You may not think about it as you jump in the car to commute to work or run to the grocery store, but your car collects your personal data, meaning it actually knows a lot about you. Connected cars, or vehicles with Internet access, gather up to 25 GB of data every hour.
That might not seem like much, but 25 GB (25,000 MB) is the equivalent of streaming dozens of HD movies per hour. Cars with this data collection ability represented only about 20 percent of cars in 2016. But by 2020, three out of four vehicles sold will be "connected cars."
In older vehicles, data collection is conducted via smartphone, which can monitor your location and other activities. Newer cars record information, including the weight of the people in the front seats, whether the driver’s hands are on the wheel, and even the driver’s eye movements.
What does this say about the public and their interactions with cars and automakers? Increased connectivity may provide safety benefits, but is it fair to require people to give up their personal data for it? We polled 3,000 Americans to get their opinions on the matter, uncovering some shocking insights:
Americans aren’t willing to sacrifice their car data privacy, despite the potential benefits. However, in-car personal data collection is probably going to happen regardless of Americans’ preferences. So, what’s in store for the future of the transportation industry?
Would Americans trade their data for safety?
Fewer than 20 percent of Americans would allow monitoring of their location and driving habits, even if it meant making the road safer. This might seem like a small price to pay for increased safety, but the majority of people would rather their data stay private.
Even if sharing location and driving data led specifically to faster response times from first responders, shockingly few Americans — one in four — would consent to turning over their data. The same goes for alerts regarding dangerous driving conditions. Americans would take safety conditions and responses into their own hands before disclosing their personal car data.
Do Americans trust automakers?
An overwhelming majority — 80 percent — of those surveyed said they did not trust how automakers handled their personal data. Drivers are right to be wary: aside from those governing medical information, few regulations exist on what data can be collected and used by companies in the United States.
Drivers usually agree to data tracking and collection when they fill out user agreement forms for a system or service. Automakers can use these permissions to send your safe driving habits to car insurance companies, which can lower drivers' premiums.
It’s worth noting that most American automakers refrain from sharing the majority of personal data with third parties without the driver’s approval. Permission is typically required to share a driver’s location, health, or behavior with third parties, but it is not required for sharing data with emergency workers or using it for internal research.
You don’t own the personal data collected by automakers
As alluded to above, the United States has few laws to address automakers' data permissions from connected cars. It’s clear how this blurred line of data ownership can cause tensions between vehicle owners and automakers.
Without acknowledging who has legitimate ownership, who’s to say how and when the private data will be used? According to The New York Times, automakers are the primary collectors and owners of in-car personal data in most cases. Drivers do own crash data stored in their black box or event data recorder.
Connected cars plan to sell personal data
Aside from reporting to insurers, you may be wondering what automakers plan to do with this deep well of data. They’re going to sell it.
Selling data can yield profit margins in the range of 80 to 90 percent. The CEO of Otonomo, an automotive data services platform, says bundling and selling data from connected cars will provide automakers a substantial new revenue stream by 2020.
Automakers' trading data for money can have some positive side effects. Businesses use in-car data in more than 100 ways, including ride-sharing optimization, location-based discounts, and in-car marketing and payment programs. The overarching idea is to use consumers’ car data to enhance the driving experience while turning a profit.
Consumer data privacy fears beyond the transportation industry
The impact of personal data collection on consumer satisfaction extends past the transportation industry. When consumers feel that their information is being misused, they lose trust in a company, automotive or otherwise. Trust — or lack of it — between customers and businesses impacts purchasing behavior, no matter the quality of the product.
Consumers claim they won't buy products from companies they don't trust
According to a recent Harris Poll survey of 10,000 consumers, three out of four people refuse to buy products from a company they don’t trust to protect their data. These data-reliant businesses will need to expand their focus beyond product development and marketing strategy.
No matter how creative the advertisements or amazing the product, companies that neglect to secure customer data may struggle. Fostering trust between business and consumer can be done in several ways (transparent communication and generous policies, to name a couple), but ensuring safe handling of personal data is crucial.
Given that consumers claim to avoid companies they don’t trust and that an overwhelming majority of polled Americans said they don’t trust automakers, will we see a further decline in auto sales as connected cars emerge as the vehicles of the future?
Stay in touch and subscribe!
Get advice, insights and tips from our newsletter.
Success! Thank you for signing up for our newsletter
- 10 best cities for homeowners
- Texting and Driving Statistics
- Boomers vs. Millennials vs. Gen Z: How do different generations feel about electric cars?
- Study: 70% of new homeowners believe homeownership is part of the American Dream
- Homeownership Statistics
- Drunk Driving Statistics
- The 10 best cities for rideshare drivers in 2023
- Study: A single driving violation can increase your insurance rate up to 70%
- 10 best cities for new grads
- Best cities for managing student loan debt in 2023