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Article: Vehicle Telematics: Driving Consumer Value

Author: Peter Thayer, Principle, Cadmus Engineering

Submitted: March 2009

A brief overview of the telematics market would leave a viewer chagrined by both the hubris and failures of large organisations to deliver sustaining customer value.  General Motors absorbs millions of dollars in losses with negligible re-subscription rates in its US OnStar program. Daimler’s Freightliner ‘TruckPC’ platform was abandoned before reaching market.  Despite the huge investment in 3G telecommunications and the ubiquity of GSM, data-roaming agreements between European carriers is well above marginal cost and serves mostly to demarcate national boundaries. Will Vehicle Telematics remain a niche market served by a plethora of small players, or will vehicle networks become as accepted, expected, and standard as radios and air conditioning?

In brief:

  • Commercial Vehicle Value – What are the value drivers for commercial fleets?
  • Consumer Telematics Value – What are the value drivers for consumer automobiles?
  • Future of Telematics Ubiquity – What is needed for a telematics ‘Tipping Point’?

The value equation for commercial fleets is most apparent. Cross docking logistics, congestion charges, fuel costs, and delivery window penalties all make the need to accurately route and schedule a vehicle a core aspect of a successful fleet.  This enables commercial telematics solution suppliers to charge rates corresponding to the data charges, customised development expenses, and in-vehicle platform costs. However, the market remains fragmented with OEMs like Paccar striving to compete against after market solutions like TomTom WORK with none providing a full spectrum of functionality.   The consumer telematics market is nascent to non-existent in Europe, except in the broadest sense of telematics.   Real time traffic and speed camera feeds to navigation systems remain un-compelling applications except to the most hardened road warrior or early adopter.  Safety, security, prognostics, entertainment, and machine-to-machine data synchronisation are absent.  Both old and new technological changes from the need to restructure inter-carrier data charges, the machine-to-machine communication capabilities in intelligent highway networks, advanced metering infrastructure and changes on how the vehicle OEMs view telematics will control the rate of widespread acceptance.

What are the value drivers for commercial fleets?

OEM solutions for commercial truck fleets are doomed to failure as they best serve the interest of the OEM, not the fleet owner.  While tracking and messaging systems like Paccar’s DAF Telematics unit offer value to the fleet, OEM solutions are designed to tie the fleet owner to cease purchasing mixed fleets by controlling the fleet’s essential data.  The ability to mix and match vehicle platforms from vendors to the meet business needs override any possible integration advantage of an OEM solution.  The hubris in commercial telematics is the attempts by OEMs to control their customers by controlling their data instead of providing a common, open interface after market solutions can tie into and thus better serve their customers.

Aftermarket solutions provide fleet owners with the ability to maintain mixed fleets and move equipment to newer vehicles.  Fleet operations vary between companies and between fleet market sectors.  The needs of an LTL carrier differ widely between those of container, private, or FTL.  Even a small or medium size fleet has greater control over the software development roadmap of a small, niche telematics supplier than an OEM.

This paper attempts to synthesis the necessary but not complete list of what is required to achieve wider acceptance of telematics in commercial vehicles in a sustained, safe, and value producing manner.

  • Simplified, common integration access to vehicle bus communication.  OEMs need to standardise bus protocols for essential vehicle data such as vehicle speed, diagnostic faults, and fuel consumption across all vehicle platforms.
  • A standard interface to an OEM installed, in-vehicle display would decrease system cost and increase system safety. Most aftermarket mounting solutions become projectiles or ‘bayonets’ in a crash.  They clutter the cab and obstruct a driver’s vision.  OEMs would better serve their customers if they provided access to a cluster mounted display.
  • Commercial navigation and routing is paramount.  Routing systems need to accommodate gross vehicle weight and load characteristics in their algorithms.  Road repair and closure information needs to update real time.
  • The customisation and automation of two way messaging is required. A driver should not need to enter an “arrived at destination” or “delayed in route” message.  The system knows when the driver has arrived at the dock. The system knows, preferably coupled with the diagnostic fault code, when a vehicle is delayed in route.  Few messages need driver interaction jeopardising safety.
  • Fleets need better fuel and utilisation information.  The knowledge of which drivers and vehicles achieve the best ROI per litre of fuel benefits the entire supply chain.  The ability of a fleet system to provide real time Engine Control Module calibration updates based on load, terrain, and route altitude would further fuel saving efficiency.
  • A standard interface to trailers, reefers, RFID readers, and other 3rd party devices would improve supply chain efficiencies and equipment utilisation. A reefer should be able to signal to the fleet’s management portal that it requires service without requiring a completely separate data channel and application.  A trailer door equipped with an RFID reader should be able to transmit load information through the in-vehicle telematics device without requiring a separate data path.

