Telematics and probe data: The revenue opportunities

Telematics and probe data: The revenue opportunities

If you could pinpoint traffic congestion, you’d use that information to change the time you’d leave, the route you’d take, or whether you’d even want to make the trip at all. That’s the power of probe data, which can be collected from monitoring moving (or gridlocked) vehicles using cell phones, GPS systems and tollbooths. As mobile devices become more common in cars, telematics players are trying to repackage this data and sell it back to consumers and the transportation industry.

Real-time traffic services for telematics and navigation are expected to reach $4.7 billion worldwide in 2014, up from $268 million in 2008, according to industry researcher iSuppli. The number of global subscribers for these services is expected to rise tenfold during the same period, reaching 184.9 million in 2014.

Meanwhile, the US public sector is trying to improve the safety of roads with the development of Dedicated Short Range Communications (DSRC). The technology allows high-speed wireless communication between vehicles and infrastructure, similar to WiFi. Industry experts say the technology could potentially have implications for probe data, but its money-making capabilities are yet to be seen because full implementation is years away. (For more on vehicle-to-vehicle and vehicle-to-infrastructure communication, see V2X telematics: Taking ADAS to the next level and V2X telematics: From testing to tipping point.)

Relieving traffic congestion

But probe data is only part of the solution for relieving traffic congestion issues. It has limitations, such as information on traffic density. Density is important for pinpointing where flow breaks down and when traffic jams start. Not every car has a probe and perhaps those few probe vehicles don’t travel like average cars, says James Misener, executive advisor at Booz Allen Hamilton. “Probe data is not yet the panacea,” Misener says. “Unless every vehicle was a probe, there could be sampling error.” 

The University of Maryland’s Center for Advanced Transportation Technology (CATT) has built a series of tools using probe data to relieve congestion. From analyzing travel time to identifying congestion trends, these Web-based tools can help planners understand congestion and target strategies for alleviating congestion. The center also has a system that combines probe data with other incident data to help transportation operators identify incidents quickly, thus helping to promptly clear roadways. 

About half of the congestion on US roadways is caused by non-recurring events, according to the Federal Highway Administration, so clearing these temporary disruptions is key to keeping cars moving. For example, about 10 percent of congestion is caused by work zones and another 15 percent by adverse weather.

The CATT Laboratory currently has about 400 users from about 40 agencies involved in its Vehicle Probe Project, and another 800 users in its Regional Integrated Transportation Information System (RITIS), says Michael Pack, director of the laboratory. “Only about 40 percent of our users are DOTs,” Pack says. “The rest are fire, rescue, traveler info, etc. So, probe data most certainly has real value that people are willing to pay for, both the private sector and public sector.”

Limited marketing applications

Probe data is likely to stay in the traffic-information arena. It has limited money-making abilities in other applications. For example, it isn’t likely to make an impact in tailored marketing. Probe data is collected from two-way signals, such as cell phones, and the data contains information such as time and location stamps. The system doesn’t transmit the first and last parts of the trip, making this anonymous information even less useful for potential marketing applications. A data user wouldn’t be able to tell, for example, which shopping center a car came from and which driveway it drove to.

Most businesses making money from probe data are those re-packaging the probe messages as usable traffic information. Cell-phone location data is owned by cellular carriers, who sell it to private concerns, who in turn sell aggregated data to traffic services or to governments. Governments also can collect the data with roadside infrastructure, though this varies by jurisdiction.

One of the more progressive systems is that of the Metropolitan Transportation Commission, the nine-county regional transportation authority in the San Francisco Bay Area. The commission provides data for free to value-added re-packagers. “If you’re a re-packager or, perhaps better yet, if you strike a deal with the wireless carrier, you may have a viable model,” Misener says. “You also have many competitors. It’s an interesting and crowded business.”

Is DSRC the answer?

Some in that crowded market may be waiting to see what happens with DSRC, a 75MHz of spectrum in 5.9 GHz range allocated by the Federal Communications Commission to provide vehicle-to-vehicle and vehicle-to-infrastructure communications for public safety. The band can also be used for commercial or private DSRC operations. DSRC could be used to collect probe data, Misener says, keeping in mind that DSRC has “short range” in its name.

“That range is designed to be about 300 meters,” he says. “So to have an effective, ubiquitous DSRC-based system to accomplish the ‘all times and all places’ goal of probe data would mean many, many roadside stations to collect this data. DSRC is not the answer, unless DSRC is for some reason widely deployed for other reasons, such as for tolling or for the real prize: safety.”

Richard Bishop, owner of Bishop Consulting, a Maryland-based consultancy for intelligent transportation systems, says probe data and DSRC are mostly government issues and, together, they aren’t likely to offer much in the way of monetization. “But DSRC isn’t even out there yet, so it’s too early to tell,” Bishop says.

In its simplest terms, DSRC is just a communications platform, Pack says: “It's the applications that can come out of it—vehicle to vehicle, vehicle to infrastructure, safety applications, tolling applications, consumer payment, consumer behavior—that could ultimately profit or be seen as valuable to both industry and the public sector.” 

Stephanie Flores is a regular contributor to TU.

For more all the latest telematics trends, visit V2X Safety & Mobility 2012 USA on March 20-21 in Novi, MI, Telematics for Fleet Management Europe 2012 on March 26-27 in Amsterdam, Content & Apps for Automotive 2012 on April 18-19 in Germany, Insurance Telematics Europe 2012 on May 9-10 in London, Telematics Detroit 2012 on June 6-7, and Insurance Telematics USA 2012 in September in Chicago.

For exclusive telematics business analysis and insight, check out TU’s reports on In-Vehicle Smartphone Integration Report, Human Machine Interface Technologies and Smart Vehicle Technology: The Future of Insurance Telematics.

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