DAVID SEDGWICK

The big question: Who really owns vehicle data?

COMMENTARY
David Sedgwick is a special correspondent for Automotive News
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There is big money in big data -- the information on location, driving habits and service needs that automakers are beginning to extract from autos.

According to a study released in February by Frost & Sullivan, vehicle data will generate $700 to $800 per vehicle in savings for automakers, vehicle owners, service providers and local governments.

That includes perks such as lower insurance rates for motorists, lower warranty costs, more aftersales revenue for dealerships, less gridlock, lower recall costs, etc.

That's a fair-sized pot of money, but naturally there's a catch. In order to offer all those benefits, automakers would analyze the flood of user data generated whenever a motorist drives his car.

If you think that's intrusive, you are correct. Most likely, car owners will be offered some perks, such as lower car insurance premiums, discounts at Starbucks and 50 percent off the next oil change

This is not a hypothetical exercise. Sixty percent of all automakers will establish their strategies to mine big data over the next two years, predicts Frost & Sullivan analyst Niranjan Manohar. But the larger question remains: Who owns a car's data?

This issue drew blood at the International CES in Las Vegas in January, when Jim Farley, Ford Motor Co.'s executive vice president of global marketing, sales and service and Lincoln, off-handedly discussed the uses and abuses of big data. "We know everyone who breaks the law," Farley quipped, according to an account in Business Insider. "We know when you're doing it. We have GPS in your car, so we know what you're doing. By the way, we don't supply that data to anyone."

Ford immediately issued a clarification, noting that it expunges vehicle data and does not track vehicle locations.

You can be sure that we haven't heard the last of this. Sen. Al Franken, D-Minn., has vowed to reintroduce a bill to require companies to obtain a car owner's consent before collecting a vehicle's location data.

My guess is that Congress will require automakers to get the car owner's consent, and that could happen right after the salesperson hands over the car keys. Yet another task for the F&I manager, eh?

You can reach David Sedgwick at dsedgwick@crain.com.


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