18 Dec 19

Who gets to monetise fleet data?

If you’re ambivalent about Big Data, you’re not alone. It’s a security and privacy minefield – but it’s also a potential source of revenue. But for whom: OEMs, lease companies, corporate fleets, the drivers themselves?

Just a few years ago, road sensors, CCTV cameras and other static infrastructure were the main sources of mobility data. But smartphones and connected cars are adding billions of data points into the mix, enhancing its predictive power. This can help alleviate congestion, prevent accidents – and make money.

Scratch the surface
“We’re only just beginning to scratch the surface of this (data exploitation),” says Lisa Joy Rosner, the Chief Marketing Officer of Otonomo, a finalist in the 2018 Smart Mobility Start-up of the Year.

According to consulting firm McKinsey & Co, the market for vehicle data could grow to $750 (€680) billion globally by 2030. No wonder everybody wants a piece of that pie. The question is: who gets a slice, and how big will it be?

“It’s really about putting data to good use,” says Ms Rosner. “If you start with How can I sell this stuff, that’s not the right directive.”

In July 2019, Otonomo and Avis Budget Group announced they would be linking over 100,000 vehicles to Otonomo’s cloud-based marketplace of over 100 companies to turn data into revenue.

It’s one of many initiatives in data monetisation. Earlier this year, for example, Continental launched a blockchain-based data monetisation platform that will enable OEMs and other parties to exchange and monetise mobility data.

The initiative promises to break down so-called ‘data silos’, allowing data to be combined in order to generate new revenue streams – with blockchain-secured micropayments the ultimate enablers of data monetisation.

“For fleets, data is not just valuable, it’s essential,” says Dirk Schlimm, Executive Vice-President and Advisory Board Member at Geotab, a leading global telematics provider. It’s equally essential to distinguish the various levels at which that data can be useful and valuable.

Four tiers

  • In a first value tier, data is crucial for fleet modernisation and innovation, as well as for connecting fleets to digital services. 
  • A second value tier is in the aggregation of data and the insights that can be derived from it. These data-enabled insights range from predictive maintenance to safety analyses and minor accident detection. This is valuable for rental, leasing and carsharing fleets, and also for deciding how and when to switch to electric vehicles.
  • A third value tier is the public good: smart city traffic management (predicting congestion, selecting truck routes, managing parking, etc.) all depends on aggregating and analysing data. This is why large traffic and city authorities will need data analytics to remain manageable.
  • A fourth and final value tier is about transforming transportation and inventing new mobility models: carsharing schemes, integrated multimodal transportation (e.g. rideshare, bus, metro, rail) all depend on data from multiple sources.

Value creation
For all its value, fleet data should not be considered as just any other product or service to be bought and sold, warns Mr Schlimm: “The term ‘monetisation’ suggests data is traded like property. That’s not really a desirable business model. A good data business model is focused on value creation.”

In other words: data should be seen as an input for other value-added products and services, with the customer whose data is being used as the primary beneficiary. And it’s a complicated process, requiring exploration, preparation, cleansing, validation, privacy filtering and ‘productisation’ of the data – among other steps.

We’re still in the discovery phase of data monetisation, says Mr Schlimm: “It’s a long-term affair. One thing is sure: overly eager and premature monetisation can produce unintended consequences and lead to a backlash. Again, the better question is: How do I use data to better serve my customers and communities?

Digital gold rush
All of which still leaves one big question unanswered: Who actually owns the data? Is it the manufacturer of the connected vehicle? The provider of the connected service? The leasing supplier? The client? Or the driver?

“It’s no surprise that the ‘digital gold rush’ has led to many stakeholders claiming data ownership,” Mr Schlimm says.

“But the legal analysis of various property rights does not support this. The most thorough analysis we’ve seen – in the US and Europe – concludes that no one owns data ‘as such’ – or should own it, for that matter.”

That, of course, doesn’t mean there aren’t any important legal protections for data. Privacy laws protect the dignity and privacy of drivers. The owners of the data-generating devices (in this case, the vehicles) can invoke protection against unauthorised access or unwanted interference. And competition laws protect the free market in data generation.

Data interoperability
“Fleet owners – and other car buyers – will want data accessibility and interoperability, to ensure competitive pricing and access to data-driven services,” Mr Schlimm says. “In particular, they need open ports to install brand-agnostic telematics and fleet management technology. In that respect, right-to-repair legislation will play an important role and must keep pace with the development of the digital economy.”

So, who will win the race to monetise fleet data? Simple: “The company that creates the most value, wins the trust of its customers, and enables the ecosystem at large. Data does not need to be hoarded or ring-fenced to create value - in fact, the opposite is true: ‘open data’ has the greatest value potential, for both individual companies and societies as a whole.” 

Do you want to know how connectivity can benefit your business? Attend Fleet Europe’s Connected Fleets Conference (28-29 January, Brussels)

Authored by: Frank Jacobs