William Ford – executive chairman of the Ford Motor Company – became the first automotive industry executive to deliver a keynote at Mobile World Congress Monday evening. His message was that the automotive and wireless industries must collaborate in order to preserve the positive impacts connectivity is bringing to society while mitigating the even more serious negative impacts of wider vehicle ownership and use.

Ford also used the occasion to announce the arrival, in Europe, of Ford's revolutionary SYNC smartphone connectivity solution.  SYNC is the automotive smartphone connectivity solution that kicked off a global race in the automotive industry to enable the safe use in cars of mobile phones.  Smartphone connectivity has opened a popular alternative path to vehicle connectivity that has overshadowed the slower-to-develop embedded world of automotive telematics characterized by GM's OnStar and BMW's BMW Assist services.

Ford’s comments represented a stark contrast to the video montage that preceded his speech during which factoids were splashed on large screens touting the billions and trillions of global connections and the positive contributions to GDP made in developed and developing countries by wider connectivity.  Ford noted that the spread of megacities around the globe and the widening ownership and use of vehicles has unleashed the power of mobility and enabled greater individual freedom.  At the same time, though, this wider use and ownership of cars is threatening the free flow of goods and services putting pressure on governments to try to harness and control vehicle use.

Ford foresees the wider connection of cars and the use of vehicle data to facilitate a multi-modal transportation future intended to reduce overall vehicle usage.  By enabling and encouraging the use of alternative means of transportation when and where appropriate governments and municipalities will preserve a driving environment where everything from emergency services to everyday goods and services can continue to be delivered conveniently to highly concentrated population centers.

The mildly alarmist message contrasted slightly with the overall tone of benign connectivity spreading around the world.  The take-away was clearly that while automobiles have enabled people to be more mobile and more independent than ever before it is connectivity that will enable the car to continue to have a long-lasting and positive impact on society in a diversified transportation environment.

I recently visited Silicon Valley for the Telecom Council’s Mobile Forum on the Connected Car. The event was fascinating, but it was the day following the event, which included six appointments, that was in many ways more revealing of the current state of automotive telematics and navigation.

The Telecom Council event took place at the headquarter’s of Marvell Semiconductors and included representatives of wireless carriers from around the world, car maker research labs, venture capital types, semiconductor and software providers and start-up companies.

Speakers at the event discussed topics ranging from the proliferation of M2M-type vehicle connectivity and the M&A activity in that arena to electric vehicles and car sharing and the integration of smartphones with cars and the role of mobile applications.  In fact, the participation of Nokia and Pioneer but the focus squarely on different strategies for accessing smartphone functionality in the car.

MirrorLink was highlighted in presentations and on-site in-vehicle demonstrations by Nokia representatives.  Pioneer Electronics showed off its NTT Docomo DriveNet aftermarket smartphone-based telematics system, its AppRadio and Aha Radio and its head-up display technology with an augmented reality navigation enhancement.

The MirrorLink proposition, a product of the Car Connectivity Consortium, is intended to enable a range of smartphone-based application functionality into center stack head units.  Similarly, both the Pioneer AppRadio and Aha Radio take different paths to smartphone app and content deployment clearly sharing the same objective with MirrorLink.

I hitched a ride back to my hotel with an event participant who happened to be using a smartphone-based navigation application to navigate to my hotel.  Shortly before arriving at my hotel the application warned of a traffic incident ahead.  It was at this point that I realized that the navigation application my benefactor was using was Waze.

The implications of using Waze at that moment were significant.  Waze is currently in the midst of a test in the Silicon Valley area using traffic incident information from Triangle Software’s Beatthetraffic service. 

Of course Waze also uses crowd-sourced traffic inputs and had, until recently, been using incident data from Clear Channel’s Total Traffic Network.  Incident data has always been a challenge for Waze in spite of boasting 12 million global users – or “wazers,” as the company is fond of describing its customers.

