How to profit from telematics driver data

How to profit from telematics driver data

Connected vehicles will generate tons of data on everything from automotive performance to driver behavior to the drain EVs will place on utility grids.
This is all valuable information that could be sold to multiple entities, providing market research, product improvement ideas, resource planning data, and even advertising opportunities.

Wireless telcos maintain robust subscriber databases, along with the infrastructure to handle tracking of and billing for usage of all kinds of services.
But they may prefer to play the role of enablers of telematics connectivity rather than adding this sector to their user databases. (For more on driver data, see ‘Should drivers have access to their diagnostics data?’.)

According to Tim Johnson, strategic opportunities manager/connected transportation and leader of Sprint’s Connected Transportation Initiative, Sprint aims to bring together the transportation, information, and energy industries, which have traditionally been separate.

“Sprint’s role is the information in the middle,” he says.

“Companies like us are suited to stand in the middle and tie together the needs of the other sectors, and then communicate the right information back to each of them.”

That does not mean Sprint will settle for being simply a data pipe.

The carrier is working with a suite of other partners in its initiative to develop what Johnson describes as a proactive offering.

Sprint has a force of more than 1,000 solution engineers who can act as the liaison between its customers’ backend systems and the vehicle, whether that customer is an auto maker or a utility or an application that sits somewhere between them.

Mining app data for revenue

Of course, no matter where data resides, as long as it’s moving, that means more revenue for network operators.

Application providers sit in a lucrative spot, having plenty of data aggregated from their services as well as the ability to mine it for useful information.

For example, Pay Technologies provides Starter Interrupt, a device that auto dealers can install in the cars of customers whose credit ratings make them more likely to default on paying loan installments.

The system includes a database that dealers use to keep track of devices in their cars; all that information also flows back into Pay Technologies’ back end.

“We can look at the dealer’s information in relationship to our universe of dealers,” says Jim Krueger, president of Pay Technologies.

“We show on the login page to every car dealer who uses our equipment what their ratios are in relationship to the rest of the universe as of midnight the night before. If they are having more or fewer cars shut off, that becomes obvious—and they may pose the question, ‘Why am I better or worse?’”

While the company does not provide other kinds of insight, Krueger says this is possible.

For example, it could use the demographic information on the total customer base to determine which were the best customers or which were highest risk.

Steve Hilton, a researcher with Analysys Mason, says the data could be hosted in Toyota’s data center or hosted by a wireless network operator, both of which have this kind of capability already well established.

On the other hand, while auto dealers would likely be willing to pay for information generated by infotainment or diagnostics gear in cars, there’s not an easy way to charge them for it.

“I don’t think dealers will invest in data bases and servers; they’re not that tech-savvy,” Hilton says.

“Is Toyota willing to invest in the platform and business intelligence to empower their dealers with the information?” (For more on data, dealers, and security, see ‘Telematics and security: Protecting the connected car’.)

Picking up the data tab

Steve Pazol, president of nPhase, a joint venture between Qualcomm and Verizon that combines technology and connectivity for mobile devices of all kinds, agrees that figuring out how to support the cost of managing databases of driver data is key.

While he’s seen many proposed business models, including advertising support for telematics apps, he points out that more and more telematics applications will be factory installed and rolled into the vehicle price, while maintaining data banks will get more and more expensive as they grow. (For more on apps, see ‘‘Telematics and connectivity: Which comes first, the app or the money?’ and ‘In-car telematics services: There’s an app for that’.)

Either the consumer or the OEM is paying for that factory install, he points out and, in the case of the OEMs, “it goes on their bill of materials for the modem. So I don’t know why they would let someone else house the data,” Pazol says.
“If it’s the OEMs, can they find other value in the data?”

Options might be aggregating that data and selling it to third parties, either for market research or for targeted advertising and/or infotainment content. (For more on telematics and ads, see ‘Can telematics make ads profitable in cars?’.)

As more electric vehicles with always-on connections get onto the road, this question will become even more important.

EV drivers will want to be able to not only find charging stations but reserve slots so they don’t get stuck waiting around or driving from one to another.

In fact, according to Hilton, nPhase might make sense as a potential host for this kind of telematics information that would span multiple providers. (For more on EVs, see ‘Telematics and EVs: Things to do while charging’ and ‘Telematics and EVs: Reducing “range anxiety”’.)

“There needs to be a service so that I can reserve my slot across the street from my office tomorrow,” says Pazol.

“But, what’s the business model? Maybe there’s room for a Sabre-type service that will go across all” charging station networks.

Susan Kuchinskas is a regular contributor to TU.

For more on telematics data, join the industry’s key players at Telematics Detroit 2011 on June 8 and 9 in Novi.

For more in the legal aspects of telematics data protection, check out Insurance Telematics Europe 2011 on May 4 and 5 in London.


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