The automotive collision repair business in the U.S. grew 3.3% in 2011 to $38.7B, in spite of a decline in miles driven and the number of collisions, according to the latest report from the Automotive Aftermarket Industry Association. Cars are lasting longer, being driven less and getting in fewer accidents, the report notes, citing multiple insurance and automotive industry sources.

The 2012 edition of the AAIA’s Digital Collision Repair Trends: Industry Statistics & Analysis arrives just a week before Telematics Update’s Insurance Telematics event in Chicago. Insurance and automotive industry executives will convene next week to discuss usage-based insurance and the insurance implications of car sharing and EVs, among other topics.

The AAIA is most focused on the concerns of the independent car repair shop industry, of which there were 40,279 as of 2011, down from 46,700 in 2001, according to the report. Insurers and independent car repair shops generally share the same objectives.

Not all car dealers embrace the collision repair business, but for most it is an essential element in their revenue portfolio. Every OEM wants to see its cars repaired with genuine OEM parts. The accident aftercare business is a strategic one for both new car dealers and OEMs and telematics – a topic not covered in the AAIA report – can serve as a lead generating device for the dealer channel.

The study reports that the average number of vehicle miles driven declined in 2008 for the first time in two decades. The total was 2.96 trillion miles in 2011, down 1.2% from 2010. Roadway congestion has also leveled off, according to the report.

The declining rate of vehicle usage has likely contributed to declining collision rates and declining insurance claims, both of which are cause for concern to both insurers and repair shops. Most of this decline is coming in the developed world where more well-equipped cars are available with better educated drivers. In developing markets around the world rising levels of vehicle ownership have brought to the fore issues of security, theft and rising accident rates setting the stage for very different insurance priorities. (Preventing fraud has also emerged as a core issue throughout Europe.)

The proliferation of collision avoidance technologies including adaptive cruise control, blindspot detection, back-up cameras and lane departure warning have certainly contributed to the decline in collisions in the developed world. But the U.S. saw a slight uptick in vehicle ownership last year after a leveling off between 2008 and 2010 – rising slightly to 240.5M vehicles in 2011, according to data from Polk, which was a contributor to the report. More cars usually translates to more miles driven and more accidents.

Polk also contributed average vehicle age data to the study. Polk reports that the average car on the road in the U.S. is 11.1 years old, continuing a steady unbroken yearly rise from 8.4 years in 1995. Polk analysts say that the U.S. can expect to see the overall rate of vehicle ownership to resume its climb as the economy recovers and that the average age of a car will peak.

Vehicle age is a critical factor in determining the repair destination. AAIA says that slightly more than one in three (36.9%) of vehicles in the one year-old category have its collision repair work performed at new car dealerships. The percentage drops substantially after the first year as consumers seek independent repair channels to fulfill their collision repair needs.

So the megatrends represent a mixed bag of good news and bad news for independent repair shops. Cars that last longer are more likely to be brought to an independent repair shop for repairs, but not if there are fewer accidents.

AAIA says that in 2010, independent repair shops contributed 86.3 percent of total sales in the collision repair industry, with dealership body shops making up only 13.7% of total sales. “Previous experience” and “convenience” were the most important factors in selecting an outlet for collision repair work, the study states.

Insurers and independent repair shops have a common cause in capturing a larger chunk of the collision aftercare market. For new car dealers, the best opportunity lies in leveraging vehicle connectivity technology to better identify, respond to and capture post-collision opportunities.

Telematics has a role to play in this scenario, but no car maker has found the solution to this challenge yet. Until OEMs can solve this problem their aftersales divisions will continue to miss out on billions of dollars in revenue while dealers battle insurers and independent shops for profitable collision repair opportunities.

The news from General Motors, reported by the GMAuthority a week ago, was that 1,849 Volts were sold in July a 125% increase over the year ago period and a 100-unit improvement compared to June 2012. I couldn’t be happier to hear some good news about the Volt – with its clever dual-mode, extended-range powertrain, but the GMAuthority report proceeded to tout the minimal sales of Volts to “fleets.”

For some reason the word “fleet” continues to be a dirty word in Detroit and other automotive capitols, at least in North America. When an automotive executive hears “fleet” the normal association is to rental car fleets where cars are sold at steep discounts to clear out inventories and make up for shortfalls in retail sales.

There is another kind of fleet business, which is commercial fleets, and commercial fleets are increasingly interested in green technologies as represented by the Chevy Volt. The roster of corporate incentives for private employee vehicle purchasing is growing (See: http://www.hybridcars.com/corporate-incentives.html) but GM remains on the outside looking in.

GM remains locked in an out-of-date mindset that associates fleet sales with all things negative. The Volt, now in its third year, may be outselling the Nissan Leaf but it is no secret that the sales volumes for this innovative and cosmetically attractive and socially acceptable green machine have been disappointing. It is also no surprise that most of the executives responsible for the initiative from its inception have been exiled from GM, with many joining competitors - including some that touted fleet sales.

The Volt accounted for 10,666 units sold in the first seven months of 2012, a 270% increase over the same time period last year. The Leaf moved 3,543 units, down 26.3%. Both figures were reported by GMAuthority.

GMAuthority further notes that Volt sales have gotten a lift in California where the state has granted solo access to carpool lanes for Volts – adding that “about 1 in 3 Volts are now sold in the Golden State.” This local demand translates to a 34-day supply of Volts in California vs. a 52-day supply everywhere else.

