I wouldn't be surprised if Tesla (and other autonomous driving providers) directly offer customers their own insurance and liability coverage. The auto insurance companies of the world see the writing on the wall, yet have no data to accurately model or price such a product. It might be a good thing too, since it providers a second layer of incentive to improve the underlying autonomy technology.

I keep hearing, and used to assume, this. But observe public reaction to e.g. the Tesla autopilot accident: measured and muted.

Counterbalancing negative reactions to machines are generational shifts in our perception of technology. I haven't seen a study on this, but from memory, what was the last new (or, for franchises, first-in-franchise) film that portrayed a man-vs-machine war? The closer we get to a population of people mostly born after the mid-1980s, the better the reaction appears to likely be.

There's quite a few recent rogue AI movies, but they typically have a few characters stopping the machine rather than a war. Avengers 2, I Robot, Eagle Eye.

Autonomous cars will be much better at handling these types of situations - in your example, the machine will know what's going on few milliseconds after it happens and will be able to adjust speed and direction almost instantaneously. All you need is lots of sensors.

What will make autonomous cars better is that they can take all of the input from thousands of blowouts, add "training" from actual experts, and load the resulting techniques into every car on the road, ready for execution the instant something happens.

There are two things where human beings far outpace AI in competence. The first is the ability to recognize when inputs just simply don't make sense and thus the intended algorithm is going to return garbage results. A related, but important issue (particularly if you talk about networking cars together) is being able to recognize malicious inputs.

The second issue is that humans are good at higher-order planning. An example as it relates to driving is what we do when we can't tell the state of the traffic light (direct sunlight, say). Humans naturally look for ways to indirectly infer the state: the status of the traffic light in the cross direction, the current disposition of cars around the intersection.

Autonomous cars will only be better at handling these situations if the engineers are aware that these situations need to be handled and take measures to make the cars aware of them. And history suggests that is sufficiently unlikely to happen to make me fearful of the future.

And yes, we can deduct light color from other clues, but we can also go through a red light because we were preoccupied with our cellphones. AV will on the other hand have access to multiple cameras, looking at the light from multiple angles, possibly with some polarizing filters that will make this non-issue.

Which rapidly reduces the MTBF at which point you're stuck with an overpriced manual drive vehicle.

I do think it will figured out in some future where there's true autonomy and they're proven far safer statistically. But you're right that the general public isn't going to shrug when $AUTOMAKER's car runs over a skateboarder and the company says "We are committed to safety and we'll try harder next time."

There's also the uncanny valley when no one's paying attention although they're legally supposed to be.

Unfortunately many examples from recent years (acceleration pedals, air bags, tires) show that after few weeks everybody will forget about the issue and move on.

Of course. If somebody is a much-better-than-average driver, then suddenly their probability of getting killed is going to be equalized with the rest of the population and may become higher as a result.