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It was January 2015 and the Phoenix area was about to host the Super Bowl. Mr. Ducey learned that a local regulator was planning a sting on Lyft and Uber drivers to shut down the ride-hailing services for operating illegally. Mr. Ducey, a Republican who was the former chief executive of the ice cream chain Cold Stone Creamery, was furious.<\/span><\/p>\n \u201cIt was the exact opposite message we should have been sending,\u201d Mr. Ducey said in an interview. \u201cWe needed our message to Uber, Lyft and other entrepreneurs in Silicon Valley to be that Arizona was open to new ideas.\u201d If the state had a slogan, he added, it would include the words \u201copen for business.\u201d<\/span><\/p>\n Mr. Ducey fired the regulator who hatched the idea of going after ride-hailing drivers and shut down the entire agency, the Department of Weights and Measures. By April 2015,\u00a0Arizona had legalized<\/a>\u00a0ride-sharing.<\/span><\/p>\n Arizona has since built upon the governor\u2019s action to become a favored partner for the tech industry, turning itself into a live laboratory for self-driving vehicles. Over the past two years, Arizona deliberately cultivated a rules-free environment for driverless cars, unlike dozens of other states that have enacted autonomous vehicle regulations over safety, taxes and insurance.<\/span><\/p>\n<\/div>\n<\/div>\n Arizona took its anything-goes approach while federal regulators delayed formulating an overarching set of self-driving car standards, leaving a gap for states. The federal government is only now\u00a0poised to create its first law<\/a>\u00a0for autonomous vehicles; the law, which echoes Arizona\u2019s stance, would let hundreds of thousands of them be deployed within a few years and would restrict states from putting up hurdles for the industry.<\/span><\/p>\n \u201cWe are in the Wild West phase of autonomous vehicles, where companies are looking for the state with the least amount of sheriffing going on,\u201d said Henry Jasny, senior vice president at\u00a0Advocates for Highway and Auto Safety<\/a>, a nonprofit based in Washington.<\/span><\/p>\n<\/div>\n<\/div>\n The payoff for Arizona has been a tech boom, with dozens of autonomous vehicle companies flocking here to set up operations. Every day, Waymo, the driverless car business owned by Google\u2019s corporate parent Alphabet, as well as Uber, Lyft, General Motors and Intel now deploy hundreds of cars that drive themselves on the streets of Phoenix, a sprawling metropolis of 1.4 million people.<\/span><\/p>\n Some companies have pushed boundaries by conducting first-of-its-kind experiments in the state. Waymo\u00a0announced this past week that<\/a>\u00a0it had begun testing self-driving cars in the Phoenix suburb of Chandler without an employee at the wheel to take over in an emergency. Until then, all driverless car trials had a human driver in the front seat, just in case. Uber said it was also exploring similar tests, with employees moving to the back seat.<\/span><\/p>\n But Arizona\u2019s permissiveness has drawn criticism from safety advocates who said the companies have too much freedom to conduct their trials on public roads. They said car companies and state officials have not solved questions about the privacy of passengers, the prevention of cyber attacks on autonomous cars, and how to insure vehicles that don\u2019t have a driver.<\/span><\/p>\n \u201cIt\u2019s open season on other Arizona drivers and pedestrians,\u201d said Rosemary Shahan, president of\u00a0Consumers for Auto Reliability and Safety<\/a>, a nonprofit that has pushed for stronger state and federal rules. \u201cThere is a complete and utter vacuum on safety.\u201d<\/span><\/p>\n<\/div>\n<\/div>\n Arizona officials said the public is essentially protected by basic rules that require a licensed driver somewhere in the driverless car. They added that they planned to take a back seat to the experts when it comes to rule-making. The state insurance regulator, for example, said he would wait for the insurance industry to guide regulators on liability policies for driverless cars, amid questions about who is responsible in a crash if the car isn\u2019t driven by a human.