In a separate bulletin from GMAuthority, the news source comments on attractive new lease rates for Volts. All of these efforts have the flavor of too-little-too-late to make the Volt the kind of viral success it was intended to be.

I still nearly catch my breath every time I see a Volt on the road - partially because it is such a rare occurrence. The attractive styling – in contrast with the dowdy Leaf and Toyota Prius – combined with the ecological cred still imparts a powerful aura to the car. But steep dealer markups in its early restricted availability days and the cold shoulder turned to the corporate fleet market have consigned this loss-producing car to a highway heading to nowheresville.

It’s not too late for GM to wake up to the private/retail sales opportunities in the corporate marketplace. But it is a shame to consider the thousands of units in potential sales that have already been lost.

Sometimes a company does something so wrong-headed it is impossible to ignore. The normally very clever executives at Scosche - pioneers in automotive infotainment system integration - have announced their plans to re-enter the car stereo market with a head unit that enables use of the mobile phone as a remote control, according to a report in the CEOutlook newsletter (http://bit.ly/RbDe4k - Scosche Debuts Car Radio at KnowledgeFest). Even worse, Sony has similar plans for 2013.

At a time when U.S. government regulators are threatening to disable the use of mobile phones in cars altogether to mitigate distracted driving, Scosche is launching a system that encourages the driver to use his or her mobile phones as a remote control for the car stereo. The whole objective of OEM automotive engineering efforts around integrating mobile phones in the car for the past eight years or more has been to shift control of the phone to the vehicle HMI.  The over-arching message to consumers: Don't touch your phone when you are driving.

Somehow, Scosche has seen fit to affect an industry U-turn to shift control back to the phone. Scosche has also somehow missed the tidal wave of headlines pronouncing the imminent arrival of Apple’s Siri voice interface for automotive aftermarket integration, along with competing solutions from Nuance, AT&T and others.  The goal, again, control the phone with the vehicle HMI - steering wheel controls, voice, head unit touch screen, hardware controller.

The only possible good news perceivable in this announcement is that it will shine a white hot light on aftermarket remote controls and, maybe, clarify the need for some industry soul searching as to the efficacy of these systems in a voice-enabled in-vehicle interface future. I have a lot of respect for Scosche and I am confident they will recognize their bungle and get a Siri or some other kind of voice-based interface in the box with their new systems before they launch.

Ten years into the current smartphone revolution some people and organizations still do not realize what is happening. Nowhere is this more apparent than in the automotive industry where regulators and industry associations continue to take a top down approach trying to build consensus and promote mandates in a market in the throes of being recreated from the bottom up by massive mobile device disruption.

Disruptive change is coming from the radiating ripple effect of global smartphone adoption transforming consumer behavior and content and application consumption patterns.  For the automotive industry, the latest twist on this disruption is the rapid proliferation of Wi-Fi and Bluetooth technologies on mobile devices.

Wi-Fi and Bluetooth wireless technologies are disrupting everything from traffic data gathering to content consumption and, most recently, safety.  Smartphone users have seen their use of mobile phones in cars changed by Bluetooth hands-free interfaces (HFI) and have tapped audio streams through their car stereos with Bluetooth’s advanced audio distribution profile (A2DP),.   Now Wi-Fi Direct has emerged to change safety.

And GM has emerged as the Pied Piper of Wi-Fi Direct after revealing its own internal studies demonstrating how Wi-Fi Direct technology in cars might be used to detect the presence of pedestrians’ smartphones by detecting their Wi-Fi signals.  (http://bit.ly/MM47w9 -How Your Smartphone Could Stop a Car From Running You Over)  In this way, Wi-Fi Direct could be used as an enhancement to existing sensor-based safety systems to help drivers avoid pedestrians – or to at least be alerted to their presence – in a low-latency sub-second manner – without connecting to a wireless cellular network.

V2X via smartphone integration

The announcement of GM's new findings follows a presentation at Telematics Update V2X for Auto Safety and Mobility 2012 in Novi, Mich., where GM engineer Donald Grimm presented a vision of V2X technology deployment via aftermarket devices and smartphones.  The new Wi-Fi Direct concept from GM published last week solves a problem raised by attendees of the TU event, regarding the detection of pedestrians in a V2X-enhanced world built around Digital Short Range Communication technology – the 802;11p-based technology upon which V2X is being defined.

DSRC-equipped cars will have no way of detecting pedestrians.  But Wi-Fi Direct-enhanced cars will have this ability and in fact could deliver this technology today.

By swapping DSRC technology for Wi-Fi Direct, GM is highlighting the shortcomings of DSRC technology, the adoption of which has created a chicken and egg scenario.  DSRC technology will work best once all cars equipped with the technology to enable enhanced traffic and collision avoidance applications.

But DSRC technology has no subscription or revenue component, making it an expensive vehicle enhancement requiring additional hardware, software and enabling infrastructure. To succeed, DSRC is ikely to require a top down government mandate and a homogenization of global standards to take hold.  GM is pointing the way toward a life-saving technology already widely distributed among consumers on their mobile devices.

In the presentation given at the TU event earlier this year, the GM engineer suggested the possibility of DSRC technology being built into smartphones – a clever but expensive and pointless exercise, particular in light of Wi-Fi Direct’s availability.  Further impairing the vision of smartphone deployment of DSRC are issues of power consumption and in-vehicle docking of the device.

