D.C. Council Proposes a Costly Path for Autonomous Vehicles in the Nation’s Capital

On May 1, three members of the D.C. Council introduced a new bill, titled the Autonomous Vehicle Deployment Authorization Amendment Act of 2026, that would create a pathway for the deployment of autonomous vehicles (AVs) in the District of Columbia. Reflecting the Council’s approach to AV deployment, the lead sponsor of the legislation has said that “we didn’t need to be the first city to bring driverless cars to our streets, but I don’t want us to be the last.”

The legislation, if enacted in its current form, would theoretically allow driverless transportation on public roads in the District. But the high cost of permitting and operations and significant restrictions on AV operators may complicate deployment efforts in the Nation’s Capital.

Current Status of AVs in the District of Columbia

Even though robotaxis and other autonomous vehicles have greatly expanded their operations across the country, they are not allowed to operate in D.C. without a person behind the wheel. Under current D.C. law, the commercial operation of AVs is prohibited and testing must include a safety driver in the vehicle ready to take over the driving task. As a result, while robotaxis have become a common sight in D.C., they always have a human in the driver’s seat.

The proposed AV legislation would cover SAE Level 3, 4, and 5 systems. It follows the recent publication of a long-awaited report on AVs commissioned by the D.C. Department of Transportation (DDOT). The report was mostly written in 2024, but not released by DDOT until April 2026, and provides a broad description of federal and state AV policy, a literature review, and a discussion of potential workforce impacts.

Key aspects of the proposed legislation include:

Permitting Requirements: Under the proposed legislation, Level 4 and 5 systems would require a permit for testing or commercial use. Commercial permit applications would include extensive information about the vehicle and its capabilities; a certification that the vehicle will (with certain exceptions) “operate in compliance with the laws and regulations of the District and of the United States”; proof of liability coverage; a first responder interaction plan; and a “continuity of operations plan” that deals with “emergency circumstances” such as power outages or extreme weather. An initial permit would normally be valid for three years and then would be eligible for renewal.

Testing Miles Requirement: Applicants for commercial permits would have to certify that they have test driven their vehicles for at least 250,000 miles within the District. This requirement mirrors the regulation recently finalized for AVs in California. Notably, the District of Columbia has 1,519 miles of public roads, meaning an applicant would have to test drive every inch of those roads an average of 165 times. This requirement would be in spite of statistical research calling into question the efficacy of miles-driven requirements to establish AV safety.

Cost of Permitting and Operations: The right to operate AVs commercially in the District would come at a steep cost. An applicant seeking an initial commercial AV permit would first be required to pay a nonrefundable application fee of US$1 million. If the application is granted, the company would then owe an additional US$5 million permit fee, bringing the total cost of a three-year permit to US$6 million. Renewals would also carry significant expense: a renewal application would require a further US$500,000 fee, and issuance of the renewed permit would cost an additional US$1 million. By contrast, the permit application fees for a human-driven ride-hail service in the District total US$5,500.

On top of those fees, commercial AV operators would pay a tax of US$0.15 per vehicle mile traveled. It is not clear whether this tax would be in addition to, or be in place of, the 6% tax on gross revenues that applies to all ride-hails that originate in the District.

Fleet Limits: AV companies would be initially limited to operating 200 vehicles. To expand the fleet beyond that number, a permittee would have to submit a “comprehensive plan” that addresses parking, reducing “disparate availability or wait times” across the city’s wards, and minimizing “deadheading” trips without a passenger or destination.

After approval of a company’s comprehensive plan, the DDOT may raise the fleet limit above 200 “through rulemaking.” The legislation does not specify whether each company seeking to operate more than 200 AVs would need its own individualized rulemaking or if the DDOT would conduct a single rulemaking that raises the fleet limit more generally.

