Toyota Connected - 2019 Re:Invent

I love this presentation a lot, very inspiring, so decided to spend a little time to create transcribe to this great presentation.

Source of video was from re:invent 2019 which was uploaded here. in Youtube.

The official case study can be found here

Brian Kursar (CTO Toyota Connected) presentation start at 19:47.

Q: When was it started?

A: About 2 years ago, Toyota President, Akio Toyoda presented that Toyota began transformation from automotive company to mobility company. To do that Toyota focusing on 4 primary areas: "Connected," "Autonomous/Automated," "Shared," and "Electric."

Q: What will you share today?

A: I will share about shared and what we have done within that space. With "shared" we're really looking at creating a platform that will be able to address the changing world because the reality is that the world of automotive is changing. So in the past companies made cars they sold these cars to customers in the traditional retail process creating a one-to-one relationship with the customer. The car created value for one customer but today companies are now providing mobility services and offer these services to customers in new ways and this is really creating a one-to-many relationship with a multitude of customers which now begins to refine or redefine value for these customers.

A lot of things have changed but many things have not changed, the basic customer expectations: the value must exceed the price and the experience must exceed the frictions of use. It has to be easy, seamless.

you know today we see a lot of things happening in the media entertainment space, we have this this new segment called cord cutters, where people that have been using cable TV for many many years right they no longer want to commit to three years for cable TV; so very much like the folks that are migrating away for cable-tv to services like Hulu and Netflix right and Disney Plus similarly were finding segments with an automotive that there are almost exactly the same right folks that do not want to commit to buying a car, so we actually call these key cutters and within this segment we've now done the number of studies and we've been able to find out a number of things that I think really resonated with us when we did this study.

Q. What was the result of the Study?

A. So first and foremost these this segment views car ownership as an inconvenient waste of money but in some cases necessary. They want to take mass transit or share services over everything else and within this segment it accounts for 24 million Americans that are completely unserved by automotive. Within this segment we've decided to address and we are now looking at how can Toyota come and really provide a service to these 24 million Americans.

Q. So what did Toyota do?

A. So in 2017 Toyota connected partnered with Toyota Surf Co of Hawaii and we launched a car share platform that allows you an easy way to get in and out of a car when you're visiting the island of Hawaii.

so here's a quick video that shows you our 1.0 version of the application. (video in minutes 23). Drivehui.com

HUI was really our first 1.0 mobility services platform that we launched to really kind of address this need but through this journey one of the things that we overlooked was scale.

now from a technical perspective we had no problem scaling, what we did have problem with though was scaling from a financial perspective. We designed this platform very much how you would design platforms back in 2015 where we had really done all of our big data to date on on-prem. After about two years of development we were stuck with a platform that really couldn't scale technically as I mentioned, or it could scale technically by adding additional clusters and it see two instances but it could not scale financially. What we had to do is we had to start looking at how could we optimize our mobility platform

We came across some very low hanging fruit initially, the storage and the transmission costs were out of control and so we did it some deep dive and what we realized was that some of the data, actually a lot of the data that was being captured was quite useless. For instance when a vehicle transmits an open-door status at transmit some one and then when it transmits a closed-door status it transmits a zero, pretty simple, well what was happening was a device was actually sampling this every 200 milliseconds and you're now getting a 1 every 200 or only when the the person jumps in the car is zero when it closes it and it's actually transmitting those zero.

MUDA in Japanese is our word for waste

and so what we did was it was very easy, to just change some settings on the device and capture what we call near constant values on change and so by doing that we reduced it to about 99% just from what we were previously storing and that was a huge savings on the the storage. On the compute side we also had a pretty big problem. When you are when you have hardware on prem you don't really think about things like how much the hardware cost because well it's on-premise so when you design that way, in the cloud you get set up with a platform that really can't scale

For instance if we looked at our 1.0 platform, I like to call it the always-on platform, and so 1.0 it didn't matter if you had one vehicle or hundred thousand vehicles it still cost the same and the analogy I always used is like it's like buying this massive parking lot but only parking a single car in that lot so.