The beauty of the new GM proposition is its use of existing devices – smartphones – and existing standards-based technology – Wi-Fi Direct – to save lives without the creation of new standards, new hardware or new mandates.  Bike messengers and pedestrians wanting to take advantage of the new technology might be able to install an app to enhance the sensing process.

Implications

The rapid adoption of Wi-Fi Direct will get far greater impetus in a competitive environment, such as that implied by GM’s research and potential implementation, than by a collaborative standards-setting activity such as that associated with the ongoing V2X activities or the mandate approach characterized by Europe’s ill-conceived eCall initiative.  GM researchers are proposing that cars simply tap into the surrounding wireless signaling environment to help avoid collisions.

In a similar way, roadside Bluetooth sensors are increasingly being deployed by organizations such as TrafficCast, Siemens and others to glean highly accurate insights regarding traffic flow from passing motorists and their Bluetooth-equipped smartphones.  There are wider implications and a growing roster of new applications enabled by this ad hoc sensing process.

The most important takeaway of all, of course, is the critical role of the smartphone as a self-contained safety system in the car.  A Bluetooth- and Wi-Fi Direct-enhanced device is capable wirelessly communicating its location up to 600 feet away as well as sensing nearby devices.

This sensing and contextual awareness has life-saving implications for drivers and pedestrians and the differentiating market development opportunities are emerging faster than an application download.  It is for this very reason that open application platforms in cars in the form of smartphone interfaces are so important.

In an ironic twist, the deployment of safety systems taking advantage of Wi-Fi Direct signaling are likely to benefit from existing research into DSRC signal propagation and interpretation.  So all that DSRC work won’t be going to waste.

The scanning for the presence of pedestrians is clearly a local, on-board application in the car, but there will be opportunities to process the sensor inputs in a cloud platform for added value insights.  And it is likely that such a system will need upgrades or updates on a regular basis as enhancements to the detection algorithms are discovered.

It’s just another way smartphones are driving live-saving changes from the bottom up, rather than from the top down.  Wi-Fi Direct can save lives, but not if smartphones are banned or their functionality is compromised.

Yesterday evening, while driving home from meetings in the New York metropolitan area, I had an extraordinary traffic information experience which highlighted a company in the traffic business that doesn’t often get much credit.  I am writing this blog as a shout out Clear Channel Commnication’s Total Traffic Network and as a plea for a new service: Traffic on Demand.

To better understand my story one must understand the traffic landscape.  There are several variables to getting traffic information correct and there are several kinds of traffic information.  The two most important elements of traffic information are incident and flow data. 

There is a widespread belief that real-time traffic flow information from organizations such as Waze and Google is “good enough.”  This perception makes life difficult for supplers such as TomTom, Inrix and Nokia Location & Commerce that want to charge for their traffic data.  These three competitors do their best to deliver real-time flow and incident information along with predictive traffic models – to allow them to enhance navigation routing instructions.

The quality and accuracy of traffic flow data is steadily improving thanks to the addition of more and more vehicle-based data probes.  Flow data is also benefiting from advances in roadside sensor technology – for example, from the implementation of Bluetooth sensors from a wide range of companies including TrafficCast, Traffax, Siemens, Philips and several university research organizations.

But as competitive pressures have grown, traffic information providers have had to reduce their investments in traffic observation resources.  Traffic observers help to enhance the publicly available sources of information regarding traffic incidents, the causal element behind traffic jams.

Knowing why traffic is backed up can play a big role in predicting when traffic will improve or how much worse it might get.  Also, knowing why traffic is backed up takes the stress and anxiety out of being in traffic.  If a driver knows traffic is backed up for a presidential motorcade, a tire changer, or a police emergency it allows him or her to relax and appropriately adjust expectations regarding the potential for clearing up the traffic snarl.

Historically, traffic helicopters provided the best insights regarding causality for traffic events.  But traffic helicopters have almost completely disappeared, in most instances replaced by ubiquitous roadside cameras.

Second only to helicopters are fixed observation points and control rooms manned by operators monitoring fixed cameras.  While many organizations in the industry have either drastically reduced or completely eliminated these investments, Clear Channel Communication’s Total Traffic Network maintains the largest private traffic monitoring network in the U.S., with 16 regional traffic hubs operating 24/7 and 10 smaller satellite offices.  TTN also maintains a proprietary network of traffic cameras as well as some aircraft all feeding the company’s TrafficNet internal traffic data platform which in turn feeds services including SigAlert and Metro Traffic as well as embedded navigation systems.

My story is all about the “why” factor in traffic data and easing anxiety.  I was southbound on Route 95 north of Philadelphia Friday afternoon when I noticed police cars blocking entrance and exit ramps on both sides of the highway around Cottman Avenue.  Traffic was understandably backed up on the northbound side of the highway though not, thankfully, on my side, southbound.

Still, as the magnitude of the back-up on the other side the Jersey barrier became clearer and as that data appeared as black backup icons on my embedded navigation system, I began to get curious as to what might be the cause of the unfolding event.  I had just gotten off the phone with an executive from TrafficCast who had mentioned he was in the Philadelphia area, so I immediately rang him back up.  TrafficCast is pursuing the deployment of Bluetooth-based sensors throughout the U.S. under the BlueToad brand with a recent win in the Boston area.

