The Promise and Peril of Telematics
By Mark Frauenfelder, Thu Jan 29 11:00:00 GMT 2004

In the next few years, new cars will be sold with Wi-Fi, Bluetooth, GPS, and cellular systems in them - and that has some big implications for privacy.


Most people have already had a taste of wireless cars by riding in one that has a GPS navigation system. Whenever I rent a car from Hertz, I request the NeverLost option -- a GPS system that has a color flat panel display and a sound system that tells you how to get where you need to go. The extra $8 a day they charge for NeverLost beats driving around the outskirts of an unfamiliar city at night with an unfolded map in the passenger seat.

I am looking forward to wireless cars, but there's one thing about them that makes me nervous. It's called telematics. Simply put, telematics is a wireless technology that allows remote monitoring of vehicles on the road. Using a combination of a GPS system and a cellular transmitter, telematics can report on a wide variety of data about a car's condition, location, and speed.

One of the good things about telematics is Automatic Collision Notification (ACN). It can save lives, and lots of them. 42,000 people in the United States alone die in crashes every year. Of those, 20,000 die before they make it to the hospital. The rest arrive in the emergency room after it's to late to save them. According to medical studies, there's a ten-minute-window between a serious accident and receiving proper medical treatment that often makes the difference between life and death. Properly used, ACN could prevent thousands of casualties a year.

Today's commercial ACN systems only report on the location of a crash and whether or not the air bags were deployed, which makes it hard for 9-1-1 dispatchers to know what kind of emergency response team to send to an accident scene. But Veridian has developed a much more sophisticated system for the National Highway Traffic Safety Administration, which is being tested on 500 police cars in Texas. When a car equipped with Veridian’s system is involved in an accident, the GPS will log the exact point where the collision occurred and where the car ended up (which could, in the case of a collision near a steep embankment, be quite a distance away from the point of impact). Sensors embedded throughout the car will measure the force of the impact (along with what part of the car got hit) and whether or not the car rolled. Within seconds, the ACN system will automatically place a call to 9-1-1 (even if the occupants are unconscious or unable to access their phones) and report on the location and type of accident, enabling the call center to dispatch the appropriate response.

I can’t argue against Automatic Collision Notification. But there’s another side to telematics that gives me the creeps: remote spying. It’s already happening with rental cars. Unless you read the fine print on your rental car contract, you might not know that your whereabouts and driving habits are subject to remote monitoring by the rental company. According to a recent New York Times article, Acme Rent-a-Car in New Haven, CT fines its customers $150 each time they drive faster than 80 miles and hour for over two minutes. One hapless customer got nailed for $450. Sure, he shouldn't have been speeding, especially in a car that didn't belong to him. Maybe he deserved to pay the fine, but here's the problem: this kind of monitoring will be irresistibly attractive to car insurance companies. It's not hard to imagine that carriers will begin to offer a rate discount to people who agree to let their insurance companies access their cars’ telematics systems. Anyone who doesn't want to submit to telematics monitoring will be out of luck, because rates without the telematics discount will be simply unaffordable. Telematics monitoring will become de facto mandatory. I don't know about you, but the idea that I'm under constant surveillance whenever I'm driving makes me very uncomfortable. I don't perform well under pressure. It's the kind of thing that could make me a worse driver, not a better driver.

The same New York Times article reported on the sad saga of a guy who rented a car in San Francisco and drove it to Las Vegas and the Grand Canyon. When he returned the car, he was hit with a bill for $3,405.05, when he was expecting to pay around $250. It turns out that his rental agreement said he'd be charged one dollar for every mile the car was driven outside of California, and the rental company showed him a printed map of the route he'd taken, generated by the telematics system

Again, this guy was technically at fault, because he signed the contract. But how often do you read the lengthy user agreements when installing new software, registering on a web site, or signing up for mobile phone service?

What do you think of telematics, and more importantly, what can people do to make sure they don’t become surveillance subjects in their own cars? Will hackers come up with ways to get around telematics snooping? Will the government pass privacy laws?