These claims for a value driven commercial telematics platform rely on vehicle OEMs providing integration points. The engineering costs for developing these interfaces is far less than the money Paccar, Freightliner, International, MAN, and others have spent developing their own telematics solutions in an effort to build a competitive barrier and reduce their customers buying power. It is difficult to see when the OEMs will embrace the aftermarket telematics community and assist their customers in providing real value.

What are the value drivers for consumer automobiles?

A sustaining value equation for individual consumers is harder to garner than for the commercial market. OnStar’s “Safety and Security” tagline resonates more with GMs ageing, risk adverse customer base than in the young consumer market car manufactures are desperate to acquire.  The young, urban professional with buying power is attracted to social networking, productivity, entertainment, and convenience.  In the last two decades, a car has moved from a simple transportation device to a social extension of the owner.  A bright red, Ford F100 pickup truck navigating through the narrow lanes of Grasscroft makes a statement on the owner as does the rugby player unhinging himself from the front seat of his Mini. 

In one respect, achieving wide acceptance and sustaining value in the consumer market is simpler than in the commercial telematics market. In the consumer market, OEMs can succeed.  A car buyer is not concerned if the telematics system in the vehicle is data compatible with other vehicles in his fleet.  He may buy, or not buy, based on the user characteristics of the system.  However, one problem readily observed by those who refuse to trade the elegance and simplicity of their TomTom interface for the cumbersome in-car navigational system of an OEM, is the tendency of the OEMs to recruit lawyers and accountants to perform user interface design instead of artists, dreamers, and visionaries.  This will be a habit difficult for the OEMs to break.

This paper attempts to break the mould on what a networked car could look like. Car consumers cover an infinite array of likes and dislikes, needs and desires.  The solutions to a sustainable, consumer telematics platform are equally infinite.  What could a solution look like?

  • In-car navigation works.  Garmin, TomTom, and others enrich themselves in this market.  In the narrowest sense, navigation plus real time traffic is a base telematics system. Alone, this one application covers the cost of the hardware and navigation database.
  • Hands free phone also works. Hands free services provide a safer roadway and help offset the hardware expense.  An obvious safety and convenience improvement would be to couple active speech recognition with better address book synchronisation for hands free dialling. 
  • OnStar’s ‘Concierge’ service couples route assistance with the ability to contact a vendor (hotel, restaurant, garage, etc.) en route. This is done through an expensive human to human call mechanism.  Attempts to provide this through a voice to machine interface have been cumbersome and intellectually apathetic.  Adaptive machine technology is well advanced. A machine can learn an operator’s preference for a particular brand of petrol or chain of hotels providing a better pool of suggestions. In aggregation, this preference information becomes valuable to the telematics supplier.  A web portal where the user is forced to select and unselect preferences is a tedious and unnecessary practice.
  • Safety and security should not be forgotten. We purchase insurance to mitigate our “what if” risk.  A system which reports airbag deployment to a public security access point is a “nice to have”, if not cost justified, feature.
  • It is difficult to imagine how forgotten entertainment is in consumer telematics.  Today, consumers pay over £20 per month for the choice of satellite radio. Books, music, and news are downloaded to MP3 players and supplant traditional vehicle radio systems.  The utilisation of 802.11 or UMTS networks to supply the latest BBC podcast have value to both the telematics consumer and the broadcaster.  Podcast advertising can be micro-targeted to the telematics subscriber.   BMW could outshine iTunes by providing a “Buy Me” link between the car radio and telematics platform.
  • Viewing telematics vehicles as a network of sensors instead of an endpoint for data would improve road safety and the driving experience. The engagement of traction control on a forward vehicle should inform following vehicles about ice on the road. Vehicle speed, consistently below the posted limit for several vehicles in proximity, should update the traffic database about congestion.  Traffic data can be sold by the telematics supplier.
  • Wildblue has established a reputation of unparalleled customer service excellence by analysing performance metrics of its customer’s equipment and providing proactive support. A vehicle OEM could grab instant customer loyalty by receiving Diagnostic Trouble Codes (DTCs) over the air and alerting the customer in real time about performance degradation and the nearest OEM repair shop.
  • As avatars and social network sites claim a greater portion of our wallets and our times, it is not difficult to imagine an intersection between our cars and our virtual world.  Marketing behemoths like Sony attempt to provide branding within their managed virtual space.  Conceptualizing a game where the daily, two-dimensional movement of our cars is imbued with avatar-like characteristics provided in virtual space may be off the wall, but the intersection exists.  Cars have become as much a part of our individuality as our web persona.  Vehicle personalisation is key to OEM market growth.   Telematics enables OEMs to merge the iron of a chassis with the virtual reality of the web.
  • A value equation for consumer telematics exists.  The value does not lie in one domain, such as safety and security, but in combining basics such as navigation and diagnostics with our love affair of making our vehicle make a statement. Vehicle Telematics enable machine adaptation and personalization to an unprecedented level.  OEMs can control and benefit from this metamorphosis if they leave their outmoded ideas behind.

