The future’s vehicles are often compared to “smartphones on wheels”, with modern electric vehicles being at the forefront. This also indicates that cars are proficient at gathering personal information just like our favorite devices—although sometimes without stringent boundaries on the dissemination of such data. Recently, following significant findings by the New York Times, two U.S. senators are advocating for governmental intervention to regulate the collection and commercialization of car data.
Several months ago, Kashmir Hill of the NYT, who herself owns a Chevrolet Bolt, revealed how her car and others were obtaining data on driving behaviors, braking patterns, acceleration, and more. This data was then sold to a broker who collaborated with insurance firms. Subsequently, insurance quotations (which are already escalating nationwide) were personalized based on drivers’ habits, often without their awareness or buried within exhaustive terms and conditions.
Preserving Data Privacy in Future Vehicles
Data privacy is a vague notion in a world where we consent to numerous online Terms of Service agreements. However, utilizing driving data to potentially augment insurance premiums emphasizes tangible repercussions. How can governments ensure that connected vehicles uphold drivers’ privacy in the upcoming years?
In the aftermath of the aforementioned exposé, a corporation implicated in the data peddling, General Motors, declared the discontinuation of its collaboration with data broker LexisNexis and analytical firm Verisk. Nevertheless, the NYT reported recently that Democratic U.S. Senators Ron Wyden of Oregon and Edward J. Markey of Massachusetts are demanding the Federal Trade Commission to clamp down on this trade for good.
“We implore the Federal Trade Commission (FTC) to probe automakers’ disclosure of millions of Americans’ driving data to data brokers, and divulge further details concerning this practice unveiled in a recent oversight inquiry,” articulated the duo in a missive to the FTC. If the FTC concludes that these corporations flouted regulations, we urge you to hold the companies and their top executives accountable.”
The correspondence specifically targets GM, Honda, and Hyundai for their data compilation and vending strategies. It denounces GM and Honda’s descriptions of a “voluntary” program intended to reduce premiums as deliberately “deceptive”. However, the harshest criticism was reserved for Hyundai.
Hyundai automatically enrolled all customers activating their new car’s internet connectivity into the carmaker’s driving assessment scheme, which entailed sharing their data with Verisk,” as alleged by the senators. “Between 2018 and 2024, Hyundai shared information from 1.7 million vehicles with Verisk, receiving $1,043,315.69 in return, equating to 61 cents per vehicle. Hyundai failed to acquire informed consent from customers prior to divulging their data.
The correspondence reaffirmed Hyundai’s participation in this practice, pointing out that customers were unaware that their driving habits data would be monetized upon enabling internet connectivity. This revelation is disheartening, especially given Hyundai’s recent emphasis on cutting-edge technology and its production of leading electric vehicles, which are heavily reliant on web-connected services and functionalities.
GM and Honda assured customers that their “Safe Driver” initiatives would lead to lower premiums if adhered to. Nonetheless, besides the ambiguous consent concerns, there was no guarantee that the data would solely be utilized for that purpose:
Nevertheless, automakers were incapable of guaranteeing that this data would be exclusively employed by insurers to offer discounts, and that consumers would not encounter increased costs compared to those who did not enroll in these initiatives. Furthermore, Verisk officials acknowledged to Senator Wyden’s office that their contracts with automakers and insurers did not mandate that driver telemetry data be solely leveraged for granting discounts.
Currently, regulations governing automotive data collection practices are, unsurprisingly, contingent on a patchwork of state-specific statutes. This rationale propels the two senators to advocate for a more cohesive response by urging the FTC to scrutinize the practice, acknowledging that the disclosed incidents are likely just the tip of the iceberg:
The problematic methodologies exposed and detailed in this correspondence are likely merely the tip of the iceberg. Companies should abstain from vending Americans’ data without explicit consent. This is particularly egregious for automakers who market vehicles at towering price points, subsequently extracting marginal profits from consumers’ private information.
Representatives of these automakers reiterated to the NYT that these initiatives were voluntary; however, this fails to address the fact that customers weren’t fully aware of the implications of their participation. One GM official disclosed that the company “continues to share anonymized location data from its vehicles with an undisclosed entity as identified by Mr. Wyden’s office”. Furthermore, a dissolved data broker (previously linked to GM) was noted to have been invested in by the automaker.
Evidently, automakers have grand schemes for utilizing driving data, driven by substantial financial incentives. Concurrently, they seek confidence from customers to deliver in-car software on par with tech giants, all while expecting payment for these functionalities. This conduct isn’t unique; for instance, Apple claims not to relay user data to third parties, though there have been instances that challenge that assertion.
However, if automobile manufacturers aim to pitch a futuristic, interconnected vision, they must refrain from betraying customer trust. Perhaps now, the U.S. government will intervene on these intentions.
Contact the author: patrick.george@insideevs.com
