States Write the Laws. Cities Bear the Consequences. Resolving the State-City Tension in Autonomous Vehicle Regulation

Part 1: States Write the Laws. Cities Bear the Consequences.

The arrival of AVs on city streets is not the first technological disruption to challenge urban transportation governance.

Before robotaxis, there were ridehailing giants: the aggressive state-level preemption battles by Uber and Lyft.

The Déjà Vu of Disruption

Transportation Network Companies (TNCs) entered cities fast and hard—sometime in violation of existing for-hire rules.

Cities tried to respond: background checks, safety standards, curb fees, support for public transit. But the real showdown didn’t happen at city hall.

🏛️It moved to the state capitol.

Lawmakers in 41 states passed laws that preempted, or overruled, the authority of local governments to regulate the TNC industry. Cities lost control over key aspects of their transportation systems.

The results?

• Increases in traffic congestion

• challenges to public transit ridership, and

• an inability to support equity goals or enforce local labor standards.

In the long term, this hostility between TNCs and cities did not help the industry either.

AVs must not become another episode of “disruption first, governance later.”

Two Compelling, Yet Conflicting Principles

The State’s Argument: Streamlined, Scalable, Uniform

From the state perspective, regulatory consistency is key. AV developers already face the complexity of navigating 50 different legal systems.

Add hundreds of inconsistent municipal ordinances, and the result is an impossible web of compliance that slows progress.

A statewide framework offers:

• Regulatory certainty

• Simplified compliance

• A clear path for innovation and investment

From this perspective, state preemption is a necessary tool to prevent a chaotic regulatory landscape.

The City’s Argument: Context Matters, Consequences Are Local

But cities push back—because they live with the consequences. While states authorize vehicles, cities own the infrastructure where they actually operate: the streets, curbs, and traffic signals.

AVs impact local cities'

• Congestion

• Public transit ridership

• Local enforcement

• Equity goals

A one-size-fits-all state law cannot reflect the reality on the ground. A dense city like San Francisco faces different challenges than a rural town.

Cities need flexibility to tailor policies to their geography, population, and community goals.

Without local authority, cities risk having a future imposed on them—one that may not align with their residents' needs.

Fear of Preemption Creates a Cycle of Inaction

This governance gap has led to a state of municipal paralysis.

A 2019 survey of transportation and planning officials in over 120 large U.S. cities paints a stark picture of unpreparedness.

• A majority of city officials reported that their cities were not prepared for the arrival of AVs.

• Most municipalities had not assigned clear departmental responsibility for AV policy

• 81% of officials stated that little to no staff time had been committed to studying AVs.

This lack of preparation is not born of ignorance.

It’s a rational response to legal uncertainty.

City officials are adopting a “wait-and-see” mentality, holding off on local planning for federal or state laws.

Why commit scarce resources when a state law could override local policy tomorrow?

And therein lies the self-fulfilling trap:

• Fearing state preemption, cities underinvest in AV planning

• States point to this lack of local preparedness to further justify state preemption

• Therefore, even less local initiative

The fear of preemption creates the very conditions used to justify it.

Here is the paradox: States write the laws. Cities bear the consequences.

While state legislatures authorize AVs to operate, it is the cities that must manage the daily reality:

• AVs operate on city-maintained streets

• park at city-managed curbs

• interact with city-run traffic signals, and

• directly impact the safety and quality of life of city residents

Part 2: Where the Rubber Meets the Road

AV aren’t just standalone machines—they’re part of a broader transportation ecosystem. And it’s in cities that this ecosystem takes shape.

Yet, State Laws Overlook City Goals

The problem is not just that different cities have different contexts; but that the objectives of cities are ABSENT from state legislation.

State AV laws focus on technology and safety: defining liability, setting insurance minimums, and establishing registration and permitting processes.

However, state laws neglects—or worse, undercut—the granular, quality-of-life objectives in cities.

Municipal goals are not just about vehicle safety, but how its operation shapes the urban fabric.

Cities are concerned with

• ensuring livability,

• managing congestion,

• promoting sustainability,

• support public transit, and

• ensuring mobility equity

Six City Functions in Managing AV Day to Day

Cities manage the core systems that AVs depend on: road conditions, curbs, traffic signals, and zoning.

They also oversee how AVs interact with transit, affect congestion, and shape access and equity across communities.

They ultimately determine the success or failure of AVs in an urban context.

• Street Design and Infrastructure

Cities are responsible for the state of good repair of their roads, including the quality of lane markings, signage, and pavement—all of which are vital for the proper functioning of AV sensor suites.

A poorly striped lane or degraded ramp disrupts AV navigation and compromise safety.

• Curb Management

Cities own and manage the curb, the most valuable and contested urban real estate. Cities regulate who gets access to the curb and when—balancing the needs of buses, delivery vehicles, pedestrians, cyclists, and now, AVs.

With fleets of AVs picking up and dropping off passengers or parcels, effective curb management prevents double-parking, blocked crosswalks, and conflicts with transit and active modes.

• Land Use and Zoning

Through zoning codes, cities shape how land is used—setting rules on

• parking requirements

• building setbacks

• building height and density

AVs could reduce the need for parking, enable more efficient land use, and open up opportunities for infill and housing.

Alternatively, they could make commutes longer and encourage sprawl.

Cities have the tools to manage these outcomes. City planning must anticipate how AVs will reshape travel behavior and urban form.

• Traffic Management and Congestion

Cities operate traffic signals, design intersections, and implement congestion mitigation strategies. They are the first responders to crashes and disruptions.

The impact of AVs—whether they ease or exacerbate congestion—will hinge on deployment model, vehicle occupancy, and routing behavior, all of which intersect with local traffic operations.

• AV - Public Transit Integration

Cities and regional transit agencies operate buses, subways, and other public transportation systems.

AVs present a dual possibility: AVs have the potential to enhance these systems by offering：

• first- and last-mile connections,

• replacing low-productivity bus routes, and

• optimizing the whole network design.

At the same time, without thoughtful coordination, they can act as a direct competitor that siphons ridership and undermines the financial viability of public transit.

Cities are responsible for planning these interactions and building seamless connections across modes.

• Mobility Equity

Cities are stewards of transportation equity:

1. They plan for universal access,

2. Ensure affordable travel options for underserved communities, and

3. Set policies to protect those without cars, smartphones, or credit cards.

AVs offer promise for improving mobility for seniors, people with disabilities, and residents in transit deserts

—but without local oversight, private AV fleets may concentrate service in more profitable, affluent areas, exacerbating inequities for low-income communities.

Coming soon: Resolving the State-City Tension in Autonomous Vehicle Regulation

Part 3: Three Postures of Cities in AV Deployment

• The City as Regulator

• The City as Enabler

• The City as Co-System Designer

Part 4: A Policy Toolkit for State-City Alignment

• Five-Step Mechanism for Co-Governance

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