The 12 million users are concentrated geographically in places such as Israel, New York and, fortuitously, California generally and Silicon Valley in particular.  So, while my preferred free navigation application is Fullpower’s MotionX GPS, I was now reminded that Waze, too, offers free navigation.

The message was clear: free navigation on a smartphone is table stakes.  It’s a given.  More organizations – particularly carriers – will be seeking ways to offer navigation for free in order to enable location-based service and marketing models.

In other words, the marketing opportunities are in some ways worth more than the application.  This may be why Sprint has indicated some willingness to part company with or renegotiate its relationship with TeleNav as reported in TeleNav’s latest earnings report.  Everybody wants the elusive free lunch.

Speaking of a free lunch, attendees at the Telecom Council meeting were treated to in-vehicle demonstrations of MirrorLink smartphone connectivity by Nokia executives.  MirrorLink provides for safe interaction with smartphone resources such as music, hands-free dialing and navigation including an enhanced user interface and a NHTSA-friendly policy management layer to govern application availability while driving.

For some observers, there is lingering resistance to the MirrorLink user interface and confusion regarding which phones support the technology.  Of course, there is even more resistance to paying $20 for the app that enables the interface.

MirrorLink technology has riled some smartphone navigation suppliers that see the $20 app as a means to recover the difference in the cost of a smartphone map license vs. the cost of an embedded map license.  Both Fullpower and TeleNav executives commented in phone calls that it will be easy for their organizations to switch to TeleAtlas maps, though neither organization has made that choice.  (TeleNav uses both TeleAtlas and Nokia maps.)

Waze is building its own maps from crowd-sourced inputs, not unlike OpenStreetMaps.  Both of these map databases have their shortcomings, but they also have millions of users.

On the third day of my Silicon Valley sojourn, the CEO of navigation software provider Fullpower noted the near futility of car makers seeking to compete with smartphone-based navigation given the cost differences and update cycles.  In fact, he even questioned the wisdom of embedding modems in cars when on-board systems will simply never be up to the tasks enabled by rapidly refreshing mobile devices.  (This perspective continues to gain traction in the smartphone community even as car makers such as BMW and Mercedes-Benz have announced plans to upgrade to 3G on-board modules in the U.S. and elsewhere with LTE plans not far of.)

It was hard to argue with this position.  And the difficulty of the argument was made clearer during a visit with Waze later in the day when executives there demonstrated a new breakthrough user interface.

One of the great challenges for Waze and its users is to enable a hands-free means for interacting with the application.  This is especially difficult given that the most popular version of Waze is on the iPhone where Apple has not yet opened up the SIRI APIs to enable voice interaction for applications.

Waze has found a workaround by using the proximity sensor on the device allowing the user to wave their hand to activate the application and then, use a limited set of commands.  The limited speech functionality set enables the user to set two pre-set destinations and create traffic alerts – an essential function to the crowd-sourced traffic information ethos of the application.

Perhaps most important about the Waze user interface enhancement is that it shows a touch-free way to interact with a smartphone in a car.  It is intriguing to consider the possibility of voice commands to a smartphone controlling vehicle functions.

In the same way, Pioneer’s NTT Docomo smartphone/cradle-based DriveNet telematics system – available in Japan – provides a similar value proposition as will MirrorLink.  All of these systems show the evolution of smartphone integration with the car enabling access to off-board resources and the enhanced user interface capabilities of the mobile device.

Implications:

Consumers like free stuff and companies such as Waze, Fullpower and Beatthetraffic are providing them with free traffic and free navigation.  Waze is building free maps as is OpenStreetMaps, but a qualitative delta remains between these resources and maps from Nokia and TeleAtlas. 

Waze, Fullpower, Beatthetraffic and Pioneer are also making use of their user’s probe data.  So mobile apps are now being used not only to build their own maps and report traffic incidents, they are also probes within their own traffic network.

