Shift Magazine - June 3, 2019 - 6

REINVENTING

THE WHEEL
Lessons learned from other industries
BY SEBASTIAN BLANCO

hile the auto industry is
embracing big data and its
opportunities for new services and deep insights,
auto companies are wary of security
risks that could spark a costly backlash.
Automakers can learn a lot from other
industries - such as financial services,
utilities and health care - that have long
been traveling this road.
As California's three investor-owned
utilities - Pacific Gas And Electric,
Southern California Edison and San
Diego Gas & Electric - introduced smart
meters to their grid a decade ago, they
worked with the state's Public Utilities
Commission to develop rules to protect
customers' privacy and security.
Their approach set the bar for best
practices surrounding customer data,
given that there is no U.S. law that
covers data privacy the way the General
Data Protection Regulation does in the
European Union, said Neil Strother, principal research analyst at Navigant.
Automakers would be smart to follow
the guidelines in the California rules,

shift * june 2019

such as data minimization, transparency
and some customer access and control
of their own data, he said.
"It's not that the laws don't matter,
but I really think it comes down to the
companies," Strother said. "It's a balance of trust. Customers trust Amazon or
Google or Ford with their data, and from
a Western, legal perspective, if the companies screw it up, the courts are open."
Drivers want to feel that their connected cars are guarding their privacy,
just like they protect passengers' bodies.
The amount of information that companies can get about their customers,
especially with machine learning, is very
powerful and must be handled carefully,
Strother said.
"The onus is on companies to get this
right," he said. "Consumers, in general,
want the benefits of connected technologies as long as their privacy and security
are not abused. It's a daily battle, if not
hourly."
Automakers could also look to the
health care industry as a leader in determining who owns the data collected from

a connected car, said Gaurav Tripathi,
chief technology officer of Innoplexus, an
artificial intelligence solutions provider.
"Data ownership needs to be with the
party who owns the car, or else it will
lead to a short-term boom in data sharing
that eventually ends in a mess of litigation," he said. "Health care is the perfect example. Nobody now doubts that a
patient owns the data."
Spending money on smart systems
upfront makes sense, because the
potential dollar value of all of this data is
immense.
Once more insurance companies,
transportation providers and customer
services get involved, Tripathi said a lot of
value is going to be unlocked.
"The examples are clear from [financial technology]," he said. "Earlier, only
banks were supposed to be the custodians of everything related to money. Now
just look at the size of business that fintechs have built all around the world by
unlocking the value in data. The same is
happening in health care, although much
more slowly than in fintech." n

Shift Magazine - June 3, 2019

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