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Carmakers are lining up to devour a buffet of data cooked up by consumers using their sensor-laden vehicles. Some connected-car data is already being monetized, or bought and sold, but according to an October 2017 report by market-research firm Frost & Sullivan, only about 15 percent of the connected car’s potential “use cases” are being harvested. There is still a whole mess of potential options, such as municipalities keen on making smart cities, fleet-management companies looking to improve efficiency, and, of course, advertisers drooling over captive audiences.
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The sheer value of the amount of data expected to be flowing, and subsequent revenue opportunities for a whole range of players, has prompted some industry observers to wonder whether car buyers might get some kind of compensation—royalties or potential discounts on vehicle purchases, for example—in exchange for signing over their data. So far, such comments have been meant more to underscore how valuable the information is, rather than to predict actual incentives from automakers. “We have not considered this type of incentive to date,” Toyota spokesperson Brian Lyons told C/D in an email.
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But Toyota and other automakers have very much considered the use of connected-car data. In April 2016, Toyota launched a new company, Toyota Connected, that harvests vehicle data in a partnership with Microsoft Azure cloud technology to “develop predictive, contextual, and intuitive services that help to humanize the driving experience while pushing the technology into the background,” the company said at launch.
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Last May, BMW announced BMW CarData in Europe. It promises “customized service options” for drivers based on data culled from connected cars, which totaled some 8.5 million vehicles at launch. For example, BMW owners could be offered convenient service scheduling, deals on insurance, or customized infotainment settings, the company said. The system uses IBM’s Bluemix cloud platform to gather raw information, which is then processed and analyzed by IBM’s Watson Internet of Things (IoT) system and offered to third-party service providers. BMW CarData is currently only in use in Europe; a company spokesperson said a U.S. launch is imminent, but no timeline has been confirmed.
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General Motors, which has been a connectivity leader with its 21-year-old OnStar service, currently has about 7 million vehicles globally that are 4G LTE capable, and a total of about 13 million that have some level of connectivity, according to company spokesman Vijay Iyer. In July, GM created a new position, chief data and analytics officer, and filled it with A. Charles Thomas, who was previously chief data officer at Wells Fargo. “He basically is looking at data as a business opportunity,” Iyer said.
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Automakers are preparing for a not too distant future in which digitally derived revenues could stand alongside good old-fashioned sales of sheetmetal. As the feeding frenzy gets more organized, the odds seem long that consumers will get a piece of the pie—at least in the form of vehicle discounts, let alone royalties. In general, businesses aren’t inclined to give money away for something consumers are already freely generating.
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And freely generating data consumers are. Anyone who uses Google and Facebook is giving up heaps of it regularly, not to mention those of us who download apps onto our smartphones and then turn over our location and personal information. There’s an argument that, with connected cars, automakers are simply providing another platform—rolling smartphones, if you will—and the use of customer data is billed as an exchange for services rendered.
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That has not stopped John Ellis, former head of the Ford Developer Program, which helped develop AppLink for connected Ford and Lincoln vehicles, from dreaming up the notion of a Zero Dollar Car, a name he has used for the title of a short autobiographical book. In his book and at public speaking appearances, Ellis presents a hypothetical $ 40,000 car and knocks thousands of dollars off the price for consumers who sign over data coming from the sensors on everything from their windshield wipers and headlights to the microphone and GPS. He said the idea behind the Zero Dollar Car is “an advocacy call to awareness.”
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- Hyundai Plans Gigabit Ethernet for Some In-Car Networks, but What Does That Mean?
- Toyota Intends to Deploy Autonomous Rolling Stores by 2020
- Control a Car with Brain Waves? Nissan Plans to Show It’s Possible
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Ellis is urging consumers to be mindful of each time they give up their data, and he calls for transparency in how data is collected. Automakers, for their part, insist that no consumer data is being or will be gathered without first asking for consent in each use-based scenario. But with the data feast already underway, Ellis said he so far sees consumers having very little leverage. “What are they going to do, not buy the car?” he said.
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For those of you who’d rather not be an ingredient in the burgeoning data market, that’d be a start. But keep in mind, you’ll also need to give up your smartphone, check out of social media, and generally stop using the internet. To avoid this feast, you’ll probably have to leave the grid altogether.
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