Connected Cars Are Shaping The Future of Transportation: Highlights from the Noam on the Move podcast

Otonomo’s CEO and founder, Ben Volkow, recently appeared on Noam on the Move, a podcast hosted by Waycare CEO Noam Meital, to discuss how automotive data is influencing the future of transportation. Waycare is a traffic management company that uses Otonomo data from connected cars, in addition to other data sources, to create actionable insights and predictions to prevent traffic congestion and promote road safety.

The Noam on the Move podcast explores innovations and trends in the transportation industry through interviews with key leaders in municipalities and businesses. Otonomo is honored to share highlights from the podcast.

Q: How has transportation and mobility related to your personal life – either in the past or present?

A: You are talking to a guy that used to live in airplanes, whose home was the United Lounge. I was a heavy traveler all around the world. That is something that has changed recently. I don’t think that I have gone on a plane for six or seven months – that’s something I couldn’t predict.

Beyond this, my day-to-day life has also really changed. I used to commute much more, spend much more time on the roads, spend much more time in the city, using different kinds of mobility and that’s also changed heavily. We work much more from home, we spend much less time in urban areas, we travel much less. Zoom is replacing face-to-face meetings so there is a total shift in how we work. Everything has changed, and it takes some time to find a new normal. It brings some good things, it brings some bad things, but it’s definitely a change.

Q: Let’s discuss COVID. Once we have a vaccine and figure this out, will people go back to the way we were before? Specifically regarding mobility, are we going to go back to the same patterns of traffic, congestion, and all the normal habits? Or is there going to be a new normal? 

A: I think that things will go back to the old normal very soon. History shows that really things hardly change, the world turns around and things go back to the way they were before. Of course it will take time. Of course there’ll be some changes. But will people go back to traveling and flying and using micro mobility services or share Ubers together or rent new offices? In my mind there’s no question that they will. It can take a year, it can take five years, but my view is that things will go back to the old normal.

Q: What was the genesis for Otonomo? What was the impetus where you said, “alright, I need to start a company around this idea or problem”? 

A: I’ll tell you the story and hopefully I won’t get into too much trouble. So I was working for a big company called F5, which acquired my previous company, and there was a project with one of the German OEMs.

And you know, Israel is closer to Germany than Seattle, so I was sent in. And I found myself having fascinating discussions about the future of mobility and transportation, automotive data, and the cloud. I saw the same day-to-day questions that I saw in different markets. It was fascinating on one side, and on the other side, I felt like I could contribute. It’s what I had been doing for the last twenty years. And from there I think it was a couple of months until I resigned and went on a new journey with Otonomo.

Q: Why has the automotive industry taken so long to adapt to connectivity? Why now?

A: I think automotive connectivity has lagged behind other industries for a couple of reasons:

  1. OEMs are slow, they don’t take risks. They especially don’t take risks when it’s out of their comfort zone. And it’s completely logical. When I think of the internet revolution and connectivity, the car is maybe the last frontier to be connected. Offices, homes, hotels, airplanes, everything was connected before we got into the car.
  2. I think there’s also a financial side of things, automotive connectivity is very expensive. Building the backbone to store and manage the data is expensive. At the same time, the OEMs’ business is already working on 2-3% margins. It means that all this connectivity, with all the good things it’s bringing, is really cutting very deeply into already slim margins.

So I think it took them some time to really get the courage to do it. Because of the financial side of things and because it was out of their comfort zone. But today I think that the timing is exactly right. We see OEMs moving very, very fast into automotive connectivity. I think connectivity has finally been established.

Now it’s the next step: What to do with vehicle data. Building an ecosystem of services. Launching connected services around the car, partnering with partners like Otonomo, and getting deeper into the automotive data and how it could be utilized. For a long while it was sitting in the basements in Detroit, or in Stuttgart, or in Tokyo. And in the last few months we really see the basements opening up, data flowing out, and value being created.

Q: When you go to investors, often you say they’re looking for a 10x: something in which the value proposition of what you’re going to do is going to be ten times better than what exists today. What services are there today that connected vehicles can offer that would change our life in a kind of 10x type of fashion? 

A: So it’s a good question. You know that when I started the company I thought about  insurance and usage based insurance (UBI).  I thought about its tectonic change and I didn’t even understand how many use cases and services could benefit and be empowered by automotive data out there.

And one of the nice things at Otonomo is that we have so many interesting discussions with such brilliant people that come with amazing use cases for the data. I’ll give you a few examples.

