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3 May 2019

Jaguar Land Rover using free money to extract auto data from drivers

So, the appliance you’ve sold to a customer is generating a shed-load of valuable data, but questions about data ownership mean that your customer might get snippy if you’re seen to be profiteering at their expense. How do you get around that problem? JLR is trialing the answer to that thorny question – pay them a pittance for it!

Admittedly, we’re being a little flippant, but this does seem to be the logical conclusion of this mechanism, which would see each car have a digital wallet that can be used as a way to buy and sell goods, services, and data. JLR is testing it with the Jaguar F-Pace and Range Rover Velar, using a cryptocurrency basis as the way to perform these transactions – specifically, partnering with the IOTA ‘we’re not a blockchain’ Foundation.

Consumers are becoming increasingly aware that their data is worth something, that they are being profited from in the age of surveillance capitalism or manipulation economy as it has been described, and so, when it is discovered that a brand they are loyal too is essentially double-dipping (profiting from the initial purchase, and then from future data monetization), there’s a risk of consumer backlash.

Of course, a remedy for this would be a better and/or cheaper product, and another flippant conclusion might be that we arrive at a point where products are given away for free or sold at a loss, in order to get enough penetration to generate data at a scale that generates profit. Again, a long-term and probably very unrealistic outcome, but we are definitely arriving at a point that is somewhere between now and that scenario.

This is something that is not such a burden for services that do not charge consumers to use them, with Facebook and Google being the best examples. Those two platforms are harvesting just about everything data point they can, in order to better sell advertising and marketing services, but the consumer doesn’t have much of a leg to stand on when complaining about this, because they are receiving the service free of charge.

Advertising itself doesn’t have much hope in penetrating paid-for services or products. Imagine the revulsion when a new car starts forcing you to watch an advert before you can fire up the radio, or if Netflix had unskippable pre-roll adverts. However, these products and services can still monetize your actions, as long as you aren’t aware of it and therefore can’t get mad about it.

This is where the JLR trial comes in. This mechanism pre-empts the outrage that consumers will feel when it becomes apparent that a paid-for service has been double-dipping – stealing from them, as many will position it in the public narrative. By providing an actual valuable token or commodity, JLR can pull all the data it likes from its cars, as its customers would have been effectively recompensed and signed up to the relevant terms and conditions to do so. But most importantly, these early consumers are going to see this exchange as money-for-nothing, and will (collectively) leap at the opportunity. Imagine the joy you might feel when driving along and being notified that JLR is going to buy you a coffee because you’re just such a swell person.

Meanwhile, JLR is turning round and selling all the data it is pulling from your driving habits, style, behavior, IVI search history, media preferences, purchasing decisions, and vehicle occupancy, to all manner of marketing types – who want to know demographic information that can then be used to influence future purchasing decisions, to better feed you into the gaping maw of consumerism.

And it’s not just the interior data that JLR is going to be able to sell. The sensors and cameras that are increasingly being installed in cars will be able to provide data on traffic conditions, road quality, repair requirements, environmental conditions, and so on. Anything these cars drive past could be turned into one or many data points that could be sold.

So, perhaps our only hope is that the rush by automakers is going to flood the data marketplace, ensuring that this data is actually worth very little to them. The number of automakers out there suggests that this isn’t market that could be monopolized in the near term, nor are the increasingly savvy automakers going to allow one of their OEM suppliers to do this by the backdoor either. Maybe then the aforementioned coffee that JLR gifts to you is just a way to reduce churn, via a positive brand experience.

However, automakers are going to be very interested in the operational data gathered from their cars. These data points allow them to improve their designs going forward, pulling all the distributed telemetry data together so that it can be processed at scale and analyzed appropriately – designing better drive trains, or analyzing fuel usage in different configurations, for instance.

Predictive maintenance is the other major internal use, where the automaker can monitor the condition of the car and take appropriate actions to ensure that small problems don’t become major ones. Spotting a failing timing belt and putting the engine into limp-mode remotely, could be one, and then helping a customer get to a garage before they lose the entire engine. At scale, this helps the automakers spot patterns that could isolate supply chain component problems, but on the micro-level, such technologies should help protect brand image and improve customer loyalty.

The wallet mechanism is key to pulling this off. It has to be easy enough for a customer to top it up with actual currency, tapping a card on a dashboard for instance, or on their phone to interact with an app, and then also be useful enough to be used as a platform unto itself. Paying for tolls or fuel is an obvious primary function, but drive-through and parking payments are others that make a lot of sense. We don’t envision things like movie rentals or album purchases to be much of a driver, but stranger things have happened.

So then, has JLR seized onto a prominent industry buzzword to get some good press to combat its struggling sales figures? We would give the firm more credit than that, as the whole of the automotive industry is looking to the future and trying to work out how their products exist in that world.

Russell Vickers, JLR Software Architect, said “the connected car technologies we are developing will be transformative and truly turn your Jaguar or Land Rover into a third space, in addition to your home or office. In the future an autonomous car could drive itself to a charging station, recharge and pay, while its owner could choose to participate in the sharing economy – earning rewards from sharing useful data such as warning other cars of traffic jams.”