Source: http://www.newyorker.com/reporting/2013/...

Almost from the beginning, the field divided into two rival camps: smart roads and smart cars. General Motors pioneered the first approach in the late nineteen-fifties. Its Firebird III concept car—shaped like a jet fighter, with titanium tail fins and a glass-bubble cockpit—was designed to run on a test track embedded with an electrical cable, like the slot on a toy speedway. As the car passed over the cable, a receiver in its front end picked up a radio signal and followed it around the curve. Engineers at Berkeley later went a step further: they spiked the track with magnets, alternating their polarity in binary patterns to send messages to the car—“Slow down, sharp curve ahead.” Systems like these were fairly simple and reliable, but they had a chicken-and-egg problem. To be useful, they had to be built on a large scale; to be built on a large scale, they had to be useful. “We don’t have the money to fix potholes,” Levandowski says. “Why would we invest in putting wires in the road?”

Smart cars were more flexible but also more complex. They needed sensors to guide them, computers to steer them, digital maps to follow. In the nineteen-eighties, a German engineer named Ernst Dickmanns, at the Bundeswehr University in Munich, equipped a Mercedes van with video cameras and processors, then programmed it to follow lane lines. Soon it was steering itself around a track. By 1995, Dickmanns’s car was able to drive on the Autobahn from Munich to Odense, Denmark, going up to a hundred miles at a stretch without assistance. Surely the driverless age was at hand! Not yet. Smart cars were just clever enough to get drivers into trouble. The highways and test tracks they navigated were strictly controlled environments. The instant more variables were added—a pedestrian, say, or a traffic cop—their programming faltered. Ninety-eight per cent of driving is just following the dotted line. It’s the other two per cent that matters.