<\/span><\/p>\n \u201cWe shouldn\u2019t be getting in the way by prescribing regulations when we really don\u2019t know how the equipment will perform,\u201d said John Halikowski, director of the Arizona Department of Transportation.<\/span><\/p>\n The state\u2019s hands-off approach has already been tested. In March, Arizona experienced its first crash involving a driverless car, when a human-driven vehicle collided with a self-driving Uber in the Phoenix suburb of Tempe. The case was quickly resolved because police said Uber\u2019s car was not at fault, but some Arizona officials acknowledged they have not thought through all the legal scenarios with autonomous car accidents.<\/span><\/p>\n \u201cWe embrace innovation,\u201d said Mark Mitchell, the mayor of Tempe. \u201cBut there are some things we\u2019ll have to look at moving forward.\u201d<\/span><\/p>\n Mr. Ducey, a native of Ohio who came to Arizona for college and then stayed, was\u00a0elected\u00a0<\/a>governor in 2014<\/a>\u00a0on a pro-business and innovation platform. He quickly\u00a0lifted restrictions<\/a>\u00a0on medical testing for companies like Theranos, a Silicon Valley company that later faced scrutiny for its business practices. He also touted Apple\u2019s decision to build a $2 billion data center in the state.<\/span><\/p>\n \u201cWe can beat California in every metric; lower taxes, less regulations, cost of living, quality of life,\u201d he said several months after he became governor.<\/span><\/p>\n In early 2015, Mr. Ducey\u2019s shutdown of the sting operation that would have hit Uber and Lyft had an immediate effect. Days after his decision, which the companies were made aware of by his staff, Lyft and Uber executives called the governor to thank him.<\/span><\/p>\n At the time, Uber already had a small operation in Arizona for mapping roads. Two months later, the company\u00a0announced<\/a>\u00a0it would open a center in Phoenix for customer and driver support with 300 employees.<\/span><\/p>\n By August 2015, Mr. Ducey was taking his first steps into driverless vehicles. That month, he signed an executive order supporting autonomous cars. Under that order, any driverless car could be on Arizona roads as long as a passenger had a license and the car had a basic liability insurance plan.<\/span><\/p>\n Mr. Ducey also set up a \u201cSelf-Driving Vehicle Oversight Committee\u201d comprised of transportation, public safety, insurance and other regulators to advise \u201chow best to advance the testing and operation of self-driving vehicles on public roads.\u201d The group was not intended to create any new rules.<\/span><\/p>\n And Mr. Ducey became a pitchman.<\/span><\/p>\n Under Gov. Doug Ducey, Arizona has cultivated a rules-free environment for driverless cars. \u201cWe needed our message to Uber, Lyft and other entrepreneurs in Silicon Valley to be that Arizona was open to new ideas,\u201d he said recently.<\/span>Credit<\/span>Laura Segall\/Getty Images<\/span><\/p>\n Early last year at a global economic forum on the Georgia coast, Mr. Ducey said he approached Eric Schmidt, the chairman of Alphabet, with a business card and talking points on the state\u2019s embrace of self-driving automakers. Shortly thereafter, Waymo scoped out Chandler to begin autonomous car tests.<\/span><\/p>\n Chandler\u2019s officials sealed the deal with further promises to stay out of the way. \u201cWe don\u2019t think it\u2019s our role to be engaged in regulation,\u201d said Micah Miranda, Chandler\u2019s director of economic development.<\/span><\/p>\n Waymo opened operations in Chandler in August 2016, hiring dozens of local test drivers. The company hosted a grand opening with Mr. Ducey and Chandler\u2019s mayor and held several community events to win over the public.<\/span><\/p>\n \u201cThe enthusiasm for new tech from the public and Governor Ducey makes Arizona a place where innovation can thrive and companies like ours can set up roots,\u201d said Waymo.<\/span><\/p>\n Interested in All Things Tech?<\/strong><\/span><\/p>\n The daily Bits newsletter will keep you updated on the latest from Silicon Valley and the technology industry, plus exclusive analysis from our reporters and editors.