Using Data from the Modern Automobile

June 01, 2020

Modern automobiles, loaded with technologies that include communications systems, on-board diagnostics, GPS navigation, and a wide range of other features, at the end of the day have transformed the vehicle into a highly connected computer, one that also leaves behind a “data wake” as it moves down the highway. Safer cars, safer drivers, safer roads all are part of the potential, as are advances allowing consumers new options for making purchases and insurers to tailor coverage.

While this has created enormous investment and development opportunities, it also poses substantial risks that must be recognized and mitigated. In the age of coronavirus (COVID-19), these technologies and the data they emit may also tempt high-tech companies and state actors to monitor movement, traffic, and travel in new ways. The commercial and governmental uses of this data also raise issues of privacy and adequate disclosures to consumers.

Consider the following when contemplating strategies to utilize the data these technologies can provide:

Market Overview

  • The market potential: Pre-COVID-19, more than 130 million Americans spent nearly an hour commuting to work in modern vehicles that in many ways are highly connected computers. Connected commerce (through wireless connections and the internet) represents a $230 billion market. In the past 10 years, investors have put more than $20 billion into connectivity and infotainment technologies.
  • Some drivers of the industry include a priority on safety, such as advanced driver assistance systems (ADAS); improved in-car information systems; demand for improved fleet efficiencies, such as the need for autonomous vehicles to be connected and managed remotely, among others.
  • In-car payment technologies offer potential for making purchases at gas stations, repair shops, tolls, and parking, as well as paying for curbside pickup and contactless purchases. Gas companies and credit card companies are partnering with automobile manufacturers.

Data Acquisition and Use

  • The “data wake” left behind as a car motors down the highway includes information from event data recorders, onboard diagnostics, navigation systems, cameras and sensors, apps such as Apple CarPlay, and motorists’ mobile devices. This allows for the possibility of monitoring driver performance, creating potentially powerful evidence in litigation and for insurance purposes, and, in the COVID-19 era, could provide a means for governments to carry out contact tracing and enforcing social distancing and interstate travel restrictions.
  • Threshold questions include: Where is the data? Whose data is it? Who can access that data? How would you access it? How would you extract and use that data? Data privacy protections vary by country and state.
  • Data privacy is a fundamental concern in the European Union, and under the General Data Protection Regulation (GDPR), subjects have various rights, including the right of erasure. There is no comprehensive privacy law in the United States but California’s new consumer privacy law offers protections against sale to third parties without consent.

Regulatory and Enforcement Risks

  • Obvious risks include privacy and data security, but less obvious risks include laws and regulations governing money transmission, debt collection, and the receipt and collection of data you might not want. Consumers may have different expectations regarding the use of data from vehicles than they do when, for example, internet shopping so disclosures may need to be different and more prominent.
  • Companies such as manufacturers partnering with app developers, fintechs, and analytics providers, must do their due diligence. Consumers are interacting with the manufacturer’s brand and will not see the distinction if a payment app in the vehicle suffers a data breach.
  • Just because a car can create certain data does not necessarily mean you want to have it. Storage of years of vehicle location data may induce law enforcement authorities to start treating companies like they treat telecom providers, as the first stop for getting location evidence and testing alibis.
  • Four key questions to ask in terms of risk mitigation: Does the benefit of creating and keeping this data exceed the cost of protecting it and potentially responding to demands for it? Do you trust the partners to whom you have given access to the data or you are using to create the data? If you are going to be acting on the data in some way, is it right and legal to be acting on the data in the way you’re proposing to? Do your customers understand what you are doing with the car’s data?

Answering these questions comfortably may mean that a company is well on its way to understanding the risks that are involved, as well as getting a handle on how to lessen them. With technology advancing and investment in connected and autonomous vehicles and associated technologies growing, we are quickly moving far beyond the days when time behind the wheel represented wasted productivity.