Financial Services

  • Alpha: Automotive data could be a new source of alternative data to hedge funds or the Bloombergs of the world. You know they are always looking for the advantage, they call it the alpha. And even simple queries, like is the hotel parking or mall parking lot busier this week compared to last week, how many trucks are coming out from this agriculture area compared to last quarter.
  • Vehicle Loans: We work with banks that give you loans for vehicles. In order to reduce the risk, they ask you for your vehicle data. You pay less interest if you share your data. They want to understand the mileage, they want to see if you do the work on time.
  • Credit Cards: Giving a loan is exposure. One of the amazing use cases that came to us recently was a credit card company that came and said they have too many false positives. Too many people are being declined from getting a credit card because of something they had done 20 years ago. And they believe that there is a correlation between your driving style and your financial responsibility. So if you were declined, they will ask for your connected car data, and, with your permission, will monitor how you drive. And if you don’t speed up like crazy and you don’t do turns like Starsky and Hutch, maybe you’ll get this credit card.

Emergency Services

We work with this company that provides emergency services, so if you have an accident they will automatically send vehicle data to the emergency room. The connected car’s data can communicate the number of passengers, the speed of the impact, and even notify and rush the emergency vehicle to save on response time, and this saves lives.

Electric Vehicles

One interesting example that surprised me was an amazing project with an electricity company around leased cars. So if today you have a leased car from your employer, you keep your fuel receipts, you bring it back, and you get reimbursed for the fuel. What happens if it’s an electric car, and you charge at home? How do you get reimbursed? It’s your electricity. So we see how many kilobytes you put into the car – and the electricity company knows the cost of the kilobytes at a certain hour, and together we compile a report that you take back to your employer. It’s a problem that wasn’t around because there were no electric vehicles, today it’s a new problem.

Q: How does Otonomo’s work in connected vehicles affect the public transportation sector? 

A: So, I’ll give you an example that I think sits well in this domain. Today, there’s tax on fuel. If everything will become electric, the government will get less money from taxes, because people will drive less on cars that are based on fuel, they will move to electric cars. And I think we both agree that everything will become electric…in two years, five years, seven years, every new car in the end.

Now the governments are unfortunately smarter than us. Everywhere around the world there are discussions about moving to taxation that is based on mileage. You pay based on the miles you drove instead of the fuel you used. And the governments are doing it in order not to lose money when we move to electric vehicles. That’s one of the main reasons.

So this is an example of how automotive connectivity is very important, even for smart transportation or in urban areas, in order to enable those new taxation models because someone will need to monitor the car and see how many miles you drove so you pay the tax.

Q: That brings about an interesting question: how do you create a marketplace to ensure that vehicle data privacy standards are met? 

A: We take privacy very seriously. I think that we understood very early that in the automotive industry, unlike maybe in the technology industry, you cannot bend corners. There are no shortcuts and no discounts when it comes to privacy. The default is always that no data is being shared as “opt out.” And then there are different regulations if the vehicle data is aggregated or personal, if it’s a fleet, and of course the differentiation between different continents. And to make it even more interesting, there are unique data regulations for the auto industry. We make sure that we cross every “T” and dot every “I” when it comes to data privacy. I like to say that we work with privacy with the German OEMs. The Germans are very strict when it comes to privacy – notoriously strict.

So, yeah definitely things need to be done differently. You need to provide the right mechanisms but having said that, I think like everywhere, with a lot of power comes a lot of responsibility.

I always see myself as a driver and I want to treat people the way I want to be treated. I think all the regulation is good, it protects people’s privacy and data. It’s our automotive data. The OEMs are just custodians of the data. Just like our bank, our bank keeps our money and also takes some interest and money for it. And that’s okay, they work hard to secure our money. We view the OEMs the same way. They work hard to extract the data from the cars. They work hard to secure the vehicle data. They work hard to make sure it’s managed well. They should get something. But there’s no question, the data belongs to you and me. The drivers and the car owners.

Q: What is the next big thing on the horizon related to mobility and transportation that we should be thinking about? 

A: I wish I knew!

Let’s put autonomous vehicles on the side, I think it’s a discussion that we have all had an overdose from.

Electric Vehicles

I think electrification for sure. I think that it’s a real revolution, if you think about it, everything will be electrified. And there are so many challenges there. The infrastructure, it’s not yet at scale. The batteries, the technology, it’s not yet at scale. So I think that we’ll see huge developments in this area of electrification.

Road Safety

I think we’ll see a lot of things coming around road safety. I think that in the past, we were focused on how to reduce the effect on people in case of an accident. We focused on adding airbags and seatbelts, for instance.

Now it’s moving toward accident prevention. It’s not about saving the lives of those involved in accidents, it’s about eliminating the accidents – which requires a lot of data, processing power, and communication between cars. All of the “goodies” that we are starting to have on the table.

So I think those are two things that I found fascinating – road safety and vehicle electrification. And I’m sure there are many, many other things that we can mention. But those are two interesting ones that come to mind that I think are really tectonic shifts in the market of automotive data.

Click here to listen to the entire interview on Noam on the Move podcast.

You can read about the Otonomo and Waycare partnership here.

WANT TO LEARN MORE? 

If you are intrigued about how you can use  connected car data to accelerate into the future of transportation, we invite you to download one of our datasheets or contact us directly.

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