Car makers such as Audi and BMW in Germany; Toyota, Nissan and Honda in Japan; and SAIC (with InkaNet) in China understand this principle and are making their cars probes within their own traffic data networks.  North American car makers have yet to get on this bandwagon.

Of course crowd-sourcing of traffic information and the creation of community-based experiences are emerging in the connected vehicle space.  And while Waze skeptics remain, the automotive industry may eventually come to realize the power of the crowd so solve complex problems – along with the power of turning an application into a game.

A recent column in the Wall Street Journal by Matt Ridley discussed the power of crowd-sourced science.  His examples included computer gamers collaborating to redesign an enzyme, amateur astronomers searching as a group for galaxies and signs of extraterrestrial life and the thousands of people who record the migratory patterns of birds. 

The same principles are at play with Waze and its new touch-less interface which potentially opens a door to more accurate and timely traffic reporting.  Nokia may soon find a way to leverage its Trapster acquisition for crowd-sourcing traffic instead of just speed trap inputs.  Inrix is gathering probe feed from multiple sources and gets some crowd inputs from Harman's Aha Radio application. 

GM/OnStar, Hyundai, Mercedes-Benz, BMW and Audi have all failed to enable crowd-sourced traffic data in the U.S.  Ford is the closest to delivering this capability.  Enabling crowd sourcing of traffic information is not only the next step in delivering more accurate and compelling traffic solutions it is also the first step toward building a community experience into the telematics experience.  Just ask Waze how powerful that community experience can be.  Better yet, ask Kleiner Perkins, which invested $30M in Waze, what it thinks of this communal traffic experience.

Pioneer/NTT Docomo DriveNet:

After failing in its frontal assault on automotive smartphone use last year, the U.S. National Highway Traffic Safety Administration (NHTSA) has started 2012 with the release of a set of design guidelines as the first phase of an effort to eliminate driver distraction. The new guidelines represent an implied endorsement of OnStar-like telematics services that use an embedded module instead of a connected device.

NHTSA has identified more than 3,000 distraction-related fatalities from 2011 – in the process creating a new measure of the phenomenon. To better highlight the distracted driving issue, NHTSA has unveiled a more accurate way to identify crashes related to distracted driving by defining a category of “distraction-affected crashes.” NHTSA says that last year distraction-affected crashes killed 3,092 people

According to Department of Transportation Secretary Ray LaHood: “This new measure uses a more focused set of the distractions most likely to result in crashes – like dialing a cell phone or sending a text message while behind the wheel. But, because we’ve narrowed the potential distractions included in this new indicator, we can’t compare these first numbers with the 5,474 ‘distraction-related’ fatalities reported in 2009.”

In reaction to these numbers, the agency weighed in with new design guidelines last week (http://1.usa.gov/zyAVxQ) hoping to provide some direction to the auto industry regarding the operation of on-board applications such as hands-free phone dialing and navigation destination entry.

The agency took the guidelines route out of a recent inclination to pursue voluntary rather than compulsory cooperation from the auto industry. Guidelines can take many forms and can have different implications.

Guidelines can represent long-term objectives or they can represent a system of grades or rewards for actions taken in accordance with agency goals. This latter approach is reflected in the global NCAP (New Car Assessment Program) recognition for safety systems, which includes a specific system for awarding points to compliant vehicles. The alternative to the guideline is the mandate, as in the case of the European Commission’s eCall or Brazil’s Contran 245 laws.

LaHood, has made eliminating distracted driving his personal signature - a campaign for which he will no doubt be long remembered. In this context, agency guidelines have the ominous impact of an implied or impending mandate. In other words, NHTSA is suggesting with the guidelines that it is willing to “play nice” with the auto industry for now, but in the absence of some reciprocation the gloves may come off.

NHTSA out of touch?

Distracted driving is nothing new for the auto industry. The debate over in vehicle controls goes back as far as the 1930’s and the introduction of the first car radios.

