Driverless cars will be tested on U.K. roads starting in January, providing an opening for carmakers and technology companies as the government looks for ways to improve safety and lower pollution.

Three cities will be chosen for a share of 10 million pounds ($17 million) to test driverless cars in trials lasting 18 months to 36 months, the Business, Innovation & Skills Department said today.

The trials to test cars that can operate with or without the supervision of a person able to take control, may help create a market for the vehicles. Bayerische Motoren Werke AG, Volvo Cars and Daimler AG are among carmakers developing features such as automatic parking that don’t require a driver. Google Inc. has said it will manufacture 100 fully self-driving vehicles that operate without a steering wheel or an acceleration pedal.

“The excellence of our scientists and engineers has established the U.K. as pioneers in the development of driverless vehicles,” Business Secretary Vince Cable said in a statement. With the trials, driverless cars “will take to our streets in less than six months, putting us at the forefront of this transformational technology.”

The U.S. has had a faster start. By 2012, Mountain View, California-based Google had conducted more than 300,000 miles of driverless car testing, with U.S. states Nevada, California and Florida already enacting legislation that paves the way for the operation of autonomous vehicles on public roads. The U.K. will review road regulations to accommodate the new technology, the BIS said.

Legal Concerns

As the cars become more popular, regulators and insurance companies must grapple with security vulnerabilities, such as hackers taking over Internet-connected cars, the need for the vehicles to communicate with each other and the question of liability in an accident without a driver, said Murray Raisbeck, a partner at KPMG who specializes in insurance.

“It’s fraught with a number of challenges that just don’t exist today,” Raisbeck said in an interview. “There’s a whole field of different risks that the legal field is going to need to cope with.”

In February, U.S. car safety regulators proposed rules to require vehicle-to-vehicle technology that would let new cars talk to each other, exchanging data such as speed and position and sending warnings about imminent collisions.

“Driverless cars have huge potential to transform the U.K.’s transport network,” Transport Minister Claire Perry said in the statement. “They could improve safety, reduce congestion and lower emissions, particularly CO2. We are determined to ensure driverless cars can fulfill this potential which is why we are actively reviewing regulatory obstacles to create the right framework for trialing these vehicles on British roads.”

To contact the reporter on this story: Alexa Liautaud in London at aliautaud@bloomberg.net To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net Amy Thomson, David Risser