Telematics, as it applies to the automotive industry and defined in Wikipedia, most often refers to the “convergence of telecommunications and information processing.” Beginning with hands-free calling and screen-based navigation systems, the field of telematics has grown rapidly.
Today, it’s possible to turn your smart phone into a key fob, scan tool, and even use it to summon your car from its parking space (take a look at the video of Audi’s demonstration of this technology at the 2013 Consumer Electronics Show if you don’t believe me. t’s posted in the AutoPro Workshop.). But is this technology helpful or is it a hindrance? What will the impact of this technology be on your business, besides understanding it well enough to fix it?
Get A Fix On Me
Let’s start this discussion with one element we are all familiar with: navigation systems. When the military opened the Global Positioning System (GPS) to the public, the aftermarket and OEMs alike were quick to recognize the benefits of in-car navigational capability. Certainly, being able to plug in your starting point and destination and then following the onscreen prompts made finding one’s way around a strange town much easier than trying to read a paper map.
The Delphi Connected Car system evens the playing field between the OEM dealer and the independent shop owner.
It didn’t take long to expand the use of onboard GPS. GM’s OnStar is one example. General Motors established OnStar in 1995 with cooperation from Hughes Electronics and Electronic Data Systems, and the first OnStar units were made available in several Cadillac models for the 1997 model year. Each OnStar system that’s installed as original equipment is capable of gathering data from both the on-board diagnostics (OBDII) system and built-in GPS functionality. Add in the ability to transmit and receive voice and data communications over a Code Division Multiple Access (CDMA) cellular network, and now you have the capability to offer a suite of services to the subscribing owner. Some examples of the services available through the OnStar system include turn-by-turn navigation assistance, automatic crash response, and roadside assistance. And it’s all accessible with the press of a button (and a subscription).
Combining onboard diagnostics, GPS and the ability to connect that data to a cellular network has created a multitude of options for consumer and automaker alike. Just consider some of the benefits that have resulted from this union. If your car has been stolen, it can tell the monitoring service where it is. Some applications can transmit this information directly to your smart phone. Accident response modes have improved, with some OEM systems automatically initiating a 911 call, turning on the vehicle’s hazard lights and reporting your position if an air bag deployment is recorded.
The Delphi unit connects to the DLC and provides a secure “car to cloud, cloud to car” connection.
Are you a parent with teenaged drivers? Some manufacturers offer varying levels of parental controls that can be programmed by the vehicle owner. Limit the top speed of the car to prevent your young driver from going to fast, set volume limits on the audio system to keep them focused on the task at hand and not the latest Miley Cyrus hit, even set up “geo-fences,” or boundaries, that will send your smart phone an alert should your child stray to far.
Do you use your car or truck for business? Now it’s possible to have WiFi right in the front seat, allowing businesses of all types to conduct business on location. It can also keep the kids happy by allowing them to search the web on those long trips and opens up media options that not too long ago were only available at home. The big cellular providers, Verizon and AT&T, both have deals with automakers to supply the 4G connectivity. In addition, Verizon offers its customers Delphi Connect, a program that offers anyone with an OBDII-compliant vehicle all the bells and whistles we’ve talked about so far. Imagine turning your smartphone into your key fob, being able to check your vehicle’s health from your sofa, or knowing where your car is 24/7?
Even Google is getting into the telematics arena, recently announcing its partnership with five automakers to develop an Android-based operating system for automotive applications.
Telematics is the convergence of telecommunications and information processing, providing for numerous owner services like accident response, vehicle theft location and more.
Going forward into the not-so-distant future, autonomous driving will rely on telematics. If you’ve got grandkids of elementary school age or younger, odds are when it comes time for them to learn how to drive they won’t have to. All they’ll need to do is get in and tell the car where they want to go.
Who Else Is Looking?
Of course, while there are very real benefits to telematics to the owner, there are also benefits to third parties. One that you’ll immediately recognize is Progressive Insurance’s “Smart Insurance” program utilizing a plug and play device that plugs directly into your OBDII Diagnostic Link Connector (DLC). The device, introduced way back in 1998 and called “Snapshot,” sends information about your driving habits directly to the insurer in real time. Mileage driven, braking habits, and other data is used to determine how safe a driver you are and is promoted as offering consumers the opportunity to get a better rate in the process.
In 2012, Progressive reports it wrote more than $1 billion in premium revenue related to the Smart Insurance program and they forecast that, by 2020, more than 25 percent of the entire U.S. auto insurance premium revenues will be generated by telematics and User Based Insurance (UBI) policies.
What, exactly, are UBIs? There are two models for UBI found globally; Pay As You Drive (PAYD) and Pay How You Drive (PHYD).
The PAYD model is attractive to drivers who don’t drive that much. A plug and play device (similar to the Snapshot) with GPS capability is used to monitor how far you drive and a menu of “pay as you go” plans are offered. But the drawback to this UBI is that it doesn’t take into account driver habits. Bad drivers pay the same rates, at least initially, as good ones do.
Progressive was one of the first insurers to use telematics to monitor policy holder driving habits.
PHYD, on the other hand, records a multitude of factors related to driving habits like location, speed, cornering force, braking force and even how frequently you change lanes. The insurance industry believes that this type of information will encourage bad drivers to improve their skills. State Farm, for example, includes a driver feedback application that helps their customers to monitor their driving habits based on three parameters; acceleration, braking and cornering.
Companies today offering some form of UBI include Progressive (Snapshot), Nationwide (SmartRIDE), Allstate (Drivewise), and State Farm. Others are looking hard at UBI and some have announced plans to enter the market within the next few years.
