Driving your car on the open road may feel like one of your last bastions of privacy. That illusion has been shattered, though, by Kashmir Hill at the New York Times. Yesterday, Hill reported that General Motors and some other car makers sell detailed driving data gathered electronically to a data broker who then sells this information to insurance companies.
General Motors and other automakers sell detailed driving data to data brokers
Comprehensive Trip Data Collected
Driving data is collected with surprising detail. One trip in a Chevrolet Bolt, for example, recorded the duration of the trip, fast acceleration and hard braking incidents, speeding, and other data. The location details of the trip were not reported.
Insurers can then use this data to set individual insurance rates. If you drive faster and brake harder than your fellow drivers, you’ll likely pay more – whether or not you have any accidents.
Did You Opt Into Being Spied On?
Some automakers have “safe driving” programs their drivers can join. Hyundai, for example, lets drivers share their data and view their “Driving Score.” The company suggests this will help improve driving habits and that the customer can share the data with insurers to get a better rate. The program description emphasizes the benefits of participating and never indicates that a driving score might result in higher rates.
The Hyundai Driving Score page indicates the program is “currently undergoing updates for improvements” and that customers will be notified when it is available again.
Hill’s article describes multiple situations with General Motors drivers who didn’t knowingly opt into sharing their data but whose data was still being collected and sold. She tested the enrollment process herself and found no warning that the collected data would be sold to third parties.
Data Brokers Sell Your Data
Auto companies most often don’t sell data to individual insurance companies. Rather, they deal with data brokers who act as intermediaries. General Motors participates in the Lexis/Nexis Telematics Exchange program. Another broker, Verisk, offers “Internet of Things and Telematics Solutions.” (Perhaps your internet-enabled coffee maker is spying on you, too.)
While auto insurance companies are the most logical customers for your driving data, presumably other types of firms could request it as well. Could life insurers or car rental companies find value in this information, for example? Attorneys trying to show a pattern of reckless driving?
The Price of Customer Trust
It seems clear that even customers who sign up for safe driving programs often don’t realize their data is being sold to data brokers. When they learn this, they feel deceived. People often feel very positively about their favorite auto brand, but selling what seems like private data creates mistrust.
According to Hill, General Motors revenue from selling customer data is in the “low millions of dollars.” There is little incremental cost in selling data you’ve already collected, so this revenue is mostly profit.
Looking at the bigger picture, though, these data sales make less sense. Last year, General Motors revenue was $172 billion with gross profit of $19 billion. Is losing the trust you’ve built with your customers over years (and generations, in some cases) worth a few million in extra revenue?
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