Susan Kuchinskas explores what it will take to turn the wealth of telematics information into profitable data
The list of telematics solutions for transportation keeps expanding. When passenger cars, fleets, roadways, toll booths, smart electric grids, etc. etc. begin to talk to each other via vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2X) communications, the amount of data generated will be exponentially greater than it is today.
Telematics solutions providers can deliver a wealth of information, but how do companies turn this into profitable insight?
"There's been a thriving business in the last few years for traffic information," says Richard Bishop, principal of Bishop Consulting. "Cars are everywhere, and if they generate data either on the cellular network or on DSRC, that data could be available."
If V2V communications for safety become mandated and/or standardized, he points out, the amount of data will grow dramatically. Beyond general basic safety data that might be mandated, such as cars broadcasting their locations to others in their proximity, it will be up to automakers whether they want to design cars or trucks to communicate things like the outside temperature or windshield wiper status.
Those pieces of information could be mined for real-time updates on road conditions, weather and traffic, Bishop says. (For more on telematics and data, see Telematics: Delivering data that drivers want and Telematics and the connected car: How to deal with increasing data use.)
Selling roadway data
Who would install, pay for, monitor and ultimately sell the resultant information is difficult to predict at this point, Bishop says: "Some companies might want to invest in roadside readers, or maybe the public sector will have some degree of readers. Maybe they sell their information to the traffic service providers."
That's already being done for many major roadways, of course, but when DSRC-equipped cars are ubiquitous, the same kind of information could be generated for less traveled thoroughfares. "If I'm the customer," Bishop says, "I want to know whether there's a crash in front of me, on my road and on my trip."
Selling roadway data could be a moneymaker for companies that are willing to make the capital investment in installing intelligent traffic systems or some components thereof.
The Michigan Dept. of Transportation (MDOT) is arguably the most advanced state when it comes to ITS, thanks to its system of traffic cams, dynamic message signs, microwave vehicle detection systems and integrated software system connecting it all—to say nothing of its hosting of the upcoming safety pilot model deployment.
Steven J. Cook, operations and maintenance engineer for MDOT, says his department is still working on the question of, once data is captured, what do you do with it? He has given some thought to selling the data someday, but it seems more likely that MDOT might buy it instead.
"In the future, I don't see government agencies like ours being data collectors," Cook says. "We will let industry determine what devices they need to collect data. They will backhaul it, store it and manage it. We will say, 'We need road surface data on this road. We want to know where the stress is, so we can plan it and design the road based on those data sets. We will become more data users as opposed to collectors and managers."
Navteq, TomTom and Inrix already have much of this infrastructure in place, and, in fact, MDOT has a contract with Navteq to collect relevant data and post it to the digital signage system. Beyond basic safety and traffic messages, Cook says that his group still is trying to flesh out what kinds of data-based applications might be most useful.
More is less
More data is not necessarily more useful, according to Richard Wallace, director of Transportation Systems Analysis at the Center for Automotive Research. Even for real-time traffic information, he estimates that a mere 7 percent of total traffic volume will provide plenty of coverage on major roadways.
Another example is the constant pinging from car to car in V2V safety systems that may include location, heading, speed and time of day.
"Most of that, you don't need to keep," Wallace says. "You can probably throw away 99 percent of that a day later." When it comes to data on pavement quality, all you need is "one car a month. It's not like it deteriorates overnight."
Wallace says there will be some trading of data among various departments of transportation but there's probably not a need for a national data clearinghouse: "Do Arizona and Virginia need to exchange data? Probably not. But Michigan would want to exchange data on truck traffic with Wisconsin."
Who are the data brokers?
Ideally, the whole transportation industry could rely on one or two data brokers; unfortunately, no logical data broker has emerged, according to Scott J. McCormick, president of the Connected Vehicle Trade Association. "There are two areas of opportunity that there are no logical owners for," McCormick says. "First, who is the portal for apps? Then, who is data broker? We don't know."
The Connected Vehicle Trade Association has considered companies like Google, Yahoo and Apple, companies with the ability to store, analyze and profit from huge amounts of data. But they don't seem to be interested.
Looking further at the players, McCormick says, "Telecoms might be interested, but they already have a part of this ecosystem. Whether the connection is wifi or cellular, they will make a dime. Automakers are not interested because they have not been given a mechanism to monetize it. They sell hardware, not services."
McCormick and others think that ownership of the car's data could be a tricky area, sparking consumer outrage, despite the lack of public outcry against companies like Google making billions off their behavior online.
Says Wallace, "I don’t see the automakers being that involved in the data side. They'll want some involvement because of vehicle diagnostics and prognostics and CRM, but who owns the data? I'm driving my car; I don't want to hear the auto companies telling me they're entitled to it. I bought the car. If you want the data, pay up."
Susan Kuchinskas is a regular contributor to TU.
For more all the latest telematics trends, check out 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.