And you know that if auto insurance companies are intrigued about the use of telematics, so are their arch enemies — the personal injury attorneys. Under most insurers’ policies, the insurance company retains ownership of both the telematics device and the data recorded. This does not prevent savvy attorneys from requesting that data to use in their client’s defense or favor. It also opens up a whole new potential career field — telematics data expert — at least until there is a standard format for the saved information.
The Negatives
Certainly, having your location tracked and reported over the cellular airwaves is an invitation to tracking by anyone else that can hack into that signal. And it’s not just hackers we may need to be concerned with. Recently, the U.S. Government Accountability Office (GAO) looked into data farming practices at General Motors, Ford, Chrysler, Toyota, Honda and Nissan. It also took a look at practices at two of the countries largest GPS manufacturers, Garmin and TomTom.
The report found that the automakers collect data at times to assist drivers with traffic updates, roadside assistance and to track stolen vehicles but did not find evidence that they are selling the data they are collecting. However, the report stated that motorists were not informed as to what type of information was being collected nor did they have the ability to opt-out of the data collection systems.
Further, the report states that companies “can track where consumers are, which can in turn be used to steal their identity, stalk them or monitor them without their knowledge. In addition, location data can be used to infer other sensitive information about individuals such as their religious affiliation or political activities."
The future is not that far away. Total connectivity and autonomous driving could mean you can play your favorite video game or work on that upcoming presentation while you commute to work.
Minnesota Sen. Al Franken, chair of a Judiciary subcommittee on privacy, requested the report. In a statement, Franken says, “Modern technology now allows drivers to get turn-by-turn directions in a matter of seconds, but our privacy laws haven't kept pace with these enormous advances. Companies providing in-car location services are taking their customers' privacy seriously — but this report shows that Minnesotans and people across the country need much more information about how the data are being collected, what they're being used for, and how they're being shared with third parties.”
Other distractors of telematics involving a vehicle’s GPS position and OBDII link suggest that talented hackers could use the technology to directly interfere with the car’s systems by sending commands to the onboard computers via the data connection provided by the telematics device. Consider finding yourself in a car that suddenly stalls or accelerates, seemingly all by itself. Now multiply that by thousands at the same time. Paranoid? Maybe, but the scenario is a possibility that cannot be overlooked.
Another potential issue with the connected car is driver distraction. We’ve all seen it and many of us are guilty of it — talking on our phones or worse, reading and responding to text messages. In a recent Society of Automotive Engineers (SAE) article, author Paul Weissler reports that automakers are well aware of the distractive nature of these habits but shares that they are also exploring what they call “cognitive overload.” Research performed by the American Automobile Association (AAA) and the University of Utah seem to suggest that the effort needed to focus on a phone conversation, even if hands-free, or the interaction with other connected services is still sufficient to reduce the driver’s ability to recognize and react to visual clues they should be paying their full attention to.
A Massachusetts Intitute of Technology (MIT) study funded by Toyota found that driver personality may also play a role, finding that drivers who regularly use smart phones and telematics tend to drive faster and change lanes more frequently than drivers who don’t, even if they didn’t have their cell phones with them.
Benefitting Your Business
Another benefit owners enjoy with their OEM telematics is the vehicle health report they can provide. Depth of information varies, but if a code has triggered the Check Engine light, the onboard system can pass the information on to the owner via text, email or as an app downloaded to his or her phone. In addition to notifying them of the problem, the program often locates the nearest dealer and will provide directions to the dealership and provide contact information for making a service appointment.
This gives dealers a competitive advantage on top of the extended factory warranties and routine maintenance for the first two to three years they already offer. But it is one you can compete with.
Turn your smartphone into a key fob? VW’s Car-Net can do that and a lot more.
Remember the Delphi Connect program I mentioned that Verizon offers? The program won the 2013 Aftermarket Telematics Challenge awarded by the Automotive Aftermarket Industry Association (AAIA). According to the press release, consumers respond favorably to maintenance reminders that are delivered by the vehicle itself. The Delphi Connect plug in provides a secure “car to cloud, cloud to car” data link accessible by the user via his desktop, tablet or smart phone. While first marketed directly to the consumer via the Verizon program, Delphi originally envisioned a total service solution that would help independent shops compete with the OEMs.
In this program, the shop would sell, lease, or give the plug ins to their customers. Service data would be monitored and in the event a problem is noted (code set, battery voltage low, etc.), the shop would be notified the same time the owner was. You would be able to immediately advise them if the problem required immediate attention or could wait, and then set a service appointment for them. The same app on your end would assist you in diagnosing the fault, perhaps even allowing you to order the parts needed via the Delphi catalog also included in your app. You could also use the connectivity to send maintenance reminders, appointment confirmations and thank you notes, all automatically as you establish in the program.
In May 2013, Auto-Wares Group of Companies announced the launch of an aftermarket telematics system that utilizes Delphi Connected Car technology.
The telematics system allows Auto-Wares to “talk” with car owners and assist costumers with a variety of services, including remote vehicle diagnostics, roadside assistance, service and maintenance and vehicle health monitoring benefits.
“By offering telematics to our more than 1,000 parts stores and certified service centers throughout Michigan, Illinois, Ohio, Wisconsin and Indiana, we are positioning Auto-Wares to better serve our network, fleet customers and consumers,” said Fred Bunting, CEO, Auto-Wares Group of Companies. “This technology will build strong value for our network by supporting our shops with marketing and part sourcing. In turn, they are assisting their customers with remote vehicle diagnostics, and other service and maintenance benefits.”
To see a Motor Age video presentation with Delphi on their connected car solution, visit the AutoPro Workshop and search “The Connected Car and You.” We guarantee you won’t look at your car or your smartphone the same way ever again.
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