Smart city

How to monetise data from connected vehicles?

  • 22 Mar
    2018
  • 2 min

Few people nowadays doubt that the data gathered by connected vehicles is as valuable as pure gold. Provided of course that you can actually monetise it – which, according to a recent study by the McKinsey consultancy, is currently not all that easy.

The data collected by connected cars will be worth some $750 billion by 2030. This is the figure given by McKinsey in a report on this subject published in September 2016. More recently the business consultancy firm set out to discover why this valuable data is not being monetised to a greater extent. Its findings were published this month in a report entitled From Buzz to bucks - automotive players on the highway to car data monetization. The conclusions point to three main difficulties that are complicating the automobile industry’s task. Fully 84% of those who replied to the McKinsey survey reported difficulty in proving to consumers the value of the data so as to draw benefit from the use cases. Some 77% of the sector experts polled agree that some reorganisation is needed if they are to analyse the data in such a way as to be able to come up with new connected services. Last but not least, 79% of those surveyed express the view that forging partnerships is the key to creating new functionality based on the data collected but warn that doing so is not going to be easy.

Examples of how vehicle data can be monetised already exist. Israeli startup Otonome is working in this field. The company, which has created an intermediation platform for trading and selling data culled  from road vehicles, raised $25 million last year for its project to link up automobile manufacturers’ databases with a range of providers – insurance companies, city authorities  and franchise holders, to name but a few –  who are keen to obtain and use this type of information.  Otonome alters the format of the data, anonymises and encrypts it before forwarding it to the paying customers. This could prove to be a profitable market for carmakers and ten of them are apparently already testing out the solution.