can proceed with their unique infrastructure on U.S. soil, Congress will have to lay out some ground rules. The regulatory structures for hyperloop don’t currently exist and will need to be highly customized.
“The Federal Railroad Administration’s current regulations would be like putting a square peg in a round hole, for hyperloop,” said Foxx.
For Elon Musk and the many companies developing hyperloop, complex regulations could potentially be obstructive.
“You know, it’s not fun being regulated. It can be pretty irksome,” Elon Musk said during an onstage interview at the recent NGA 2017 Summer Meeting. He said that he is opposed to over-regulation.
Musk recently tweeted that he had been engaged in promising conversations with Los Angeles Mayor Eric Garcetti regarding a tunnel network for cars, bikes, and pedestrians. “Permits harder than technology,” the tweet concluded.
In spite of these comments, Musk made it clear that regulation is still necessary for people’s well-being. He also stressed that AI technology, in particular, may require proactive instead of reactive regulation.
“Normally the way regulations are set up is that a whole bunch of bad things happen. There’s a public outcry. And then after many years, a regulatory agency is set up to regulate that industry. And there’s a bunch of opposition from companies who don’t like being told what to do by regulators. Anyway, it takes forever,” said Musk.
Elon Musk believes that AI requires an exceptional form of regulation because, in his assessment, it poses a fundamental risk to the existence of human civilization. When describing his transportation technologies, he was less adamant about the need for proactive regulation.
“In the United States, the rules are still better than anywhere else. But it’s very easy to put something in place which is an inhibitor to innovation without realizing it. So, in terms of the regulatory environment, it’s always important to bear in mind that regulations are immortal,” Musk explained to an audience of governors at NGA 2017. “So, a lot of times, regulations can be put in place for all the right reasons, but then nobody goes back and gets rid of them afterwards, when they no longer make sense.”
On July 20, following the meeting of governors, Musk cryptically tweeted: “Just received verbal govt approval for The Boring Company to build an underground NY-Phil-Balt-DC Hyperloop. NY-DC in 29 mins.”
The tweet was widely criticized on social media due to its ambiguity and unverified claims, with Eric Phillips, the press secretary for the New York City mayor, tweeting back: “This is news to City Hall.” Susana Castillo, deputy press secretary for D.C. Mayor Muriel Bowser, echoed this response, stating, “This is the first we heard of it.”
Musk then attempted to clarify: “Verbal approval was at federal level. Still a lot of work before formal, written approval, but this opens door for state & city discussions.”
If Musk’s hyperloop invention successfully connects the Northeast, it would provide ease of access to the nation’s capital and its most prominent economic hub. The novelty and potentially breakneck speeds of hyperloop have ignited the public’s imagination, but these same aspects have prompted regulatory hurdles. In addition, the feasibility of the invention has been questioned, with Amtrak’s co-CEO Richard Anderson calling it unrealistic and then explaining, “I’m probably too much of an old-school industrialist. I tend to look at things like cash flow and return on invested capital and operating margin. And I don’t always understand how those companies, you know, can have real huge losses.”
Hyperloop One CEO Rob Lloyd has noticed greater enthusiasm for hyperloop overseas. Lloyd’s company is presently conducting feasibility studies in the Netherlands, Moscow, Switzerland, and elsewhere. His major competitor, Hyperloop Transportation Technologies, is working directly with regulators and governments in Slovakia, India, Abu Dhabi, South Korea, and elsewhere. According to HTT CEO Dirk Ahlborn, construction on the South Korea project could start as early as 2018.
Lloyd has a goal to make hyperloop “three times more effective than any other transportation technology on the ground today,” but he conveyed little patience for elongated, bureaucratic processes.
“We don’t want to wait for a government to come and go through a 15- to 20-year process to say they want to do this. We’d rather build a public-private partnership,” said Lloyd, in an onstage TechCrunch interview at CES 2017.
Under Lloyd’s direction, the company is actively pursuing projects in countries with friendly regulatory environments and economically viable routes. Instead of contending with overbearing regulators, he seems intent on circumnavigating them.
“We want routes in which the regulators and governments are supportive, instead of let’s say blocking what we’re trying to achieve. And if someone is blocking what we’re trying to achieve and wants to just put the straight arm out and make it hard for us, we’re just going to go to another country, because there’s interest everywhere,” explained Lloyd. “And we don’t need to fight with a regulator. We’d rather work with a regulator to write new regulations that don’t exist because there is no book about how you regulate a hyperloop.”
Lloyd went on to mention that in spite of existing regulations in the automotive industry, lawmakers are still struggling to keep up with self-driving cars. He cited his company’s relationship with the Road and Transport Authority in Dubai as being particularly productive and exciting.
On Sept. 12, the NHTSA released a report titled “Automated Driving Systems (ADS): A Vision for Safety 2.0.” Secretary Elaine L. Chao, the current United States Secretary of Transportation, stated that her department is intent on making “regulatory processes more nimble to help match the pace of private sector innovation.” The document’s executive summary characterized its own safety proposals as “Voluntary Guidance” and as “a nonregulatory approach to automated vehicle technology safety,” which aims to provide “a flexible framework for industry to use in choosing how to address a given safety design element.” This language seemingly reflects a willingness on the part of the incumbent Republican administration to accommodate industry. The report’s voluntary guidance pleased the Alliance of Automobile Manufacturers but alarmed consumer safety advocates. Chao’s department might greet hyperloop with a similar sense of flexibility.
An unprecedented form of regulation clearly lies ahead of Musk’s nascent technology, but some government officials still view it as a worthy challenge. In his podcast interview, Foxx explained, “There’s sort of the so-called old world of transportation, and then there’s this brave new world we’re going into, where there’s a wave of technology waiting to come in and maybe make our lives easier and maybe help us be safer. But we can only capture that if we’re thinking about it beforehand.”
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