The Role of State DOTs Versus Federal Regulators in the US

The United States has never had one federal agency that hands out permission to run a driverless vehicle on public roads. That single fact explains most of why AV regulation in this country reads as a patchwork rather than a coherent national system, and the split isn't arbitrary.

NHTSA, the National Highway Traffic Safety Administration, sits at the federal level and regulates vehicle safety standards: crash performance, equipment requirements, the kind of thing that applies to a car regardless of which state it's driven in. NHTSA has also published voluntary guidance specifically addressing autonomous vehicles. What it has not done, and structurally cannot do under the current framework, is issue the permit that lets a specific company run a specific driverless service on a specific stretch of road. That division of labor, federal equipment standards on one side and state operating authority on the other, predates autonomous vehicles by decades; AVs simply inherited a structure built for a very different kind of vehicle regulation.

NHTSA does have one federal-level lever that intersects with deployment even though it stops short of granting an operating permit: the exemption process for vehicles that don't meet Federal Motor Vehicle Safety Standards written around the assumption of a human driver, requirements like a steering wheel or foot pedals. A company building a vehicle without those controls can petition NHTSA for an exemption rather than redesigning the vehicle to include controls nobody intends to use. That process runs on its own timeline, separate from anything a state DMV or the CPUC decides, and a company can hold a state operating permit while still waiting on a federal exemption for the vehicle design itself, or the reverse. The two approval tracks don't have to move together, and in practice they often don't. That petition process has historically moved slowly enough that some companies have opted to include manual controls anyway, even when full removal was the eventual design goal, simply to avoid waiting on a federal timeline they couldn't control.

That authority sits with the states. Most issue testing and deployment permits through their DMV. California does it differently, splitting the responsibility between the DMV and the California Public Utilities Commission, with the CPUC taking the lead on anything involving passenger-carrying service rather than pure testing. A company cleared to test in one state has to go through an entirely separate approval process to test in the next one, because there is no federal permit that travels with it.

The substance of what a state actually requires varies as much as the paperwork does. Some states require a licensed human safety operator behind the wheel at all times, regardless of how the vehicle is marketed. Others permit fully driverless operation with no human aboard once a company clears the relevant testing milestones. Incident-reporting obligations differ too, with some states requiring disclosure of every disengagement or collision involving a test vehicle and others asking for far less. A framework built to let each state set its own rules necessarily produces this kind of substantive divergence, not just a difference in which office stamps the form.

Compare that to how Germany structures the same question and the difference in institutional design becomes obvious fairly quickly. Whether the state-by-state approach will eventually give way to something more centralized, or whether it will stay this way indefinitely, is not something regulatory documents settle in advance. It shows up first in enforcement, which is exactly what disengagement reporting tracks state by state.