A wave of ‘Big Data’ is coming to the vehicle industry

By Thomas D. DeMatteo

We have all heard or seen phrases like “Big Data,” the “Internet of Things,” “V2V,” “AVs,” and “Petabytes.” So let’s get some perspective as to what this new nomenclature means to the vehicle industry.

By 2020, only two and a half years from now, 75 percent of all cars shipped globally will be able to connect to the Internet to provide entertainment, diagnostics, navigation, software updates and potentially V2V (vehicle-to-vehicle) communications, according to Technology Now.

The amount of data that will be accumulated is staggering. One autonomous vehicle (AV) will generate 1 gigabyte of data per second or 2 petabytes per vehicle per year.

For context, an estimate of all of the data in all of the academic research libraries in the United States totals 2 petabytes.

McKinsey & Co. researchers suggest that Big Data could be a $750 billion business by 2030.

Big Data will be used in the following ways: to generate revenue through direct monetization by selling products, features or services to customers, including tailored advertising and selling data; to reduce costs by gathering field data for research and development and by analyzing usage patterns, repair and downtime; and to increase safety and security by collecting collision avoidance data and forwarding warnings in real time.

However, when looking at value created by Big Data, the question becomes, for whom is it creating value, the manufacturer or the consumer?

McKinsey researchers provide some guidelines to ethically handle consumer information:

  • Never use data against your customers, but rather in their service. Frequency of interaction is critical, as customers do not want to be stressed by continuous questions or propositions.
  • Provide clarity and education on what kinds of data are to be used, why and how (e.g., anonymized vs. personalized), with a simple experience in the “terms and conditions” acceptance.
  • Do not misuse and do not allow potential third parties to misuse data.
  • Aggressively promote data security and respect of privacy, and be clear on “legal aspects.”
  • Give customers the choice of what to share and what not to share and for which purposes (i.e., customers need to be in control of their own data); periodically remind customers that they can revise the parameters of data sharing.
  • Make gathered data available to customers.

At some point, we should all be asking who owns the data captured by the vehicles and the downstream and upstream networks that feed the system.

On a recent road trip with my vehicle, I always entered “find nearest Starbucks locations.” It won’t be long before I see Starbucks pop-up ads on my dashboard monitor as BMW and Starbucks mine Big Data.

Thomas D. DeMatteo is chief legal officer, general counsel and secretary at ABC Companies. He can be reached at TDeMatteo@abc-companies.com.

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