Automakers and tech companies should not be allowed to collect data and sell it to advertisers or third parties.
Eighty-three percent of consumers participating in a recent survey from Autolist.com believe that. Seventy percent of respondents say vehicle owners should be in control of and own the data their vehicle generates.
Autolist.com editor in chief David Undercoffler said in an interview with Auto Remarketing that with technology news such as Apple’s expansion of facial recognition features in its products, his company wanted to see how that affected the auto industry and “how top of mind is it for car consumers.”
“Then we get the results back, and it’s pretty dramatic,” Undercoffler said. “It’s clear that just as much as it’s a hot topic in other industries, it is very much one in cars, even though … it does seem like it’s sort of the early days of dealing with data and privacy in automobiles. I don’t think a majority of consumers are really thinking of the role privacy and data are playing in our cars yet.”
But consumers who weighed in on the issue for the Autolist survey made their views known. Of the 30% of respondents who didn’t answer “vehicle owners” on the question of who should control and own their vehicle’s data, 10% said the dealer should control it, and 9% said a service center should control it. Eight percent of respondents said the automaker should control their vehicle’s data, and 3% said a third-party tech company should control it.
Another survey question covered consumers’ opinions about how lawmakers should handle the issue. Although no federal U.S. laws currently govern vehicles’ collection or sale of consumers’ data, California passed the California Consumer Privacy Act, which Autolist.com says governs the collection and sale of consumer data, and that includes data from vehicles. Autolist.com said the law, set to go into effect in 2020, is considered the strictest privacy law in the country for consumers.
But consumers are frustrated with lawmakers’ inaction on this issue, according to the survey. Only 8% of respondents said legislators were aware of the issue and were doing enough about it. Fifty-three percent of consumers said lawmakers were either aware of the issue but not doing enough or were completely unaware of the issue. Thirty-nine percent were not sure.
For the Autolist survey, 1,430 people participated in June.
Many of those consumers want the federal government to have responsibility for mandating data security, according to the survey. Forty-six percent said the federal government and Congress should govern what data is collected and what companies are allowed to do with it. Twenty-two percent said that should be up to automakers, as is the case today. Eighteen percent said the states should be responsible, 8% said local jurisdictions should take responsibility, and 6 percent the tech companies themselves should be responsible.
Automakers are taking the issue seriously. Ryan Bachman, senior vice president and global chief information security officer for GM Financial, said in a recent Auto Remarketing article that dealers regularly contact his company with questions about cybersecurity and customer privacy, asking how they can safeguard data. The company provides information, guidance and tips to its dealer customers in that area.
“They will reach out to us and ask us questions on things that they can do to resolve the incident, mitigate the incident or whatever it may be,” Bachman said. “So, we do make ourselves available to try to assist our dealers in any way we can because we both have a mutual interest in ensuring that our customers have a positive interaction with us both with the dealers as well as within our products.”
Although Undercoffler said he didn’t think consumer awareness of data privacy in cars is high, he thinks that with every new model-year of vehicle, those vehicles are gathering more data “and giving automakers a juicier and juicier opportunity to do something with that data. I think as that awareness expands on the automakers’ part, it also is going to continue expanding on the consumers’ part.”
Undercoffler said he feels the California Consumer Privacy Act is just the beginning of a trend that many additional states will adopt. As consumer awareness grows, lawmakers will feel pressure to enact a federal law.
“Our country has a lot of things on our plate right now, but I would imagine within four to five years, when more consumers are buying vehicles that are doing more with their data, I think this is the thing that they’re talking to their legislators about: ‘We need to govern this.’ ‘We need to regulate this,’” Undercoffler said.
Autolist’s survey also covered insurance companies’ tracking devices that plug into a vehicle’s OBD-II port and allow the monitoring of driver behavior. For drivers who are deemed safe, the insurance company offers discounts. People who use a third-party insurance tracking device are more comfortable with an automaker or other company selling their data, according to the survey.
Nineteen percent of people who use and enjoy an OBD-II insurance tracker device support the sale of their data to advertisers or other third parties, according to the survey. But for those who didn’t use a tracker, only 9% supported the sale of this data.
The Autolist survey also covered data as a profit generator. Autolist sourced a 2016 McKinsey & Company report showing that by 2030, data that connected cars generate could bring in between $450 billion and $750 billion.
New vehicle sales are in decline. When you add to that the factor the slimmer profit margins on those vehicles and major research and development costs as the industry shifts toward electrification, “the allure of data as a profit generator is hard to ignore,” Autolist said.
Ford, General Motors, Hyundai, Jaguar Land Rover and other brands already gather and sell consumer data, Autolist said. Sourcing a report from KPMG, Autolist said more than 80 percent of auto industry executives see data as a primary future source of income.
Look for this issue to continue to grow for consumers and legislators, Undercoffler said.
“I would definitely look out for this to be a growing topic within the regulation of that data, because there’s no going back,” he said. “The genie is out of the bottle; we’re not putting it back in. So our cars are just collecting more and more data on us and …it’s sort of an irreversible trend.”