By: Matthew Jurgensmeier
In the modern economy, data is essential to survive. Whether used to improve products and processes or sold for a profit, data drives companies. While it might be understandable that social media platforms, such as Facebook, Instagram, Snapchat, and Google, make their money by allowing companies to target users with advertisements, how data is monetized in other contexts may be less clear. Social media and search-based businesses collect user data based on activity both on-and-off site and allow incredibly well-targeted consumer advertising. What consumers may be less aware of is that the information these platforms keep on users could pale in comparison to the data collected by modern vehicles.
What kind of data does my car collect?
Since the 1990s, many consumer vehicles have contained devices (Event Data Recorders, or EDR) to track information that is recorded when an “event,” such as a collision, occurs. This recorded data is not transmitted elsewhere but stays within the vehicle. Event data recorders are required to meet certain standards established by federal law. EDRs require specialized tools to physically access and are typically used by accident-reconstruction experts and car manufacturers to help determine the causes of vehicle malfunctions, or liability in litigation.
Unlike data collection via EDRs which requires a triggering event and whose data is physically kept in the vehicle, modern vehicles can collect a lot of information about the vehicle’s general usage. There is even a company centered around monetizing this vehicle usage data and providing services based on the collected information. The vehicle collects information including a driver’s GPS location; basic driving metrics such as acceleration, speed, braking patterns, fuel usage, and tire pressure; and non-essential information like what radio station a driver is listening to, the volume at a given time, and other in-car entertainment usage. If a user connects their cell phone to their car’s system, the amount of data acquired by the vehicle dramatically increases. A vehicle paired with a cell phone can store information regarding phone calls, text messages, cell phone usage, and voice commands.
Modern vehicle manufacturers collect data on people not only to improve their products, but also to use the data to profit. Given the complexity of sales contracts, consumers may not be aware what they are getting into. Without much leverage as an individual, consumers are bound by the terms of standard sales contracts. Despite warnings from Washington’s Attorney General, many consumers sign sales contracts that allow manufacturers to collect their data for safety or marketing purposes.
Who can use this data?
What purpose does this data serve?
Just like the social media and online search industries, the automotive industry’s revenue is likely to become increasingly data-based. McKinsey & Company produced a 60-page report regarding the monetization of car data. In this report, the firm estimated that car-generated data could become a $450 – $750 billion industry by 2030. Vehicle manufacturers could sell user data to advertisers or provide third-parties with valuable driving information. One of the more concerning possibilities, a user’s personal vehicle could become a surveillance tool just like a cell phone or video camera, tracking every mile a person drives and every stop they make. This data may be used to improve safety and improve the driver and passenger experiences, but there are plenty of privacy concerns that should be prioritized ahead of profits.