When it comes to distracted driving, the issue in question is in-vehicle user interfaces and mobile device connectivity. Implicated in this conversation are technologies including:

            Voice recognition

            Text to speech

            Bluetooth/Wi-Fi

            Navigation

            Map/Traffic data

            Alerts/Driver monitors

            Crowd-sourcing

            Camera/LIDAR/RADAR sensors

            Sensor fusio

            Operating systems

            Displays/Gesture recognition

            Microprocessors

Developments impacting all of these technologies are taking shape on a weekly basis.  Advancements include larger/higher resolution displays, faster processors, more accurate/more forgiving voice recognition, enhanced wireless connectivity, more sophisticated data and sensor fusion with alerts and crowd-sourced inputs, driver eye and facial monitors, and upgraded maps and traffic information. 

On the horizon are holographic 3D and head-up displays and vehicles increasingly capable of at least partial autonomous operation.  And, interestingly, smartphones have an important role to play in enhancing the safe driving proposition with more up-to-date map, traffic and POI data and enhanced situational awareness for the driver.

From the NHTSA announcement:

“The proposed Phase I distraction guidelines include recommendations to:

• Reduce complexity and task length required by the device;
• Limit device operation to one hand only (leaving the other hand to remain on the steering wheel to control the vehicle);
• Limit individual off-road glances required for device operation to no more than two seconds in duration;
• Limit unnecessary visual information in the driver's field of view;
• Limit the amount of manual inputs required for device operation.

The proposed NHTSA guidelines recommend the disabling of the following operations by in-vehicle electronic devices while driving, unless the devices are intended for use by passengers and cannot reasonably be accessed or seen by the driver, or unless the vehicle is stopped and the transmission shift lever is in park.

• Visual-manual text messaging;
• Visual-manual internet browsing;
• Visual-manual social media browsing;
• Visual-manual navigation system destination entry by address;
• Visual-manual 10-digit phone dialing;
• Displaying to the driver more than 30 characters of text unrelated to the driving task.

Herein lies the problem.  NHTSA has tried to avoid being coercive and overly prescriptive but the impact of the guidelines is an overwhelming endorsement of OnStar-like telematics systems.  The guidelines clearly favor call center-oriented or voice recognition-based telematics systems and services.

At the same time, the guidelines appear to reject or at least discourage the use of in-vehicle touch screens or displays of any kind.  The most ideal system on the market perfectly fulfilling NHTSA’s guidelines vision are those OnStar systems built around simple driver information displays located in the instrument cluster.

If the NHTSA guidelines were adopted today without a grandfather clause to allow for systems already on the road or in development a wide range of car makers would be at risk.  Ford, Nissan/Infiniti, BMW and others, would be exposed for offering hands-free systems that were not hands free and navigation systems that allow inputs while driving among other violations.  But GM/OnStar would likely be unscathed.

The guidelines will also have the impact, intended or not, of discouraging development of more advanced touch screens and larger in-vehicle displays in favor of voice interfaces.  (The guidelines make no mention of gesture recognition, further evidence of NHTSA’s detachment from mainstream automotive advances.)  In sum, the guidelines could well block advances capable of making driving safer – and large in-vehicle displays have already become critical to safe driving with the most obvious example being back-up cameras.

On the positive side, the NHTSA guidelines, if adopted, will give a boost not only to voice recognition technology but also to call center-based systems such as GM’s OnStar, Hyundai’s BlueLink, Mercedes Benz’s mbrace2 and BMW’s BMW Assist.  All of these subscription-based services have struggled with unsatisfactory renewal rates as customers have opted for smartphone connectivity over the embedded telematics system.  An endorsement from NHTSA will help wean customers away from their smartphones.

Implications

NHTSA ought to establish a public policy framework for wireless carriers, application developers, wireless device manufacturers and automobile manufacturerse to collaborate for the purpose of defining the nature of the driver distraction problem and agreeing on a solution.  Proclamations or guidelines coming from NHTSA without the participation of all implicated parties will not be effective.