Two or three failed calls later, I decided to call executives at TangoTraffic to see if they might have some insight into the situation I was witnessing which, by now, had revealed itself as a multiple-mile backup.  TangoTraffic is a traffic-only cable channel, not unlike the Weather Channel, but focused entirely on local traffic.

TangoTraffic, which includes on its team some former Traffic.com executives and uses a Nokia L&C traffic data feed, is based in Malverne, Pa., not far from Philadelphia, so I was sure they’d have some idea what was going on.  Unfortunately, there was no answer.  I then called two Inrix executives, but no answer there either, likely due to vacations.  Inrix is rapidly closing in on global traffic information market leadershiop and is actively leading the industry shift to IP-based traffic information platforms.

With no success trying to reach Inrix, I turned, finally, to my most reliable traffic info source and on the second try got a vice president from Total Traffic Network on the phone.  Literally within seconds this executive was able to tap his TrafficNet database to tell me that the backup was the result of the funeral procession for Officer Brian Lorenzo, an off-duty, though in uniform, motorcycle highway police officer who had been killed two days before by a wrong way driver on the very highway on which I was traveling.

As a final note, the TTN executive let me know that by now, about 10 minutes after passing the origin of the tie-up, the highway ramps had been re-opened and traffic should be moving freely soon.

Implications

Good enough traffic information is only good enough until it isn’t good enough.  Witnessing the massive backup for the funeral procession of Office Lorenzo reminded me that real-time traffic flow info is not good enough.  There are few things more humbling to a driver than being trapped in his or her personal metal cage in a traffic jam.

Conversely, there is nothing more empowering than having access to the digital resources to make sense of the surrounding traffic conditions to be able to plan and respond accordingly.  Incident data is the key to unlock that power and Total Traffic Network is the market leader in delivering timely, accurate traffic incident data.

Traffic solutions are improving, contrary to the popular impression that traffic data services are as good as they are ever going to get.  BMW’s new IP-based, TPEG-capable traffic delivery platform for the new 7 Series will deliver more information, faster and in more granular increments along the highway, enabling what can only be called high resolution traffic information.

Traffic information has improved and is improving.  Enhanced access to more accurate and timely incident information is just one form of improvement.  As IP delivery of traffic information transforms the market it will be interesting to see how the quality and quanitity of traffic information is impacted.

TTN's analog human assets may be its most powerful tools in an increasingly digital world.  But what my situation called for was analog access to this digital information.  What if, instead of talking to a TTN VP, I were able to access the TrafficNet database - or some other cloud resource - by voice to understand the traffic situation surrounding me.  The traffic application within Harman's Aha Radio - enabled as it is by Inrix - is a step in this direction, but there is no reason why traffic on demand or traffic as a service could not be enabled.

More progress will come from image recognition being brought to traffic cameras along with crowd sourcing and wider deployment of more accurate Bluetooth-based roadside sensors.  In the end, though, there is no substitute for the human factor – the ability to identify causal factors for traffic incidents, report those causes, and point out solutions for stressed out drivers…like me.  But traffic on demand is the new frontier and TTN can make it happen.

"Those who cannot remember the past are condemned to repeat it." - George Santayana

I am happy to report watching with great amusement the Siri television advertisements featuring John Malkovich.  (See here on Youtube: http://huff.to/MYi4X7)  Very droll and certainly tantalizing from a speech recognition standpoint seeming to reflect, as claimed by Siri's parent Apple, that the Siri recognition engine is capable of learning the inclinations and preferences of each individual user.  As an automotive analyst, however, I've had to give those ads a harder second look.

Siri arrives in the marketplace at a time when government regulators in the U.S. - and in some geographies outside the U.S. - are focusing on driver distraction.  Siri appears to have been rapidly seized upon by multiple car makers as the ultimate solution to the distraction mitigation challenge.  The suitability of Siri to this task is posited by its alter ego brand name: EyesFree.  The promise of using Siri in the car is to achieve an EyesFree means of accessing features and functions on the iPhone.  Of course it is not quite hands-free because Apple is promoting the application with a steering wheel mounted trigger. 

(It is worth noting that engineers at Waze divined a way to use the proximity sensor as a trigger mechanism, but that is a separate story.)

Nevertheless, a tidal wave of what can only be called Siri hysteria ensued.  Apple, it seemed, had solved the automated voice recognition challenge singlehandedly.  It is at this point that I feel a word of caution is advised.  It wasn't so long ago, maybe six or seven years, that Bluetooth was embraced as the definitive answer to hands-free phone interfaces.  To be sure, Bluetooth has proven helpful, but it is far from a panacea, even after all these years of development and refinement.

The challenge for both Bluetooth and voice recognition is the fact that the implementers of these technologies continue to ask them to do more.  Bluetooth has not yet completely conquered HFI and the industry is already moving on to A2DP and SPP profile implementation.  AVR systems have not yet mastered one-shot destination entry and now car makers are introducing dictation and email and text message composition.  And Siri is more or less offering voice-based access to most iPhone functionality.

As you watch and chuckle over John Malkovich chatting with his iPhone remember that he is conducting his conversation in an utterly empty and quiet salon while relaxing in an arm chair.  This is nowhere near the operating environment of a noisy automobile cabin.

