Vorsprung durch Technik? The personal privacy challenge to Telematics

The car industry offers a powerful example of a market set to be transformed by clever use of people’s data – as long as it puts drivers in control, says Consentric’s J Cromack

The automotive industry is changing gear, thanks to the growing potential to capture and use rich data about vehicles, their performance and their environment in real time. Collected via a multitude of tiny sensors, relayed over continuous internet connections and interpreted using artificial intelligence, live data streams pave the way for the ultimate in automation: self-driving cars. But these ambitions should not overlook a critical assumption – that those at the wheel feel in control of their data privacy.

Telematics, as these car IT advances are collectively known, offers huge benefits to everyone along the automotive value chain. Car manufacturers gain an opportunity to monitor how their products are used, experienced and maintained out in the real world. Insurers can reduce their risk and provide more attractive and personalised policies as a result of better insights into the causes of accidents. Indeed, Deloitte predicts that in Europe digitally-enabled motor insurance could reach 17 per cent of all policies by 2020. Meanwhile, drivers receiving timely feedback about their car, or driving and road conditions, are less likely to have an accident, break down, get stuck in traffic or run out of fuel. If they have an insurance-linked telematics ‘black box’ or dash-cam, they’ll also be less vulnerable to bogus claims against them by other drivers.

The momentum for adopting telematics on an industry-wide scale is accelerating. Italy has pushed for carmakers to install and activate data trackers in new vehicles as part of measures to simplify accident investigations and settle insurance claims. Ernst & Young predicts that 88 per cent of all new cars globally will have integrated telematics by 2025.

But to get to a point where everyone can benefit, car companies and service partners need to gain the trust of drivers and regulators. In a world sensitive to privacy breaches and keenly on the side of consumer rights, there are some confidence issues to overcome.

Drive home the benefits

Measures to update legislation, including the EU General Data Protection Regulation (GDPR), California Consumer Privacy Act and others that will follow, have highlighted the delicate balance between the use of car and journey data for genuine benefit and the potential for misuse.

Research conducted in 2017 by the British Vehicle Rental & Leasing Association suggests that the vast majority of drivers (95 per cent) would happily share vehicle data if this might help diagnose or prevent faults. Similarly high percentages said the same about it being used to automatically alert a breakdown company (93 per cent) or help a manufacturer identify safety and warranty issues with its parts (82 per cent). But in situations where personal exposure felt higher yet the perceived benefits harder to determine, drivers were much less comfortable about agreeing to data being shared. Scenarios here included information about their driving behaviour and performance or their location.

The onus is therefore on car manufacturers, service partners and insurance companies to be completely transparent about their intentions. They must also empower drivers with sufficient options to control the data that is collected and how it is used. A 2016 survey among members of FIA Region I, a consumer body representing motorists in Europe, the Middle East and Africa, flagged up the need for restrictions including time limits on data being kept and used. But to feel completely reassured, drivers will also be looking for options to specify the types of information that can and can’t be collected and to assign specific permissions about who can access and use it for each documented purpose.

Respect personal boundaries

In a work context, GDPR’s parameters around keeping and using people’s data in legitimate and reasonable ways should prompt fleet managers to differentiate between company-relevant driver data and that which has no bearing on business use, for instance. Even if telematics ‘black boxes’ are set to record everything about every journey, this would restrict the information that can be stored and used. So information about mileage and fuel consumption may be kept, for example, but details about where a vehicle is parked outside of company hours should remain private.

It stands to reason that if the data people agree to share about their driving experiences results in something expected and beneficial – a smoother journey and avoidance of incident – they will relax and embrace it. But if they feel spied on, compromised or taken advantage of in some way – perhaps because their route has been captured and sold on to service stations and retailers who start to bombard them with promotions as they drive past or the wrong person discovers they have gone away because their car is parked at the airport – they will have every right to object. It’s this kind of activity that the My Car My Data campaign, championed by the FIA, is warning against.

The keys to winning over drivers to the brave new world of connected cars – as in any attempt to use personal data– is to hand them control. By providing transparency about data collection and use, clarity about what individuals will get back in return, and the ability to review and edit those parameters at any time, individuals will feel empowered to embrace positive change instead of feeling suspicious.