The NHTSA guidelines for mitigating driver distraction clearly come down against the use of touch interfaces and in-vehicle displays.  Also implicated are the use of haptic and controller-based systems and touchpads for specific functions while the vehicle is in motion.

What is clear is that there are systems currently on the market that do not comply with the guidelines including a wide range of navigation and hands-free phone systems from a wide range of auto makers.  Most, though not all, voice-based texting systems will likely pass the no touch, no look test.  Call center-based solutions may also be favored as long as all operations can be completed with limited glances and no touch.

Voice recognition and text to speech solutions have come a long way.  Is voice recognition a promising technology for use in a wide range of applications?  Yes.  Does voice recognition work universally well in all environments with all speakers?  No.

Can poor voice recognition in an on-board system lead to frustration and distraction for a driver operator?  Yes.  Is it too soon for any organization to endorse voice as an all-purpose interface to mitigate driver distraction?  Yes.  Can a call center interaction distract a driver?  Yes.

NHTSA has provided guidelines that hew closely to the Alliance for Automotive Manufacturer’s own guidelines.  The AAM guidelines are normally intended as a tool to pre-empt regulatory action by demonstrating auto industry commitments to “good behavior.”  By adopting the AAM guidelines as its own, NHTSA has changed the driver distraction discussion and endorsed voice recognition and call centers over competing technologies (touch and display) still in development.

Where AAM’s intent was to pre-empt reform with voluntary industry guidelines, NHTSA is seeking to influence design priorities – even to the extent of potentially rendering existing systems as non-compliant regardless of their current performance outcomes.  In the end, we are left with 60 days to comment and steer NHTSA away from this well-intentioned errand and its unintended impact.

The U.S. National Transportation Safety Administration has presented new proposed guidelines intended to encourage automakers to mitigate driver distraction when interacting with various in-vehicle applications. The recommendations are not only ambiguous and nearly unenforceable, they reflect a lack of understanding regarding in-vehicle systems in spite of volumes of available research.

The ominously described “first phase” of the guidelines include the following recommendations (as described in a report in Automotive Fleet Top News):

• Reduce the complexity of in-vehicle devices, and the amount of time required to use those devices;
• Limit system operations to require only one hand;
• Limit the time required to glance at a device to no more than 2 seconds;
• Limit the amount of unnecessary visual information in the driver’s field of view;
• Limit the number of manual inputs needed to operate a device;
• Disable functions while the vehicle is in motion – ie. text messaging, Internet browsing, social media use, entering navigation system addresses, entering phone numbers for dialing, displaying more than 30 characters of text unrelated to driving task.

Among the more naïve (if not absurd) statements reported from the DOT was the statement that systems that help drivers avoid accidents (forward collision avoidance systems or lane-departure alerts) were not considered to be distracting and that GPS enabled navigation systems were safer to use than maps.  Agency representatives said future  guidelines would address devices brought into vehicles and voice-based controls.

NHTSA representatives said they chose guidelines over mandates out of a preference for voluntary compliance from auto makers instead of the coercive power of mandates, according ot the Automotive Fleet Top News report.  NHTSA executives reportedly indicated they intend to testify at upcoming NTSB hearings regarding banning the use of all mobile devices in cars and that the agency is awaiting the results of research on cognitive distraction before proceeding with creating additional guidelines.

NHTSA Director Ray Lahood said the new guidelines are now open to a public comment period of 60 days, inviting feedback from the public, automakers, and other interest groups.

The first wave of guidelines listed above read like automotive user interface best practices created by an engineer with no prior experience.  Of course designers should reduce complexity; limit interaction to one hand at a time; limit glance time, limit unnecessary visual information; limit manual inputs and disable functions while the vehicle is in motion.  But each of the prescriptions is either too specific or two vague.

#1 – Limit complexity and the amount of time required to interface – Is this NOT a no-brainer?

