Automated Vehicles Act: spotlight on operator licensing 

June, 2024 - Shoosmiths LLP

The Automated Vehicles Act (the Act) creates a licensing and permitting scheme for operators that intend to use automated vehicles to offer transportation services for passengers and goods. In this article Ben Gardner outlines what potential operators need to consider.

The Act has now received Royal Assent and, at this stage, creates a framework under which further regulations will need to be developed by the Centre for Connected and Autonomous Vehicles (CCAV) to provide the detailed rules and requirements that are needed to enable widespread deployment. It is based on recommendations following the Law Commission’s extensive three-year review into UK driving laws, responses to multiple industry consultations, and guidance from the CCAV and other stakeholders.

Creating a transport revolution 

The Act is a transformative piece of legislation that will enable organisations to operate innovative transportation services that do not require a human driver (including robo-taxis and autonomous pods, shuttles, and buses).

Services of this kind are not currently permitted under existing road traffic laws, but the Act creates licensing and permitting schemes that would enable organisations to operate transportation services that have no-user-in-charge (NUiC).

To ensure safety, reliability, and public trust, a robust regulatory framework is needed that sets out the minimum expectations of organisations that are providing these services.  The Act lays the foundations for these regulations to be created which could create a transport revolution within the UK.

What you need to know

  • Licensing and permitting scheme: The Act provides for the creation of a licensing scheme to permit and regulate operators of NUiC journeys and the vehicles that undertake them.
  • Set requirements for operators: Organisations operating NUiC journeys will be subject to specific financial and operational requirements to ensure they are suitable for the role.
  • Data disclosure and in-use regulation: To support safety, the Act sets out a scheme for in-use monitoring and data sharing, with robust investigatory powers and sanctions in the event of non-compliance.

What the Act says

If you are a potential operator of vehicles that are making NUiC journeys, understanding the new requirements and offences introduced by the Act, particularly the introduction of new licensing and permitting schemes, is crucial. Here’s what you need to know:

1. Creation of a new licensing scheme

The Act provides for the future creation of a comprehensive operator licensing scheme. This scheme is designed to ensure that only those organisations that meet stringent safety and compliance standards are allowed to operate NUiC journeys on public roads.

Exact details of the new licensing scheme will be contained in regulations which are to be developed by CCAV.  The regulations will cover the granting, renewal, suspension, or withdrawal of licences – as well as fees payable by operators.

Where NUiC journeys involve the transportation of passengers, a separate permitting scheme will also be established and the interaction of these services with existing taxi, private hire, and bus legislation will need to be clarified.

2. Operator requirements

To become a licensed operator, organisations must fulfil certain criteria that demonstrate their capability to manage NUiC journeys safely. This includes the organisation having the required technical expertise, safety protocols, and financial stability.

The exact requirements are yet to be detailed, but operators can expect a robust assessment process. The Act currently expects operators to be:

  • of good repute
  • of good financial standing
  • capable of completely discharging any requirements imposed on it for the purposes of responding to problems arising during a NUiC journey.

The Law Commission’s recommendation that a NUiC operator should conduct its operations at an operating centre within Great Britain in order to make inspection and enforcement less challenging. It is likely this requirement could be reflected in the regulations which will follow the Act.

3. Data disclosure and in-use regulation

Organisations applying for NUiC operator licences and permits will need show how safety will be assured. In addition, they will need to comply with the established standards on an on-going basis which will include demonstrating how vehicles will be overseen, how incidents will be managed, how cybersecurity will be maintained, how data will be collected and shared, and how remote driving will be deployed safely.

The licensing and permitting regulations will also specify the data that should be collected by organisations, and which may need to be shared with regulators as part of in-use monitoring or in the event of an incident.  There will be a careful balancing act required to ensure a degree of transparency that promotes safety and allocates liability, but also safeguards the intellectual property and trade secrets of operators.  The various consultations CCAV will need to run to develop the regulations will give interested stakeholders (including potential operators and public interest groups) the ability to make their concerns known.

If operators fail to comply with the licensing and permitting standards, penalties can range from investigations that involve inspection and seizure of property, through to suspension of operations, civil sanctions and monetary penalties.

Key takeaways:

  • Organisations that want to operate NUiC journeys on UK roads and in public places must have a licence. Where those journeys involve the transportation of passengers, a separate permit will also be required.
  • In order to obtain the necessary licences and permits, organisations will need to meet a number of minimum requirements, comply with the licensing and permitting scheme, and pay the required fees.
  • Operators will be required to share data and there will be sanctions for failing to comply.  Forthcoming consultations will provide an opportunity to demonstrate what data sets should be shared, in what circumstances, and to whom.
  • Successful operators will need to invest in technology, training, and processes that align with the anticipated regulatory environment to ensure that the required licences and permits are obtained and maintained.

More information

Our legal experts have been engaged throughout the inception, development and introduction of the Act. This series of articles explore how it will impact organisations offering goods and services in this space.

We produce a bi-annual legislation tracker, Accelerate, that helps our clients stay ahead of the legal changes affecting the automotive sector. You can subscribe here.


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