What is needed for a telematics ‘Tipping Point’?

The major obstacles to telematics have been bandwidth, bandwidth cost, the cost of the in-vehicle platform, and functionality.  Qualcomm become the large technology conglomerate it is today by providing a satellite uplink platform to commercial trucks for messaging.  Qualcomm’s investment and intellectual property in CDMA/1XRTT and WCDMA/UMTS has opened new possibilities in telematics systems.  Bandwidth, and - within regional boundaries – bandwidth cost, are no longer the issue.  A hardened vehicle platform that survives the environmental extremes of an automotive environment remains a barrier, but it is a barrier supplanted by a number of companies.

The functionality value equation will become easier to solve as new technologies become every day aspects of our lives. Several of these technologies are listed below.

  • Intelligent transportation systems, lane departure, adaptive cruise control, and other vehicle technologies aim to make control of the vehicle on highways more automated.  A ‘platoon’ is a data linked line of cars autonomously following a lead vehicle.  Platooning can improve fuel economy by 20-25% and doubles highway capacity.[1]  Cars and highways of the future will require a robust data path between vehicles and roadway.  Tomorrows navigation systems will need to interact with the vehicles autonomous system for lane entry and exit.  A driver less burdened on driving tasks will demand a network connected environment for information similar to their home or office.
  • Technologies such as Advanced Metering Infrastructure (AMI) and Digital Living Network Alliance (DLNA) will provide greater integration of our appliances and our lives.  Part of the goal is energy and greenhouse gas reduction.  A home heating system, that knows when you are approaching home can produce the same level of comfort more efficiently.  A ‘bot, knowing both your refrigerator content, your travel plans, and the best deals on the Internet could simplify your shopping.  A grocery store could exist as drive through attached to a warehouse freeing parking and store display real estate.
  • Wireless protocols are becoming more widespread and accepted.  The Bluetooth consortium was initially panned in the media because of missed launch dates and expensive hardware.  Vehicle OEMs that built business plans around subscription fees for in-car, hands free phone systems looked like sulky children when Bluetooth interconnectivity and freedom of subscription choice drove the market.  Zigbee may not be robust enough for an ABS or SIR data link, but Zigbee could certainly handle DTCs, vehicle speed, and fuel consumption data.  Moreover, vehicle weight would be reduced, assembly simplified and reliability enhanced by reducing wiring harness complexity.
  • Media and advertising models are changing.  One of the highest growing advertising industries is in micro advertising.   Instead of purchasing a block of airtime during the United match, a beer manufacturer could target the advertisement to the individual and time when it would be most effective.  For example, targeting beer advertisements in a pod cast after the vehicle has left the local gym for males between 20-25.  This information is readily known by today’s navigation systems, but it sits at the endpoint and isn’t used to further the value stream.

