Growing up in an East Texas town of 1,200 people had its benefits. But, being a kid who drove a Gandini-designed Fiat X/1-9 in the land of muscle cars and pickups, I drew some attention, as did being the only son of my pillar of the community father, who owned the big insurance business in town. He failed to enjoy the irony of an insurance agent having a son who tested the laws of automotive physics.
Imagine my surprise when I regularly heard from my father that one of his networks of cleverly hidden adult-aged spies would report to him about my exploits. Of course, I never opted into this surveillance or even read the terms-of-conditions on his use of information tracking. But no matter, I still pursued the perfect apex speeds.
Today, if a consumer has a connected car, they’re living the life I grew up with. Only it’s an AI-level spy tracking your every movement, not Mr. Wilkerson at the corner on Hwy 37. The more things change, the more they stay the same.
However, it’s not all bad. Now, imagine walking into your favorite coffee shop, where the barista, without asking, starts preparing your usual order. Convenient, right?
But what if you discovered this was possible because you’re being tracked everywhere after getting your coffee by an embedded chip in your cup, with every move and choice recorded and analyzed? And you can only opt out of it if you don’t get your coffee. This scenario might feel uncomfortably intrusive, yet it’s analogous to what’s happening with connected vehicles today.
The Dangers and Abuses of Data Collection
Data collected from connected vehicles serves multiple purposes, from improving vehicle performance to offering personalized services. But it also opens up a Pandora’s box of privacy concerns. For instance, insurance companies could secretly use consumers’ driving speed and style data to adjust their premiums. Location data is sold to advertisers, leading to, at a minimum, an influx of targeted ads based on a consumer’s travels.
Moreover, a data breach could result in sensitive information about consumer movements and habits falling into the wrong hands, posing security risks and potential misuse. Would OEMs and data aggregators be responsible for that? Shouldn’t they?
The Major Players in Automotive Data
If consumers wanted someone to target, who would they go after? Several companies are at the forefront of collecting and analyzing data from connected vehicles:
- SAP: Provides comprehensive automotive solutions that include data management and analytics services.
- IBM: Leverages data analytics and IoT technologies to offer various automotive solutions.
- Otonomo: Aggregates car data from multiple sources to monetize it effectively.
- Wejo: Specializes in connected car data, delivering insights and analytics to different stakeholders in the industry.
- Telenav: Offers location-based services and data analytics for automotive applications.
These companies, along with traditional OEMs like Ford, General Motors, and Tesla, are key players in the automotive data ecosystem, shaping the future of connected vehicles.
The Market for Data Harvesting from Connected Cars
The market for data harvesting from connected cars is substantial and rapidly growing. According to a report by McKinsey & Company, the global revenue pool from car data monetization could reach up to $800 billion by 2030. This growth is driven by the increasing number of connected vehicles on the road, advancements in data analytics technologies, and the expanding range of services offered through vehicle data.
The data collected from connected cars is valuable for various applications, including personalized marketing, predictive maintenance, insurance telematics, traffic management, and autonomous driving development. As the automotive industry continues to evolve, the importance and value of car data are expected to increase further, making it a key area of focus for OEMs, technology companies, and service providers alike.
Government Use of Connected Car Data
Government entities’ potential use of connected car data is a valid concern. Governments could request access to this data for various reasons, such as law enforcement investigations, traffic management, or surveillance. While legitimate uses exist for such data, there is also the risk of misuse or overreach, leading to privacy infringements and potential manipulation.
Regulations and safeguards must ensure that government agencies’ access to this data is transparent, lawful, and subject to strict oversight—and be enforced. Consumers should be aware of how their data might be used and have the option to control their privacy settings.
The balance between leveraging technology for societal benefits and protecting individual privacy is a complex issue that requires ongoing dialogue and careful consideration.
The Responsibility to Protect Consumer Data
For those in the industry, protecting consumer data should be Job One, especially when technology can be used for beneficial and more sinister purposes. With the market for data harvesting from connected cars proliferating, it’s essential to recognize the potential risks and take proactive measures to safeguard privacy.
Since dealerships and OEMs push this technology, transparency and consumer education are paramount. Recent studies show that 82 percent of connected car drivers don’t know how much data their vehicle collects.
Dealerships should be responsible for informing customers about the collected data, its use, and its implications for their privacy. Currently, this information is hidden in the ToC.
It is also crucial to ensure customers are educated and provide options for those who wish to opt-out or limit data collection without sacrificing essential features. Unfortunately, OEMs have a take-it-or-leave-it mentality bit consumer and dealership pressure could change this.
By highlighting the size and growth of the data harvesting market, we can underscore the urgency of addressing these issues and the responsibility that automakers, dealerships, and tech companies have in ensuring the safe and respectful handling of consumer data.
Who Really Owns the Data?
An often-overlooked question about connected cars is who truly owns the data. While the individual car driver’s habits and preferences are being tracked, they seldom see any compensation for their data being used and monetized. This raises important ethical and legal considerations about data ownership and the rights of consumers.
The California Privacy Protection Agency (CPPA) plans to obtain a clearer picture of what data automakers and other companies collect from the state’s tens of millions of drivers. The agency knows that drivers benefit very little from what will soon be an $800 billion business.
Dealerships may need to be educated that, according to the Fight to Repair Substack, OEMs collect drivers’ data, package it up, and sell it to those who might want access to it – from insurance firms to infotainment companies.
Businesses buying this data use it to improve services like directions, music, and third-party apps designed to run inside vehicles or to inform actuarial models used by insurance firms. However, the consumer receives no compensation for this and cannot access it.
Shouldn’t the drivers, whose behavior and preferences are the lifeblood of this data ecosystem, have a say in how their information is used and potentially be compensated for it? This conversation needs to happen, not just among industry insiders but in the public domain, to ensure that the interests of data aggregators and corporations do not overshadow the rights of individuals.
Balancing Innovation with Privacy
No doubt connected vehicles offer many benefits but present significant data privacy challenges. In this new era of connected cars, we need to remind ourselves that the benefits of innovation must be balanced with the imperative to protect consumer privacy. The automotive industry, much like the small-town networks of my youth, is at a pivotal junction where the allure of technological advancement now overshadows the sanctity of individual privacy.
Dealerships, OEMs, and technology providers must collaborate to ensure that the revolution in connected cars does not come at the expense of our personal freedoms. By proactively addressing privacy concerns and prioritizing transparency, the industry can foster consumer trust, safeguard their privacy, and steer the future of connected cars with integrity and confidence.
Our digital future is becoming more complex, but with a vigilant approach, the automotive industry can continue to innovate while upholding the privacy and security of its customers. In this delicate balance, we find the true essence of progress — where technology enhances our lives without compromising our values.