And to which organization should a car maker turn to solve its AVR challenges?  The maker of mobile devices held in the hand or to an organization built entirely around solving voice recognition challenges in a wide range of environments with a particular emphasis on automotive systems? 

Cloud-enhanced recognizers such as Apple's Siri may learn my inclinations and preferences and Google's Now AVR app may access Google's Knowledge Graph with 500 million entities and 3.5 billion relational facts, but neither of these organizations can offer car makers their undivided attention.  Robust voice-based solutions are to be found within the existing automotive eco-system and will reflect the priorities of the OEMs around quality of service.

Implications

Bluetooth is a powerful technology but it has caused many complaints while solving problems and enabling new forms of content and service delivery.  AVR technology is viewed as one of the key interface modes that will contribute to resolving distracted driving, but it is far from perfect or perfected. 

But the organizations that have taken AVR the furthest and are likely to continue to lead in the automotive market are already invested in the automotive market and present.  These organizations include Vlingo, Nuance (Dragon Go!), AT&T (Watson) and Microsoft (Tellme).  Car makers should take greater care before embracing a technology that may or may not satisfy customers, may or may not solve regulatory challenges, may or may not enable new features and functions - but will definitely generate customer confusion and aggravation.

The latest JD Power Iniitial Quality Study highlighted the fact that AVR systems are the leading cause of customer complaints.  This is significant given the fact that the study was conducted in the U.S. among a fairly homogeneous population of English speakers.  What happens to AVR technology outside the U.S. where dialiects are more numerous and more challenging.  Will it really be worth marring an existing HMI environment in the car with a steering wheel add on to accommodate a single phone maker.  Maybe, but as we take that risk let's do so with eyes wide open and with the intention of avoiding a repitition of past HMI blunders.

Because Siri was not conceived specifically for automotive use and because Apple does not provide for any distraction mitigation measures, the Siri proposition is an application free for all.  Siri enables all functions - maybe - instead of delivering a few very specific functions reliably and safely.  That, in the end, is the big difference between Siri and existing (or in development) automotive grade AVR systems.  Proceed with caution.

Tuesday the European Parliament adopted a resolution calling on the European Commission and the Member States to make sure the eCall system will be installed into every new vehicle by 2015. The absurdity of this proposition grows with each passing day and yet the EC refuses to acknowledge and accept its increasingly obvious irrelevance.

With the ubiquity of mobile phones and the crowded condition of most European highways, the likelihood of a crash causing serious injuries and going unreported is slender at best. A smartphone-based solution along the lines of what Ford and Daimler have proposed will not only provide an immediate solution available to all new car buyers, but will also enable a more robust system capable of delivering far more than the minimum set of data specified in the in-band modem-based eCall standard.

A more immediate concern for regulatory authorities will be to ensure the availability of emergency response personnel and equipment and to prepare public service access points (PSAPs) to receive the widest possible range of communications from the accident scene including phone calls, text messages, voice-over-IP communications, and video. As things stand, the majority of PSAPs are not even equipped to receive the minimum set of data via in-band modem transmission.

Instead of offering a proposition capable of immediately saving lives, the EC continues to bury its head in the sand refusing to accept the disruptive impact that mobile phones have had on emergency communications. The EC is mandating the use of in-band modem, data-over-voice, technology that the majority of European PSAPs are simply not equipped to receive and interpret. Meanwhile, private eCall solutions from PSA, BMW and Volvo are already in place in most, though not all, of the 27 EU member countries.

The EC’s insistence on an embedded modem guarantees that car makers will be compelled to provision two modems on most cars, if they choose to offer their own diagnostic and customer-relationship targeted devices. OEMs will want to deploy embedded LTE technology for product life cycle reasons, once it is available and coverage is adequate. A 2015 mandate will likely force car makers to implement existing modules for eCall, hence the prospect of a dual modem scenario.  (Renault's launch of R-Link, with its EDGE modem, is a classic example of this phenomenon, providing an app store but no diagnostics or automotic crash notification.)

Smartphones as one eCall alternative; and what about privacy?

The immediate challenge ought to be to assist car makers in bringing whatever system they can to market to solve the problem – including smartphone-based solutions such as those from Ford Europe and Daimler. In other words, the EC ought to back off on the technology mandate and simply require automakers to select whatever solution is suitable to fulfill the emergency notification and minimum data set requirement.

As the eCall debate has played out over the past decade, the growing inappropriateness of the mandated technology has only become magnified by changing wireless communications technology and growing concerns regarding privacy. When the debate over eCall began, LTE was barely on the radar of automotive planners. Today, LTE is a primary concern for OEMs planning to embed modems in their cars all over the world.

The eCall mandate, which was originally seen as opening the door to enable a wider range of embedded telematics services, is now morphing into a separate standalone module destined to provide a redundant and outmoded vehicle connection. Today. no car maker seeking to provide access to emergency services via an embedded modem will want to have that provision managed by a device using in-band modem technology.

In the United States, where so-called Next Gen 911 technology is being contemplated, there is no public authority talking about a “minimum set of data.” The focus of regulators and safety advocates is clearly on enabling the most complete access to accident scene information, particularly via the mobile phones of the affected parties. The NG911 agenda is intended to ensure that PSAPs are prepared and equipped to receive all forms of data and voice communication. And there is no requirement at all for car makers to embed a device.