<\/span><\/p>\n<\/div>\n Mr. Ducey also traveled to Silicon Valley to visit driverless car companies and investors. In late 2016, he stopped by Andreessen Horowitz, a venture capital firm in Menlo Park, Calif., that has invested in companies including Lyft, which is working on self-driving technology. There, Mr. Ducey found an inquisitive audience about the state\u2019s regulation-free policy for self-driving cars.<\/span><\/p>\n \u201cAlthough Washington gets much of the attention, a lot of the real action on tech policy is taking place at the state and local level,\u201d said Ted Ullyot, an Andreessen Horowitz partner who attended the meeting. \u201cGovernor Ducey is a key pro-innovation leader, making Arizona a highly welcoming environment for autonomous vehicles and other emerging technologies.\u201d<\/span><\/p>\n Arizona particularly stood out against other states. In the absence of federal rules,\u00a033 states<\/a>\u00a0have created their own laws and regulations around the new technology. Many are taking a more legislation-heavy approach.<\/span><\/p>\n In California, Google, Uber, GM, and Ford have fought lawmakers on self-driving rules. One rule required carmakers to report on the number of times a driverless car switched from autonomous mode to human-driven mode, which irked automakers who said those statistics give a misleading impression of safety.<\/span><\/p>\n Last December, Uber clashed\u00a0with California regulators<\/a>\u00a0when it tested its self-driving cars in San Francisco without permission from the California Department of Motor Vehicles. The company was quickly ordered to shut down its trials.<\/span><\/p>\n Uber\u2019s executives called Mr. Ducey.<\/span><\/p>\n \u201cWe responded by saying we weren\u2019t going to hassle them,\u201d Mr. Ducey said of Uber. \u201cI\u2019d be remiss if I didn\u2019t thank my partner in growing the Arizona economy, Jerry Brown,\u201d the Democratic governor of California.<\/span><\/p>\n Days later, Uber loaded a fleet of driverless sport utility vehicles onto semi trucks\u00a0headed for Tempe<\/a>. The company now has several dozen driverless cars in a garage there that is the size of two football fields, with plans to add more cars.<\/span><\/p>\n \u201cGovernor Ducey\u2019s prioritization of the sharing economy has made the Grand Canyon State an ideal environment for our self-driving pilot,\u201d Uber said.<\/span><\/p>\n Under Mr. Ducey, driverless car experiments in Arizona have multiplied over the last year.<\/span><\/p>\n Uber\u2019s self-driving Volvo SUVs now pick up customers around Tempe on a daily basis. Waymo has dispatched more than 100 Chrysler self-driving minivans to chauffeur select families and other residents as part of a closely guarded trial; the company plans to expand to 600 vehicles by the end of the year, with the majority in Chandler. And dozens of vehicles for GM, Ford, Intel, and Lyft are also covering thousands of miles a day on the flat and sun-drenched roads around Phoenix.<\/span><\/p>\n Some residents are ambivalent. Groups representing the blind are enthusiastic supporters of driverless cars, which could give their members more independence. Others like the idea of tech-related jobs coming to the state. But some are cautious.<\/span><\/p>\n \u201cI\u2019m on the fence,\u201d said Jake Guadarrama, 22, a Phoenix-area resident. \u201cWhat if the battery died on the car and it goes out of control? And will it take away from the workforce?\u201d<\/span><\/p>\n Those questions are not just academic. Already, the incorporation of driverless cars into human-driven traffic has run into problems.<\/span><\/p>\n Around dusk on March 24, for example, Alexandra Cole, a Tempe resident, inched her 2008 Honda CRV into a busy suburban intersection in the city. With five seconds left on the pedestrian crossing signal and no cars coming toward her in the two closest lanes, she began a left turn.<\/span><\/p>\n She did not see Uber\u2019s self-driving Volvo SUV darting through the yellow light in the furthest lane toward her. The cars collided. Uber\u2019s vehicle flipped onto its side and crashed into two more cars waiting in traffic.<\/span><\/p>\n![\"\"](\"https:\/\/static01.nyt.com\/images\/2017\/11\/11\/business\/12ARIZONA-3\/12ARIZONA-3-superJumbo.jpg\")
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The Pitchman<\/strong><\/span><\/h4>\n
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Many Unknowns<\/span><\/h4>\n
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