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Data mining: A second act for telematics systems?

An onboard cellular connection brings a host of services into the car, but it also opens the door for privacy concerns.

By Douglas Newcomb Dec 10, 2012 7:01AM

Mercedes-Benz mbrace2. Photo my Mercedes-Benz.About five years ago, telematics systems such as OnStar seemed to be on the wane. The General Motors subsidiary had been the dominant player as well as the pioneer in telematics since launching in 1996. It provided the system to all GM car brands and private-labeled it for Acura, Audi, Isuzu, Subaru and Volkswagen.

When GM decided to make OnStar exclusive in 2006 and wind down its licensing deals with other automakers, it seemed to be the beginning of the end for telematics systems. But in the past few years, both luxury and mainstream automakers have introduced new and similar subscription-based systems. They all offer core telematics features such as automatic crash notification and convenience services such as door unlocking. With the advent of smartphones, the latest wrinkle is providing remote services such as locating the car or locking the doors using an application.


Almost all telematics systems use an embedded cellular modem to allow automakers to connect to the car to keep tabs on drivers to deliver emergency and convenience services. But as great as it sounds, such systems could could also allow third-party service providers to keep tabs on drivers’ locations -- and their usage in everything from Internet-connected navigation searches to online entertainment choices.

As we’ve seen with Google and Facebook, access to such data can be worth a fortune. But that’s if users -- in this case, car owners -- opt in and see a benefit from sharing such data.

“Increasingly, the thought process possessing the auto industry is that the collection of driver data will serve as a Big Data platform for everything from insurance-related applications to marketing/advertising propositions,” Roger Lanctot, an automotive industry analyst at Strategy Analytics, told MSN Autos. “It’s still the early days in gathering data from drivers, so the backlash has been fairly modest.

Lanctot said that the opt-in process at the dealership during the vehicle delivery “is fairly opaque” on many levels. Consumers may not fully comprehend what data are being collected, and service providers may not understand what can be done with the data and how to convey to consumers how an opt-in is disclosed and managed, he said.

OnStar has already been burned on mining data without the car owner’s consent after it was revealed last year that the company was gathering data from cars even after the driver’s subscription to the service had lapsed. After an outcry from consumers, privacy advocates and government officials, the company changed its policy.

While the prospect of being tracked can be unsettling, there are real benefits. If you use online services such as Google and Facebook, you’re already familiar with what some of those are.

“The challenge for the auto industry is to walk a fine line between delivering a value proposition to customers in such a manner that drivers will be willing participants,” Lanctot said. “There are huge societal benefits, such as reduced congestion and pollution and enhanced safety, that could potentially be undermined by consumers not wanting to share their data due to abuses."

If drivers are trading data for services, Lanctot predicts that telematics subscriptions could become a thing of the past. “The idea is to build the cost of embedded connectivity into the cost of the car and eventually add the car to existing wireless plans so the car is simply another node.”

As with the rest of our connected lives, the question for consumers will be how much personal information they're willing to give up in return for a better driving experience.

Doug Newcomb
has been covering car technology for more than 20 years for outlets ranging from Rolling Stone to In 2008, he published his first book, "Car Audio for Dummies" (Wiley). He lives and drives in Hood River, Ore., with his wife and two kids, who share his passion for cars and car technology, especially driving and listening to music.
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