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Here's How Your Car is Becoming the Next Big Data Collector

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Data collection has emerged as one of the hottest technology-related debates of the decade. Consumers are becoming increasingly aware that governments and corporations are watching and recording everything that they do online, and many aren’t happy about it.

These critics now have a new source of data collection to be weary of: the automobile. More and more new cars are connecting to the internet, and whenever something goes online in today’s world, you can bet that its data is being collected and stored.

The debate about what companies should be able to do with this data—both legally and ethically—continues to rage on, but big data is now a big business that shows no signs of slowing down.

The Connected Car

According to a recent report from the Associated Press, just under 20% of new cars sold globally are connected to the internet. However, that number is expected to grow quickly and could reach up to 75% by 2020.

Confused about what kind of data your car could be collecting? Well, think about all the things you can do in a brand-new vehicle. Cars that connect to the internet have advanced mapping systems, built-in music streaming, and even automated driving controls.

That’s just the technology that’s available today. Very soon we’ll have fully autonomous cars, which means vehicle-to-vehicle and vehicle-to-infrastructure communication. We’ll also start to see intelligent maintenance and weather monitoring.

Starting to see how this all comes together? Remember, when you do these types of things on your mobile devices and computers, companies like Facebook , Alphabet Inc. (GOOGL - Free Report) , Apple (AAPL - Free Report) , Amazon (AMZN - Free Report) , and Yahoo are watching and learning. These brands use your data to learn more about you and your online habits in an effort to target you with relevant advertisements and products.

Your driving habits are becoming the next big thing for companies to learn about you.

The Benefits

Before we get too scared of “big brother” joining us in the car, we have to look at positives of vehicle-based data collection. Researchers from McKinsey pointed out four main areas that drivers could benefit from increased data tracking:

1) Safety: Data tracking should improve safety by allowing for automatic emergency calls and on-site accident data for first-responders.

2) Time: By keeping track of the roads we take, new cars will be able to reduce the amount of time we spend driving and parking by finding optimized routes and open spots.

3) Convenience: Increased data collection will improve predicative maintenance capabilities, which should result in less breakdowns and costly repairs.

4) Cost: More data tracking will increase the availability and effectiveness of pay-as-you-drive insurance.

The Risks

Although the McKinsey report shows us the potential positives of car data collection, the researchers were also careful to point out the dangers of collecting drivers’ data.

“As Data becomes a currency, building and sustaining customers’ trust will become a critical capability for industry players,” the firm said.

McKinsey’s basic argument is that the pros of data collection must outweigh the cons if car companies want to keep their customers happy. People are willing to sacrifice privacy and allow for big data collection if they are also seeing some sort of benefit from it.

This benefit has to be clear and obvious, because the risks definitely are. At the end of the day, we are talking about a massive amount of raw information about the habits of people: where they drive, where they live, what they see every day, and what locations they frequent. This type of information is exactly the kind of information that is targeted by hackers and could be used for identity theft.

Data for Sale

One of the big critiques of big data collection surrounds the practice of selling user data to third-party companies, especially when the user is not informed of it first. Just as this information is appealing to hackers, it’s appealing to businesses that are willing to pay cash to learn about potential customers, and that makes data a business in itself.

Luckily, it looks like drivers are protected for now. According to the AP, most car companies agreed not to sell user data without permission when they created the Alliance of Automobile Manufacturers in 2014.This agreement was signed by 20 companies, including Ford (F - Free Report) , General Motors (GM - Free Report) , Toyota (TM - Free Report) , Hyundai , and Daimler’s Mercedes-Benz.

Bottom Line

The most important thing that consumers can have right now is awareness. With the sheer amount of personal information that is being collected about people every day, being a smart consumer means being aware of the benefits and risks of data collection. The public has become more aware of big data online, but now we have to realize that big data is a part of our driving too.

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