#2 – Limit operation to one hand – Is it necessary to make this a guideline?

#3 – Limit the time required to glance at a device to no more than two seconds – Who is going to measure this and how?

#4 – Limit the amount of unnecessary information in the driver’s field of view – Define unnecessary.

#5 – Limit the number of manual inputs needed – Is there any engineer, anywhere in the industry, trying to ADD unnecessary manual inputs?

#6 – Disable functions while the vehicle is in motion including phone # entry – Best of intentions taken too far.

The Alliance of Automobile Manufacturer’s (AAM) Driver Focus – Telematics Guidelines (http://bit.ly/wmqoX7) represent the gold standard for existing industry design criteria for mitigating distracted driving.  Their very existence obviates the need for redundant guideline creation or mandate setting.

The AAM testified before the U.S. House of Representatives in October 2009: “The Guidelines are a ‘best practices’ document that addresses essential safety aspects of driver interaction with visual‐manual interfaces. They consist of 24 principles that address the design, use, and installation of telematics systems with the goal of maximizing ‘eyes on road.’ The Guidelines provide criteria and verification procedures for use by automotive manufacturers and telematic device manufacturers during product development. Each individual Guideline has associated with it:

                        Rationale

                        Criterion / Criteria

                        Verification Procedure(s)

                        Examples (as appropriate)

                        Cites to supporting peer‐reviewed research

“The 24 guidelines are divided into five groups:

                        Installation (5 Principles)

                        Information Presentation (4 Principles)

                        Interactions with Displays and Controls (6 Principles)

                        System Behavior (3 Principles)

                        System User Information (6 Principles)

“The Guidelines assume manufacturers will follow rigorous process standards when developing telematics systems. Let me highlight two key principles:

Principle 1.4 – Addresses the positioning of visual in‐vehicle telematics displays - The proper positioning of displays close to the driver’s normal line of sight allows drivers to continue to monitor the roadway peripherally while looking at the display.

Principle 2.1 – Sets visual demand limits - Eyes‐off‐road time is limited because functions or features must not exceed specified visual demand or driving performance criteria.

It is clear that there is no need for additional guidelines or mandates from NHTSA – or at least not guidelines and/or mandates that do not take into account the progress that has already been made in the industry.  Also unnecessary, are guidelines or mandates that do not provide or leave room for advances in user interface technology intended to mitigate distraction and enhance safe driving circumstances.

Some of the emerging solutions take advantage of contextual information including vehicle location, condition of the driver and road and, ultimately, weather conditions and the state of operation of in-vehicle systems.  Providing ambiguous “guidelines” without the context of recent and anticipated technological advances risks freezing development activities and preventing new safety systems from reaching consumers.

Implications:

This latest NHTSA initiative reinforces the notion that U.S. regulators are still at sea in their attempts to fathom and combat the emerging driver distraction phenomenon.  Rather than encouraging advances in technology they are steering the industry away from solutions built around voice and touch interfaces that are already helping to resolve the problem.

Rather than embracing and highlighting technology, NHTSA clearly prefers to draw lines in the sand and wall off certain areas of development.  In the context of the automotive industry’s existing guideline development, it appears that NHTSA’s efforts are wasteful, redundant and distracting.  

Rather than pursuing the existing side show of additional hearings and research, both the NTSB and NHTSA ought to conduct a careful review of the existing AAM guidelines as well as those of similar organizations around the world, and assess whether any additional guidelines are really called for.  In the end, the NTSB and NHTSA efforts look like nothing more than public relations programs unlikely to advance the industry’s technical understanding of the causes or potential solutions of distracted driving.  Of greater concern is the potential for these regulatory bodies to interfere in ongoing technology advances and actually throw the industry into reverse. 

Plagued by uninsured drivers and fraudulent whiplash claims representing as much as £2B, the government of the United Kingdom is considering implementing policies favoring the use of aftermarket telematics devices. An agreement and recommendations were hammered out in a meeting earlier this week at 10 Downing Street between Prime Minister David Cameron and eight representatives of the insurance industry.

