This doesn't seem reasonable - Waymo's report doesn't dive in depth enough about each disengagement to warrant this sort of extreme reliability.
If "2 disengagements" per year, were at most fenderbenders - something I'd wager humans do way more than twice per year - that would be a very different story than if those 2 disengagements were life threatening. Sure you'd wake up from your nap, but you wouldn't be dead, and at most you'd have to exchange insurance information.
So, you're right, there's no clear distinction, but I would further argue that it doesn't matter. Even if only 1/1000 disengagements are fatal, my conclusion remains the same. I think we're splitting hairs at this point, though.
Even if not fatal, I highly doubt a significant fraction of such events (as defined above) would allow me take a nap upon departure and wake up at my destination, so it would still be unacceptable to me. I guess we have to agree on what an acceptable end-game is for fully autonomous vehicles. If you think "waking up on the shoulder exchanging insurance" is acceptable, then that would indeed change the numbers (but by how much? Two, maybe four orders of magnitude?).
Humans get into fender-benders all the time, but surely we'd strive to eradicate this inefficiency in the automated driver. I think this is still an active area of debate; some assembly-line work can be made more efficient with machines, but we've seen humans out-perform machines in other types of work. I think driving tends to utilize more reactive, intuitive "System 1" thinking[0], so I imagine that humans will be vastly better than machines at driving for a very long time.
And no, it's not acceptable by any stretch. A disengage is extremely dangerous to drivers who are lulled into false sense of security through the marketing of.. self-driving cars.
I'd like to know what the actual rate would be, the 5k miles figure is for conservative thresholds of when control should be handed over, and many problems may be safely solvable (if annoying) by simply coming to a halt or pulling over.
No, the current setup is not OK to release on a large scale, but it's not expected to be, and we're not 12 orders of magnitude from a reasonable point.
Put differently, I should be able to lay down for a nap in the back seat and wake up at my destination without any chance for disengagement during my entire lifetime. At the current rate of 1 mishap per 5,500miles, I would be dead after about 6 months.
Assuming a human lives to 75 years (we should really be using 75years minus 16years, but it's unimportant), a lifetime of driving is about 1,000mi/mo x 12mo/yr x 75yr = 900,000 miles. I don't even want the probability of encountering a mishap to be once per lifetime, let alone once per 6 months. One mishap per 900,000 miles isn't enough, because, on average, I'd encounter one disengagement in my lifetime. Assuming we're striving for a world where 7 billion people can drive without a single incident in 75 years (a vast underestimate), we need the probability of a mishap to occur to be less than once per 7,000,000,000humans x 900,000mi/human = 63 x 10^14 miles.
1/5e3 is not even close to 1/6e15. We're talking about 12 orders of magnitude in our error rate. I'd say we're laughably far away from our goal. We've got a long way to go.
[0] https://www.dmv.ca.gov/portal/wcm/connect/42aff875-7ab1-4115...
[1] https://www.fool.com/investing/general/2015/01/25/the-averag...