Tort Liability: The legislation provides that when an autonomous driving system (ADS) is engaged at the time of a crash, “the ADS manufacturer of that system shall be deemed the operator of the vehicle for the purpose of … Tort liability … without the necessity of pleading or proving a product defect under applicable products liability law.” Moreover, if onboard vehicle data show that the ADS was active at any point in the 30 seconds before a crash, there would be a “rebuttable presumption” that the ADS “was engaged at the time of [the] crash.” The ADS manufacturer would bear the burden of rebutting this presumption “with clear and convincing evidence.”

No Mandatory Arbitration of Disputes: The legislation would prohibit permitted companies from requiring their customers to agree to mandatory arbitration of liability disputes. This provision is similar to a clause in AV legislation currently pending in the Virginia legislature. Banning arbitration raises preemption questions under the Federal Arbitration Act, which requires the enforcement of arbitration clauses in commercial contracts.

Congestion Effects: The Council members’ letter accompanying the proposal indicates that the comprehensive plans are designed in part to limit traffic congestion. However, there are already over 300,000 registered vehicles in the District, so AV fleets that initially total no more than 200 may not have much of an impact on overall traffic levels, especially if they displace the use of human-driven ride shares, taxis, and privately owned vehicles.

Crash Reporting: Commercial AV companies would be required to provide quarterly reports on their operations, including “any changes the permittee has implemented or intends to implement following a crash that occurred during the reporting period.”  In addition, these companies would have to inform the DDOT of a crash resulting in death, injury, or property damage — in other words, virtually every crash — within eight hours after the crash. That is a considerably tighter time frame than the five-day reporting requirement that applies to even the most severe crashes under the National Highway Traffic Safety Administration’s Standing General Order for automated systems.

Revocation of Permits: The legislation would create a process for revoking an AV permit “if the Department determines that a permittee’s operations create an unreasonable risk to public safety.”

Level 3 Prohibited?: As written, the legislation appears to effectively prohibit the use of Level 3 systems in privately owned vehicles in the District, even though several major manufacturers have begun offering Level 3 as an option. The bill provides that “no autonomous driving system shall be engaged on public roadways in the District” except for: (a) Level 4 and 5 systems that have received a commercial permit; (b) testing operations; or (c) Level 1 or 2 systems. None of these categories seemingly includes Level 3 usage outside of testing. It is not clear that the drafters of the bill intended this prohibition, as the sponsors’ letter introducing the bill says that it “generally restricts the use of Level 3, 4, and 5 systems, except when an operator has received a permit for either commercial operations or testing.”

Next Steps

Before becoming law in the District of Columbia, the bill must go through multiple additional steps. It will first be considered by the Council’s Committee on Transportation and the Environment, while two other Committees will also have an opportunity to provide feedback. If the Committee acts favorably on the legislation, the measure will advance to consideration by the full Council. Should the Council approve the bill, it will go to the Mayor’s desk. Then, if the Mayor signs the legislation, it must be submitted to Congress, which retains the authority to review it under the District of Columbia Home Rule Act.

Takeaways

• The key operative date in the legislation is January 1, 2028. On that date, AV companies with permits may launch on-demand autonomous services. Given the explosive growth in AV operations elsewhere in the country, the District may have some catching up to do by that point.
• The legislation in its current form would raise a variety of legal questions, including over its tort liability provisions, the permissibility of Level 3 systems, the type of rulemaking required to increase fleet limits above 200 vehicles, and the enforceability of the ban on mandatory arbitration.
• The proposed high costs of AV permits and operations may be cost-prohibitive, especially in light of the caps on fleets. AVs already face considerable challenges to profitability. In particular, the seven-figure permitting fees may put operations in the District out of reach for all but the most heavily capitalized companies.
• The elevated fees also reflect broader policy priorities within the District. In addition to covering the administrative costs of the District’s autonomous vehicle program, the bill directs half of the remaining revenue to support public transit and the other half to fund education and workforce training programs for “ride-share drivers who have been or are at-risk of job displacement due to the adoption of commercial autonomous vehicles.” These allocations respond to longstanding financial pressures facing the Washington Metropolitan Area Transit Authority, while also addressing concerns frequently raised by critics over the workforce impacts of autonomous vehicle adoption.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.