A 1967 state law that requires drivers to keep at least one hand on the wheel effectively prohibits private companies from testing driverless car technology in New York, according to the Department of Transportation. And while the state Senate has passed legislation to allow testing of driverless cars, the DOT urged the City Council on Friday not to support that legislation until New York City has had a chance to present safety concerns specific to driverless cars on congested, narrow city streets.

DOT Deputy Policy Commissioner Michael Replogle gave the harrowing example of a driver killed while testing out Tesla's autopilot function over the summer. "We've witnessed things like the recent death of the Tesla driver in Florida who was completely inattentive [at the wheel]," he said. "He was decapitated in a very severe crash with a tractor trailer. And that [street] was a much less complex condition than NYC."

"We don't object to the testing of these vehicles in NYC," he added. "We do want to makes sure it's done well and correctly with NYC input."

Friday's hearing was the city's first on the subject of autonomous vehicles. The Transportation Committee heard testimony from an Uber engineer and Tesla policy head, as well as the Self-Driving Coalition for Safer Streets—a coalition made up of Ford, Uber, Google, Lyft and Volvo that's pushing for "rapid deployment" of automated driving across the country.

Testimony from both the public and the private sector alluded to the potential for a sort of automated vehicle utopia, where driverless cars might serve as a public transit option. These vehicles "could reduce traffic by encouraging ride sharing," Replogle said, adding, "They could decrease personal car ownership, and reduce need for parking, making more space for bike lanes, and public housing."

"They hold the potential for increased street safety, as the vast majority of crashes are due to human error," he added. "We are intrigued by vehicles programmed to safely follow the speed limit and traffic laws."

The DOT is already testing special sensors on 8,000 vehicles, at 13,000 intersections, and along the FDR Drive that warn drivers of pedestrians and other drivers in their vicinity—a federally-funded pilot that could ease the eventual transition to automated vehicles, Replogle said.

But Friday's testimony was heavy on the precautions. For one, the DOT is concerned that the federal government's new automated vehicle safety policy, released earlier this month, doesn't provide enough input on congested city driving, specifically. Replogle also envisioned a city where automated vehicles could become highly-sophisticated personal vehicles, potentially adding to traffic congestion without sufficient regulations. "This tech could result in ghost vehicles, driving around to find parking after dropping their owners off," he cautioned.

NYC will miss chance to lead on autonomous cars if our laws do not even allow us to test them on city streets in a safe & controlled way. pic.twitter.com/u0vycVkaPX — Dan Garodnick (@DanGarodnick) October 28, 2016

The Society of Automotive Engineers has a scale system for automated driving: from level one (cruise control) to level five (entirely automated, no steering wheel or pedals). In New York City, "In the short term, the most likely type of automative vehicles we will see will be Level 3, which will require the driver to take control in some conditions," Replogle said. (Uber recently rolled out a Level 3 pilot in Pittsburgh.)

"How is a driver who is reading, napping, or surfing the web going to be alerted that they [suddenly] need to be alert?" Replogle asked. "How do we make sure the automated vehicles don't contribute to driver inattention problems?"

Despite these concerns, Transportation Committee Head Ydanis Rodriguez was eager to get started. "Do we have to wait for the state to authorize us to be a leading force throughout the state and throughout the nation?" he wondered. "To be more aggressive and incentivize the private sector to work with us?"

But Bushwick Councilmember Antonio Reynoso had a cautionary message for the private sector reps at Friday's hearing. Earlier, the Taxi and Limousine Commission had testified that there is "real potential for a displacement of workers" as automated vehicle technology advances in New York. Currently, the TLC has 150,000 licensed drivers.

"This is going to be a fight regarding jobs," Reynoso predicted. "You guys are just poking at it right now, but once you dive in that's the fight you're going to have. This jobs fight is going to be big for you."

The DOT, which currently has a team of eight people focusing on automated vehicles, said the next step is to meet with state legislature. In the meantime, Tesla suggested some old-school infrastructure improvements. "Our technology operates best on maintained roads," said Will Nicholas, Northeast regional sales manager at Tesla. "So, fixing potholes, signage, and painted road lines is important."