Sixteen years after the launch of OnStar it is clear that the emergence of the mobile phone obviates the need for an embedded device. (Just imagine for a second the responsibility and liability implicit in a failure of an eCall module to perform in a crash. The legal implications are enough to give one pause although I am sure the disclaimers have already been crafted.)

LTE deployment changes everything

Europe is already behind the telecommunications technology curve with its plodding rollout of LTE technology relative to North America and Asia. Once a global wireless leader, the EU’s wireless network strength has been leapfrogged leaving the region mired in battles over roaming charges and, now, an antiquated eCall mandate.

Rather than fostering a robust debate about how best to leverage LTE technology and smartphone connections to save lives in automobile crashes, the EC continues to stick to its eCall guns. This obstinacy continues in spite of studies conducted by NXP Semiconductors and others showing the superiority of even SMS technology to the anointed in-band modem solution.

Finally, the emergence of privacy issues has further doomed eCall, but the EC refuses to acknowledge the obvious. At some future date – with a fully rolled out eCall solution – cars will call public service access points directly. Still unclear is whether or how the car maker, the car dealer, the insurance company or the next of kin will be notified in the event of an injury or fatality. There is no provision within the eCall mandate for any of these parties to be notified of the condition of the car and its occupant(s). There isn’t even a provision for notifying next of kin.

In the end, car makers are likely to feel compelled to embed their own modems for vehicle diagnostic and customer relationship management purposes, while car dealers and insurance companies may seek to plug in their own modules. Instead of a single module vision of vehicle connectivity – eventually to be joined by a V2X add-on once standards are converged – the EU will yet again be at a disadvantage in the vehicle connectivity game – hobbling European car makers with a well-meaning mandate more than 10 years in the making that has yet to save a single life.

It may be crass to point out, but the scene of an accident is a huge economic opportunity for the insurance company, the dealer and the OEM. Accident aftercare is a multi-billion dollar opportunity and one to which embedded telematics holds the key. The sooner the EC aligns itself with the economic interest that is at stake, the sooner real understanding and progress might be achieved.

A single point of call dispatch

The only way the EC could possibly rescue the ill-conceived venture will be to institute a single PSAP strategy providing an EU-wide dispatch capability along the lines of the solution adopted by the U.K. and proposed by Russia for its own eCall system. Of course, such a system will be expensive and difficult to justify. No, clearly the EC feels it is far easier to simply push the problem onto already financially burdened car makers. (Which OEM is shutting down European production THIS week?)

But a simpler solution lies in the mobile phone. If the EC were to finally and definitively accept smartphone integration as a solution supporting eCall functionality it would resolve the conflict in a flash. With such an approach the organization will also be opening the door to a far more robust emergency response solution.

The typical smartphone today comes with a quad-core processor, compass, accelerometer, magnetometer, gyroscope and GPS. In fact, the average smartphone has the sensor equivalent of a military-grade unmanned aerial vehicle’s avionics system. Add front and back cameras, voice recognition and access to cloud services and you have a remote diagnostic and communication package capable of acting as a remote crash scene assistant.

Instead of exploring the possibilities of smartphone connectivity for enabling and facilitating emergency response, the EC continues to insist on its narrow, retrograde approach to technology: the in-band modem. Leveraging the smartphone – perhaps requiring that it be firmly fixed in the car in some fashion – will also quiet the qualms of European wireless carriers leery of adding modules to the network that will add stress but no revenue.

(The GSMA has gone so far as to make the ridiculous proposal of a “dormant SIM” to address this stress-with-no-revenue concern. No OEM is interested in installing a dormant SIM in its vehicles regardless of the benefit to the carrier.)

The single occasion where an embedded communication device might come to the rescue of a driver – ie. in the event of a crash that takes place outside of a populated area – is precisely the circumstance where the embedded module is likely to fail to find a network. And in that event, should a passing motorist see the crash, they are less likely to call, since they will assume the call has already been made by the vehicle.

A smartphone with a proper vehicle connection is the more suitable solution for car crash emergency response in the absence of an embedded solution. The EC should make explicit provision for smartphone connectivity along the lines of Ford and Daimler systems and then focus on bringing the PSAP network up to a higher and more uniform standard for receiving crash scene voice and data.

Implications

An EC mandated eCall module is destined to become a single-function device burdening European OEMs with unnecessary cost and redundant functionality with little benefit to carrier or car maker. The sooner the EC abandons this folly, the better.

If the goal is to save lives and to speed emergency response to crash scenes the swiftest solution to the problem lies in smartphone connectivity. The EC can retake the global emergency response initiative and achieve a measure of wireless communications leadership were it to adopt a smartphone solution to this problem.

Only by removing itself from the process of defining the technology to be used to solve this problem will the EC truly stimulate competitive innovation in the marketplace. The most helpful contribution the EC can make will be to develop a program for a single point of dispatch and foster technology development and adoption for the PSAPs themselves.

In an ideal world, cars should only require a single connectivity box suitable to fulfill all forms of connectivity functions thereby limiting the number and variety of supporting hardware and software systems for gathering and transmitting vehicle data in a secure manner. With the onset of LTE, OEMs will want this module to handle embedded emergency functions but continental deployment of LTE is yet in its earliest stages – all the more reason to leave the eCall function to the smartphone for the time being.

