Home > New Technologies, Regulation > Toyota Recall: Are the Feds Due for Business Model Changes?

Toyota Recall: Are the Feds Due for Business Model Changes?

A thought occurred to me while listening to Rep. Henry Waxman during the recent congressional hearings on Toyota’s recalls – is the federal government due for some business-model change?

I’m referring to the Department of Transportation (DOT) and the National Highway Transportation Safety Board (NHTSB) in particular here, and the revelations this week that a potential cause of the sudden acceleration in certain Toyota models was due to defects in the car’s electronics system – and not from sticky brake pedals.  Waxman was laser focused on the issue, reminding me that we often drive our biggest and most expensive computer – our cars.

In fact, most newer cars feature sophisticated electronics systems that control most of the vehicle’s functions.  In Toyota’s vehicles, the technology is known as ETCS-i (Electronic Throttle Control System with intelligence).  ETCS-i replaces the mechanical link between the accelerator and the engine throttle with an electronics system; when the accelerator pedal is pressed, electronic signals are sent to the car’s electronics system which in turn regulates the engine throttle to allow gas or fuel to enter the engine (for more, check out this paper by Professor Raj Rajkumar of Carnegie Mellon University).

Toyota US President James Lentz insisted that the cause of the sudden acceleration problem was mechanical, not electric.  But the questions persist. The latest vocal voice on the topic is Apple co-founder Steve Wozniak, owner of “many models of Prius” that have been recalled.  He has pinpointed the problem to the software used in the recalled Toyota cars.

Transportation Secretary Ray LaHood was visibly defensive about his agency’s response to what has become one of the biggest recalls in automobile history and DOT has started looking into the electronics systems as a possible cause of the problem with recalled Toyota cars.  But some suggest that this is a matter of whether the DOT and NHTSB have the necessary resources to pinpoint problems of this type.  Certainly this is the view of the Joan Claybrook, a former NHTSB administrator, who insists that 18 investigators in the NHTSB’s Office of Defect Investigation are simply not enough to handle the over 30,000 defect complaints that the agency receives all year.

But a bigger question persists. Indeed, technological innovation is forcing a dramatic business model change in so many other industries – consider what is happening in healthcare or the newspaper industry for instance.  The US government however, continues to view technology as a separate “vertical.” This is best illustrated by how we approach privacy, with different statutes covering the use of information for health, financial or credit reporting purposes in the absence of a national privacy law.

With technology providing a renewed foundation for so many traditional industries, should the feds establish and fund an office of technology, dedicating to regulating the implementation of technology in important products, particularly those that could impact the health and safety of consumers?  Such an agency would work with industry-specific agencies – like DOT and NHTSB – to address defect complaints, while also having a unique perspective on how technological innovation is impacting our economy.  This agency could also house our efforts to define privacy in the electronic age, address cybercrime and set out minimum requirements for handling sensitive data (assuming of course, that we can get national laws passed in each of these key areas).

In this way, our regulatory system would more closely mimic the massive shift that technology is forcing in our industries today.  Business model change shouldn’t just be reserved for private industry.  As this latest recall shows us, the federal government could benefit from a little business model change too.

  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: