NHTSA's proposed Driver Mode would limit or inhibit certain functions on your phone. NHTSA hopes that the functions still available can be accessed in an easy to use and streamlined interface, much like the Android Auto implementation on phones. The agency also wants to encourage both smartphone manufacturers and automakers to make phone pairing easier to access, and when a phone is paired it should disable some features (although the report doesn't specify which ones). Apple and Google are both working towards this goal with CarPlay and Android Auto, but those only lock out functions within their interfaces, not the actual phone.
This new proposal is NHTSA's second phase in addressing distracted driving. The first was announced more than three years ago and focused on automakers designing less-distracting infotainment systems. It's part of the reason that you can't input text into some navigation systems when the vehicle is in motion. While both phases have some good ideas, there are two big problems with both of NHTSA's current proposals.
The first is that these recommendations have no teeth. NHTSA has no authority to force manufacturers to obey these guidelines. In theory, any company could simply choose to ignore NHTSA and design and build whatever type of device or system it wants. While it seems most automakers have taken the advice to heart, it's all still voluntary.
The second big problem is determining whether a device is being used by a passenger or a driver. One great thing about having a passenger is allowing them to call, text, or change the music while a driver focuses on the road. But there currently seems to be no good way of telling who is holding the phone. Many people were frustrated when the makers of Pokemon Go prevented the game from being played at speeds higher than 10 mph, but it will be an actual problem if a passenger can't use basic features like texting or internet browsing because their device thinks they're behind the wheel.
NHTSA's guidelines for both automakers and smartphone manufacturers seem like a good step toward reducing distracted driving. The technology will improve as it always does and manufacturers will figure out a way to make phones useful for both drivers and passengers. Until then, if you're driving, please put your phone down and concentrate on the road.