When a technical ‘tipping point’ will be reached, in telematics, remains opaque.  Barring legislative or an OEM consensus on the market, technology, interfaces, and approach, telematics will follow other technical changes rather than drive those changes.  Solutions will continue to be cobbled around existing technologies and interfaces rather than top down incorporation into design.  This sub optimal approach will yield less dynamic applications at greater cost.

The goal of this paper is to illustrate what could be in telematics and potentially offer a roadmap to obtaining that goal.   The industry, including vehicle manufacture, content provider, and telematics supplier needs to think past narrow special interest and seek a bigger piece of the market by making the entire market bigger.  This can only be accomplished by realising the end customer establishes the value.

Commercial vehicle OEMs have failed and will continue to fail in developing and deploying telematics portals if it is viewed only as a way to tie the fleet customer to a particular brand.  An open platform provides consumer choice.   Consumers will naturally gravitate towards the open OEM platform that offers the widest variety of applications and services.  By co-operating with the aftermarket telematics suppliers an OEM ensures its own success.

Consumer vehicle OEMs have a different problem.  By rights, the automobile OEM should control the hardware and the telematics portal.  Their difficulty lies in developing functional user interfaces and applications.  The reoccurring revenue stream and customer engagement well after the vehicle leaves the showroom should indicate to manufacturers this is an imperative to rescue them from the cyclic nature of their business.  A brief survey of cars on a London street where TomTom and Garmin devices obscure the dash while the onboard navigation system sits idle should affirm to the OEMs that they don’t ‘get it’.  We are well past the days when car guys could dream.

[1] “Vehicle Platooning and Automated Highways”, California PATH, 1998


Article: Vehicle Tracking and the THE HUMAN RIGHTS ACT

Author: web source not attributed

A number of people have asked whether the Human Rights Act 1998 (“HRA”) will have an impact on them when they fit vehicle tracking Systems into either employees’ vehicles or hire vehicles.  In response to this concern, a leading barrister in the Human Rights field advised of the following issues for consideration.

Introducing Vehicle Tracking to Employees

Employees working for private companies will not be directly affected by the HRA.  However, whenever you change employee’s working conditions, you need to take care to ensure that you do so lawfully.  It is advisable that you seek your own legal advice in relation to this as every company’s employment contracts are different, but the following advice may also assist.

Where you are fitting a VEHICLE TRACKING System into a vehicle used only for business, such as lorries or vans, it is recommended that you inform the employees driving the vehicle of the fact that the system will be fitted, why it is being fitted, how it works and what the data you collect will be used for.  The employee will then understand the full ramifications of the information that will be provided from the system and why you want that information. If employees do have objections, you will clearly need to discuss the objections with them and try to reach agreement on fitting the system.  If you can’t reach agreement and consequently want to change an employee’s job or dismiss him, you should obviously seek legal advice.

Where you are fitting a system into a vehicle provided for work and personal use, you will have the same considerations as are detailed above.  However, you also need to take into account that the system will provide data on the vehicle’s movements outside working time.  Employees may be concerned that this data would be used by you to obtain information about their private lives.  If that were to be the case, this could constitute an infringement of their human rights.  As such, it is would recommended that it is made absolutely clear that the data collected by the system will only be accessed in so far as it relates to working hours, unless the vehicle is stolen or in an accident.  You should also inform employees as to who will have access to the data – clearly it should only be utilised by those persons having a business need for the data.  Again, if employees are unhappy about the fitting of the system, you should always seek legal advice in the specific issues of the problem.

Where you are recruiting new employees or introducing new contracts of employment, there should be clause in the contract which allows you to fit and/or use the system in any vehicles provided by you.

Vehicle Tracking and Hire Vehicles

If you are fitting VEHICLE TRACKING Systems into hire vehicles, you should notify the hirer of this and put acceptance of the existence of the system into your standard terms and conditions.




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