Insurance Telematics London 2012 represents a unique opportunity, this week, to discuss in open forum the suddenly center stage issues related to establishing industry standards for insurance-related applications. While the focus has lately been on reducing whiplash claims in the UK, there is a wider range of issues including data portability between carriers, standards for implementing different types of usage-based insurance, discounts/incentives/requirements for safety system installation and new ways of using vehicle data to improve underwriting.

Many of these irons are already in the fire. In the weeks leading up to the event, Wunelli abandoned an industry “think tank” after finding universal support among insurers for an industry data standard.  Just last week the Association of British Insurers created what it called a “telematics committee” headed by Ageas’ managing director to get its arms around the issues and opportunities bound up in insurance-related telematics solutions.

The implications of these inquiries and initiatives go well beyond the shores of the UK.  Standardizing the collection and interpretation of vehicle data for insurance purposes has potential application to both insurance and vehicle telematics applications around the world.

The initiatives described above follow by a couple months the now-famous insurance summit at 10 Downing Street where the UK government and insurers agreed to explore the use of telematics systems to help reduce whiplash claims and the related increase in the cost of insurance.  Wunelli chairman Sandy Dunn captured the moment best when he was quoted: “And it’s clear from the response we’re received that the industry recognizes the need to move quickly to rensure we establish standards for the quality and security of data and the way data is collected in order to optimize the future benefits for customers and providers of telematics-based insurance products.”

As discussed in a previous blog post (http://bit.ly/yRukTp - Will UK Turn to Telematics to Fix Auto Insurance Woes?) the UK has been hit by uninsured drivers and fraudulent whiplash claims representing as much as £2B.  Whiplash claims are estimated at 1,500/day adding £90 to the average auto insurance premium.

Proposals suggested by the ABI include:
• A system where whiplash claimants receive no compensation for alleged pain and suffering (general damages) unless there is objective medical evidence of injury.
• Capping or reducing the level of damages for whiplash claims.
• Having a panel of independent doctors to assess whiplash claims, rather than the claimants GP.
• Greater use of bio-mechanical evidence that might enable the introduction of a speed threshold under which there would be a presumption that whiplash has not occurred.
One of the potential outcomes of a standardization effort may be the broader acceptance of event data recorder inputs from aftermarket devices for forensic analysis of crash data.  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.

While reducing whiplash claims is the focus of these standardization efforts, those efforts should not stop at UBI devices.  The government can use the opportunity of the whiplash debate to take up the issue of enabling and encouraging the wider adoption of crash avoidance systems.

Few, if any, UK insurers offer discounts for crash avoidance systems such as Volvo’s City Safety technology.  These systems have been proven to reduce claims as much as 20% by the Insurance Institute for Highway Safety In the U.S., and yet there is not insurance discount to the customer that elects to purchase these systems.

But the industry need not stop there.  What if car companies with embedded telematics systems could sell the vehicle data to the insurance company, thereby obviating the need for an aftermarket device?  At a recent Telematics Update event in Munich representatives of Fiat and Volvo both indicated a willingness to participate in such a scheme.

Standardizing data will better enable the portability of UBI insurance coverage between carriers.  Is the industry prepared to empower consumers by letting them own their data and take it with them from carrier to carrier looking for the best deal – something that will be facilitated by data standards.

And, finally, what if standards were agreed to regarding in-vehicle user interfaces that correlated directly to UBI insurance discounts.  Such standards could allow a driver to limit his or her use of mobile devices or touch screen interfaces in exchange for insurance savings.  Airbiquity has created just such 'dashboard"-type tools for customizing the interfaces of existing systems.  The Airbiquity solution is capable of allowing a car maker, insurer or the customer him or herself to manage the policies governing in-vehicle interfaces.

Implications

The insurance industry’s embrace of standards promises to slay the dragon of fraudulent whiplash claims but, more importantly, it is opening the door to a wider range of industry reform that promises to save lives and money.  The insurance industry has the ability to provide the kind of incentives that will mobilize consumer adoption of safety technologies at the same time that it is creating a more attractive underwriting environment.

Of course standards also promise to raise the transparency level of an already fairly transparent UK insurance industry.  But Wunelli is raising the bar with the relaunch of the Comparethebox Website – enabling consumers who are already fitted with a telematics insurance system to compare the rates of competing providers.  Further innovation in this direction can be expected.

In the midst of all of the insurance telematics enthusiasm it is important to remember the nature of the UBI advantage.  UBI insurance provides for greater underwriting accuracy and helps insurers hang onto their best customers, while poaching those same attractive customers from competitors.

The UK is fairly unique in its embrace of surrendered privacy for both public and private puroses.  This behavioral aspect is manifest in the thousands of cameras installed along roads and in public places. 

Still, it is important to keep cause and effect carefully sorted.  The Co-operative has a release out claiming a reduction in car crashes of 20% thanks to the use of “smart box” technology.  Since UBI insurance customers are self-selecting it is perhaps best to be more careful about drawing statistical conclusions between those insured with telematics-enhanced policies and those not.

The most important objective of any UBI scheme is behavior modification, as suggested by The Co-operative’s findings.  More often than not, though, UBI insurance products attract a combination of good drivers (most likely to benefit from the discounts) and not so good drivers (who either cannot afford or are legally compelled).