At issue is the rising frequency of whiplash claims – now 1,500/day – adding £90 to the average auto insurance premium. Among the findings agreed to by the gathered executives was “a deeper exploration of the power of telematics to control claims costs.”

Telematics technology, in the form of aftermarket usage-based insurance offers, has already been deployed to help lower the cost of insurance in the U.K. thereby reducing somewhat the substantial numbers of uninsured drivers in the country.  By some estimates, the U.K. has the most severe uninsured driver problem in the world.

White box UBI solution provider Wunelli estimates that at least 10 insurance carriers are currently offering UBI products in the U.K.  These organizations are adding a total of more than 7,500 drivers/month, by some estimates, to the ranks of U.K. UBI users.  Wunelli executives believe that within two years nearly all younger new drivers - who now pay exhorbitant rates - will be UBI customers.

Wunelli insurance partners include Sabre, The Co-operative Insurance, Admiral, The AA, Swinton, Coverbox, Allianz, Equity Redstar, and Markerstudy Group.  Other U.K. UBI providers include Insurethebox, I-kube, Auto Saint and InCarGenie. 

The programs involve the use of an on-board device for tracking time of day, speed, braking and cornering behavior with a Website-based scorecard for providing user feedback.  The programs vary, with discounts offered based on driving profile and with some programs allowing the insurer to terminate the insured with an agreed upon notice period, also based on driving bahavior.

Since the devices currently on the market include accelerometers they can also be used forensically to assess the causes of accidents.  Wunelli offers a module with enhanced event data recording (EDR) for this purpose although the U.K. government does not yet accept data from non-Home Office-approved devices as evidence.  (The data from these devices can be entered into testimony but cannot be the sole evidence supporting or countering a claim.)

But what is emerging is an evolution of the automotive aftermarket module market.  What began as a device targeted at theft deterrence and the fleet market has evolved into UBI applications and, now, is taking on EDR functionality.  A single aftermarket device can now be used by an insurer to prevent theft or recover a stolen car, provide discounts based on driving behavior, and diagnose the causes of accidents, reducing the rate of fraud claims.

The insurance industry is providing the most immediate and tangible monetization opportunity for telematics technology, paving the way for embedded, line-fit solutions.  Young Marmalade in the U.K. is a precursor of this embedded approach, selling cars which have already been fitted with UBI modules to young people.

Rather than focusing on enabling Twitter and Facebook applications in the car, OEMs should be looking to the insurance market for real solutions for which customers are willing to pay today.  Drivers are demonstrating a significant willingness to opt into sharing their personal information in exchange for lower insurance rates and protection against fraud or theft.

Implications:

Eventually, aftermarket and embedded vehicle connectivity technology will speed the claims process and shorten the time required for accident investigations.  In the future, fraud will be almost impossible to perpetuate without hacking into on-board modules to corrupt the data being transmitted.

Vehicle connectivity will also change the customer relationship with insurance companies with two effects:

#1 – Insurers will continue to add functionality to their devices, including smartphone connectivity, to achieve closer relationships with insured drivers.  Additional application opportunities lie in travel services such as navigation, traffic information, gas pricing, and parking information; as well as distracted driving mitigation functionality, automatic crash notification and customer relationship management such as affinity marketing.

#2 – Car makers will accelerate their embedded telematics plans.  The shift to more widespread embedded connectivity will allow car makers to either co-opt or pre-empt the insurance relationships or will enable a co-operative engagement between insurance companies and OEMs.

The fact that the U.K. government is lending its endorsement to telematics technology is only the latest validation of the approach.  One of the solutions to the whiplash-fraud problem is to disallow claims for impacts that have occurred at 30 kilometers per hour or less – a proposition that will benefit from the use of an aftermarket device to validate the speed at the point of crash.

Example of Co-operative/Wunelli UBI dashboard: