Vehicles > A note about Telematics

by Alan R. Segal

Auto manufacturers are setting a bad precedent by restricting car and truck owners’ rights over telematics, the onboard vehicle data that is electronically exported to the factory and dealer network. This practice must end.


Currently there are roughly 215 million licensed drivers in the U.S., and yet owners cannot redirect where their onboard data goes. Consequently, they are handcuffed by who can service their vehicles.


The financial stakes are high. In 2014, motorists spent more than $100 billion on maintenance and repairs done by dealerships and independently owned shops. With 252 million vehicles on the road, dealerships are clearly enjoying the upper hand inside the data trove.

At the core of telematics is the control over choice. Some vehicle owners trust that the manufacturer and the dealer are the best stewards to manage the data, but as it stands, they cannot opt out of that fixed arrangement. Manufacturer and dealer networks are giving their customers a clouded idea of what data is being collected and what is done with it.

In a 2016 survey, the Auto Care Association concluded that consumers do care once they learn the facts about telematics. Less than half of consumers assume car owners have access to the data that their car produces. Eighty-one percent believe that they should decide who has access, and 7 out of 10 have a problem with the fact that the rightful owner does not have a say. Not only do owners lack control over diagnostic vehicle data, but also they cannot prevent the collection of personal information (e.g. ,driver behavior and biometrics) which has nothing to do with safety or preventive maintenance.

All segments of the automotive repair market are undermined when independent repair shops cannot easily obtain their customers’ diagnostic data even with their approval. This funnels the owner to the dealership, where competitive pricing is at risk of being replaced by higher expenses. Service levels are also apt to deteriorate in the absence of choice of repair shops.

Up the supply chain, parts stores and parts manufacturers suffer too if their core customers are not placing product orders because their service bays are empty. Under this worst-case scenario, manufacturers are wielding too much power.

Without public awareness on the consumer, legislative, and public policy levels, this dynamic may materially worsen which is why the Auto Care Association has introduced two principles that manufacturers should adopt. First, all vehicle owners must own all data generated by their cars and trucks, and must be able to direct it to the dealership or independent repair shop of their choosing.

The other, consumers should have a clear understanding of their rights related to vehicle ownership and know how to assert those.
Coincidentally, a recent New York Times story about the future of self-driving cars notes that new federal guidelines require that automakers improve data sharing and privacy transparency before any self-driving car will be given the green light.

Manufacturers and dealers are best off to demonstrate to consumers and policy makers that they are not monopolistically minded. A preserved free market becomes more efficient with an informed consumer base with all of the evidence-based facts there.

Healthy competition thrives when owners may elect who can maintain and fix their vehicle without the uncertainty that an outside party is tracking their data. Above all, trust in an open market becomes stronger when buyers and sellers know that no single entity will be a dominating force.

Article by Alan R. Segal of Best Business Practitioner - Used with permission