Effective UBI programs should include data reporting tools available to the drivers themselves.  Wider application of UBI will make it possible for all drivers to benefit from learning more about and thereby potentially modifying their driving behavior in the interest of an insurance savings.

The National Highway Traffic Safety Administration was busy last week hosting three public comment sessions across the country on its driver distraction guidelines. The guidelines discussion were attended by auto makers, but NHTSA needs to reach out to a wider constituency including wireless carriers, handset makers and app developers.

These hearings follow, by two weeks, NHTSA’s announcement of delayed rule-making for a long-anticipated back-up camera mandate. The two issues are related since the back-up camera mandate will require a large center-stack display and the driver distraction agenda is intended to limit whatever else auto-makers may wish to do with that display. The back-up camera mandate came about as a result of a combination of legislation and extensive research by the agency. (NHTSA – Notice of Proposed Rule Making - http://1.usa.gov/g58Tyh) The rule-making is projected to save approximately 100 lives annually with an estimated cost to the automotive industry of $1.9B-$2.7B.

The link in the previous paragraph to the US Department of Transportation Website provides all of the relevant insight and analysis behind NHTSA’s back-up camera decision. Many observers of NHTSA attributed the rule-making delay to election year considerations in the U.S. – the potential negative political fallout associated with the cost of implementing the mandate.

Whether politics entered into the consideration of the delay is less important than what the back-up camera mandate implies for the newly-commenced distracted driving debate. But, first, it is important to understand where NHTSA stands in its distracted driving deliberations.

The hearings last week were largely inconclusive and pointless and have likely spurred NHTSA to turn up the temperature. The industry representatives who testified before NHTSA representatives were not in a position to answer the single most important question for NHTSA: What are the automotive industry’s long-term plans for enabling mobile device connectivity in the car?

Car makers find it difficult to answer this question for two reasons. First, for competitive reasons car makers are loathe to reveal elements of their long-term strategy. Second, as far as connecting to mobile devices is concerned, car makers have no long-term strategy.

In the absence of long-term automotive industry planning, NHTSA announced its own plan for developing guidelines to cope with driver distraction: http://1.usa.gov/GANj5q.

The three phase process defined by NHTSA includes:

Phase I: Set two goals for ensuring that vehicle systems and devices do not distract or interfere with the safe operation of the vehicle. First goal is to reduce the complexity and amount of time required to operate devices and systems. The second goal is to disable certain types of functionality – such as manual destination entry for a navigation system.

Phase II: Proposed guidelines for the use of brought in devices of all kinds.

Phase III: Proposed guidelines for voice-activated controls for line-fit and aftermarket systems.

While all three elements of NHTSA’s plan are so-far described as guidelines with the corresponding voluntary industry adoption that that implies, the specter of mandates and rule-making is looming over the entire process. Any executive or observer who attended the hearings last week left with no doubt regarding the seriousness of NHTSA’s commitment to reducing driver distraction.

In contrast to the estimated 292 lives lost to back-over accidents in 2011, NHTSA has put a preliminary estimate of 3,000 on the number of lives lost to distracted driving. The agency has not yet been able to narrow down what portion of that figure can be attributed to the use of mobile devices or complex on-board systems, but NHTSA is working toward creating such a metric.

It is clear, though, that if the saving of 100 lives is enough to justify rule making, as in the case of back-up cameras, there is ample motivation for the agency to take action to mitigate driver distraction. The best news remains the fact that NHTSA has taken the voluntary approach that it has.

Unfortunately, the issue at hand in driver distraction is an ambiguous one fraught with conflicting philosophies and perceptions regarding human-machine interfaces and driver behavior. While a substantial amount of research has already been done and NHTSA has at least two studies already in process, the range of conflicting findings and methodologies suggest a lengthy process of discovery ahead for the agency and the industry.

At the same time, the back-up camera mandate will guarantee a wider deployment of large center-stack screens in cars in the U.S. and, likely, around the world. NHTSA is arriving somewhat late to a standards and guidelines discussion that it has brought about with its own rule making.

Implications:

Distracted driving is a problem all over the world. It is a problem that has existed as long as cars have existed. The proliferation of mobile devices in cars has contributed to the problem and may be contributing to additional highway fatalities.

Large displays are also proliferating in cars. Large displays are also increasingly perceived as an added potential source of driver distraction, depending on what kinds of functionality are enabled. At the same time, car makers, handset makers, wireless carriers and app developers are looking to smartphone integration and connectivity to the larger in-vehicle display as a means to reduce distraction and limit, manage and control use of the mobile device in the car.

The auto industry is embarked on a journey to a new in-vehicle experience which will increasingly be defined by connectivity to off-board resources. This connectivity experience will encompass the integration of personal driver information – largely derived from the driver’s personal portable devices – vehicle sensor and map inputs and off-board resources such as weather or roadway information derived from other drivers.

Car makers and app developers are still working hard to determine how the output of this big data integration will manifest itself in the car to aid the driver and render the driving experience safer. Given the early stages of this application development, a light, guiding regulatory hand from NHTSA is what is most needed by the industry participants.

Hopefully, by its current efforts, NHTSA will establish a public policy framework for wireless carriers, application developers, wireless device manufacturers and auto makers to collaborate for the purpose of defining the nature of the driver distraction problem and agreeing on a solution. This means NHTSA needs to expand the scope of its current outreach and auto makers need to be more forthcoming about their plans.