The Michigan Mobility Transformation Center, a government-industry partnership based at the University of Michigan, said it hopes to establish a shared fleet of networked, self-driving vehicles in Ann Arbor by 2021.

"Ann Arbor will be seen as the leader in 21st century mobility," said Peter Sweatman, director of the U-M Transportation Research Institute. "We want to demonstrate fully driverless vehicles operating within the whole infrastructure of the city within an eight-year timeline and to show that these can be safe, effective and commercially successful."

Autonomous vehicle technology, researchers say, has the potential to make vehicle transportation dramatically safer and more efficient.

"We've now entered into a period where the technology and the business models are coming together to allow us to break out of this 100-year dependence on what we've always known," said Larry Burns, a professor at Michigan Engineering and former head of research and development for General Motors.

For self-driving vehicles to bring this transformation, though, they have to be at the center of a reimagined transportation system in which vehicles are networked and shared. Simply replacing conventional models with driverless ones won't achieve the maximum benefits, Burns said.

Through the Mobility Transformation Center, U-M is working toward this goal. Researchers are in the midst of the nation's largest street-level connected vehicle experiment, “Safety Pilot,” which involves 3,000 area residents in networked vehicles. Also, U-M regents last month approved plans for a driverless car test environment. The 30-acre, $6.5 million facility — a joint project with industry and government — will allow researchers to test how the vehicles perform in complex urban settings.