And no, this doesn’t mean V2X.
Couple of weeks ago I was at an event titled ‘Connected Cars in London - the key to a smart city?’, organized jointly by techUK and ITS UK, as part of London Tech Week. Along with a lively panel discussion and Q&A, the event was headlined by a wonderful keynote speech by Mark Cracknell from Zenzic. Mark’s deep experience in the intelligent transport sector shined through in his wonderful and thought provoking address. Among the various takeaways from his address, the key question that started this train of thought was Mark’s question about incentives: Is there a business model that’s good enough for participants in a ‘two-sided’ marketplace to invest in building interfaces and consume + offer connected vehicles data?
This is an age-old question, for which several companies, academic and industry bodies across the world have attempted solutions. The earliest smart city projects started back in the 90s and still continue in various shapes and forms in places like Ann Arbor, London, Nagoya, Lisbon…. The list just goes on. An honest assessment of many such initiatives for collaboration using vehicle connectivity data paints the picture of a road to nowhere.
It might be tempting to view this as a cold-start problem and look at solutions along those lines, but building business models using connected vehicles data is not just a user acquisition problem. Such a multi-faceted problem needs a multi-pronged solution - including regulatory pushes (like India’s AIS-140), successful pilots which actually make money to demonstrate product-market-fit and most importantly, efforts to reduce the cost of bringing network participants onboard. The key for solving the last problem is having data interface standards for sharing connected vehicles data.
Specifically, it is quite important to have a standard way of sharing context-layered vehicle data which any developer can consume and use it to build software workflows. Note that there is no dearth of standards for in-vehicle networks and network of devices, things and other vehicles. But once the vehicle data is aggregated it is pretty much a free-for all. Any serious business needs to invest in multiple point-to-point integrations to even consider monetization of vehicle data. For example, if an insurance provider wants to offer pay-as-you-go insurance, they either need to invest in their own connectivity dongle (which may not work on all vehicles), or they need to build separate integrations with each OEM’s connected vehicles endpoint. Hence it is imperative to come up with an industry standard for exchanging contextual connected vehicle data, in a secure, authorized and auditable manner.
Let me clarify what I mean by contextual connected vehicles data: While current standards efforts deal with how to pull vehicle sensor data from the car, what makes this data an economic unit of transaction is the context - which will be the user, the car’s location, the user’s subscriptions etc. Car data layered with this context instantly becomes powerful and forms the currency of transactions between interested parties, which forms the undergrowth that powers the forest of data enabled network businesses. The L1 taxonomy of such an integrations standard can be made of the following:
Customer information (customer identifiers, emergency contact info., federated login credentials etc.)
Driver information (optional)
Vehicle current state (including VIN, current location, current fuel levels, current critical sensor levels etc.)
Payment information (including digital wallets etc.)
Active subscriptions (media, rewards programs, retail, etc.)
Driving history
Home dealer information
Personalization settings (like preferred HVAC settings, offline navigation routes, home/work/favorite waypoints etc.)
The above taxonomy can be easily expanded (horizontally and vertically), but imagine a widely accepted industry standard which not only contains data specifications for all of these categories of information, but also specifies implementation methodology including authentication, encryption, consent management, data retention policies, fair usage policies. Such standard would enable everyone - insurers, fleet providers, mobility companies, governments, OEMs, workshops, dealerships, telecom companies, media networks, advertisers, content providers, logistics companies, charging & parking infrastructure companies, fintech companies and so on - to confidently build software and services around this data, confident that once an offering has product market fit, scaling that offering would be a simple effort of go-to-market, and would be agnostic of OEM/hardware/geography. Such standards will also abstract complexities on data definition, taxonomy, metrics and would recommend best-in-class implementations for integration methodology and service levels (like data sync frequency etc.). Such standards can only happen when the industry at large comes together with regulatory agencies and focuses on building such standards aimed at commercializing vehicle data. It would also not be a stretch to even invest in shared assets like testing infrastructure, certification processes and even common services which handle things like purpose limitation, audits and compliance.
The most successful example of such an industry level integration standard is the Standards for Technology in Automotive Retail (STAR). Brought to life in 2001 by a consortium of OEMs, software companies and other participants, STAR offers a standard mechanism to exchange automotive retail data (including inventory, CRM leads, parts orders, credit information and so on). STAR takes away onboarding friction for any company which wants to build applications for the automotive retail market and helps them scale agnostic of OEM and DMS providers. There are several other industry level standards which were simply defined by nominated professionals from leading organizations who voluntarily came together and created professional bodies and iterated upon creating interface standards. A similar concerted effort is needed from participants in the connected car data industry to come together and arrive at interoperability standards, which will jump-start economic activity in this sector.