Data is valuable, and as the automotive industry embraces connectivity few datasets in the world are more valuable than those generated by connected vehicles. Indeed, McKinsey estimates that vehicle-generated data could soon be worth north of US$750tr. The monetary value is clear, but there is no guarantee that it can be reaped flawlessly.
An excellent analogy, as detailed by Dan Peate, Chief Executive of autonomous insurance specialist Avinew at M:bility | California, a two-day event hosted by Automotive World, can be found in the 1849 Gold Rush. “In San Francisco, 200 people were living here,” he said. “After the Gold Rush, 300,000 people came from all over the world because they had heard there was gold in the hills. What is happening now is we have this data and everyone is talking about what we can do with it and saying ‘oh my gosh we’re going to make so much money off it’. What people forget is that the majority of the 49ers did not make any money, it was the 48ers that did.”
Each use case has a different level of privacy interest in the users and so for this to work there has to be trust
Today, there is a similar set-up. The automakers, which have access to the most data, stand to win big. Other players further down the hierarchy may find it harder than expected to tap into the veins and will need to hunt for an untouched niche. “There will be a small group of people that are going to make money off that data,” said Peate. “Where we need to focus is where is that Levi Strauss opportunity? Where is the railroad opportunity? Eventually, data will become table stakes and you’ll monetise with all these things around it.”
Fortunately, there appears to be plenty of room for opportunity, providing players choose their playing field and timing carefully. “We see today anywhere from five to 500 data parameters coming out of the vehicle that can be put to good use,” said Lisa Joy Rosner, Chief Marketing Officer at Otonomo. “There’s value for drivers which manifests itself in having a great driving experience and brand loyalty and then there is the actual value in terms of the licence value of that data which could be worth anywhere from pennies to dollars per vehicle per year. Cars are sending this data back to the automakers, where it is collected in databases in the cloud. Sometimes it just sits there and sometimes we can take that data and transform it so it can be used for apps and services.”
Trust and transparency
Such services could include providing real-time traffic, parking or weather updates which benefit the many. On an individual basis, there is also scope to collect select in-vehicle data points to install predictive maintenance capabilities and repair cycles. It sounds promising, but each case involves a varying level of privacy intrusion.
There will be a small group of people that are going to make money off that data
“There are cases that involve more personal data to be collected. These include usage-based insurance where rates are based on how well you’re driving, predictive maintenance, emergency services and advertisement,” said Steve Wernikoff, Partner, Honigman. “Each use case has a different level of privacy interest in the users, so for this to work there has to be trust.”
For the industry, this trust can be built in by keeping jargon to a minimum and spelling out in crystal clear terms how companies intend to use personal data.
“One of the most important things is consumer appetite,” said Rosner. “About a year ago we did a survey with Edison Research with more than 1,000 connected car owners in the US. We listed all the possible short-term available offerings that are brought to life through car data and asked if they wanted them. Overwhelming for anything related to convenience and safety there was a more than 99% approval rate. Then, when we said to get this you have to share your data, we found that only 80% of that subset was happy to do so.”
Of course, ask any consumer if they would like their car to be safer and the answer is likely to be a resounding yes. But Otonomo also found that there is some significant interest in non-safety critical data-driven functionalities—40%, for example, said would be happy to have customised billboards.
You might want your manufacturer to have braking data so they can improve on the safety feature of the car, but you might not want it used as a factor in calculating your insurance
“When we asked them what it would take for them to share their data they said trust and transparency,” added Rosner. “One of the biggest problems right now is when you opt into something you get a 50-page document with tiny print and you just check the boxes. Under GDPR requirements, we have things written in plain English and not legal jargon. Then it is easy to understand what you’re agreeing to.”
Pick and mix
Consumer consent is, of course, important, but choosing which uses cases consumer can and cannot opt-out of sharing data could be a difficult line to toe. For example, while a poor driver may opt-out of sharing their vehicle data automatically to keep their day-to-day driving habits hidden from insurance providers, as autonomy becomes commonplace that decision to not communicate their vehicle data could hamper their vehicle’s autonomous capabilities and endanger other road users.
“Data for one permissible purpose does not mean it is permissible for every other purpose,” said Jared Ho, Senior Attorney, Division of Privacy and Identity Protection, Federal Trade Commission. “You might want your manufacturer to have braking data so they can improve on the safety feature of the car, but you might not want it used as a factor in calculating your insurance.”
We see today anywhere from five to 500 data parameters coming out of the vehicle that can be put to good use
Some in the industry are already providing the needed flexibility. Otonomo, for instance, has developed a Consent Management Hub which allows consumers to choose specifically which services their data can be shared on and used for.
“Just because you agree to share your data it does not mean you do all the time regardless of the use,” said Rosner. “The Consent Management Hub allows the consumer to say ‘yes, you can share my data because I’m a good driver. No, I do not want personal billboards. Yes, I want predictive maintenance’. With that, they can grant and revoke consent. At the moment that’s just for Europe, but with the way regulations are changing, especially here in the US, we’re going to have to give consumers a window into how their data is being used and give them a say on a case by case basis.”