What we did was we started diving down and some of the things that would seem pretty obvious didn't really hit us, like so for instance people when they drive and whether they're using our car share services or they're just using some of our safety services. They drive a lot in the morning when they're going to work then you start seeing at peak towards night when people are going home and then at towards like the wee hours of the night like 3:00 a.m. people really aren't driving as much.

When you have persistent clusters you have all of this waste. We really just thinking of how we could reimagine what our next generation are our MSP of our mobility services platform version 2 would look like, it really became pretty obvious

I grabbed the engineering team and we got into a room and I gave them just some very simple directions.

I said "guys look, every message transmitted from a vehicle must provide purpose, it must have a purpose. it must provide quantifiable customer value right and be processed if and only when it was needed".

It may seems pretty straightforward but as you're designing a system you have to start thinking we now live in an IOT world where every single bit counts.

When you multiply that across millions of vehicles, it will starts just escalating in terms of the cost and so the way to manage that you've got to just kind of harness that and really ask the question. Why are we doing this? what is the purpose behind this?

Some of the great things about AWS is that we have options.

The first one around we actually hit we said well you know well we have this system it works really well it just is very expensive. What if we went and we started putting everything in reserved instances which which everyone likes but you have to make a commitment and so some of the hardware specs that are out today, three years from now you can process four to five times as much and also taking a very bad design and putting it into a reserved instance situation really isn't a great idea.

Then we said okay well what about spot instances? and so we really like spot instances. this is for our analytics we get to save sometimes up to 80 to 90 percent off but the thing is is that they're not there when you need them, they're not on demand.

Things like our location services which are very important to our fleet customers really would not work for spot instance.

Finally we settled on serverless and serverless is really exactly what we were looking for and it actually reminded me of something that we learned as we were going through at Toyota history training.

A very famous engineer at Toyota Motor Manufacturing and one of the founders of Toyota's just-in-time production system. Taiichi Ohno is credited to be the father of the Toyota production system which inspired lean manufacturing in the US and the system has a very straightforward framework, which is the just-in-time production framework that says

make what is only one is needed and only in the amount that is needed

and that went with exactly what I was thinking in terms of how I'd like to imagine our next generation mobility services platform.

By doing this it actually took our platform to the always-on architecture with many many persistent clusters, they're having to spin up these multiple clusters to, where you have this mark massive parking lot and only one vehicle park there, to a conceptual there is no parking lot and the moment that the vehicle enters the lot, the space appears, the vehicle goes away and it's gone.

To do this from a practical sense we started off with our IoT platform.

The first thing that happens is, it actually hits consent management. We do not pull vehicle messages unless the customer consents to that connected mobility service. Next we hit the the API gateway lambda we then run it through Kinesis, lambda to take the message process it, do the transformations make determination on what is this here for, is there a purpose, if there is it continues down to the next level where we now do a transform and decode. We then put it in various layers depending on how we're going to be using the data if we're going to be running analytics. If it will be in a aggregation partition, if it's being used to compute a driver score it will actually go in there, if it's not then it'll go into a different area

Always really maintaining the idea that this message is here for a purpose and if it gets to the point it'll go to our mobility services API.

Now you can enable it for our fleet and retail customers that have subscribed.

This was something that probably took about four to five months I think to really kind of re-architect and I gotta tell you the feeling I felt after we was quite amazing.

I don't know from the folks here remember back in the 80s there was this Toyota ad called "oh what a feeling"? well that's exactly how I felt because we literally saved millions of dollars moving from persistent clusters to serverless and so I think that was a great opportunity.

That's just on the data side. There was still a lot of things that we had not missed and a lot of things were as we did this platform for our Hawaiian dealership who we we realized that this was not something that we could take to the world. We had to really start thinking larger, bigger than just who we because the reality is is that most fleet companies they don't just have Toyota vehicles they also have Audi, they have Nissan, they have Ford.

I mean ideally they're only Toyota's, but since they're not going to be only Toyota's fleet, fleet companies are gonna be apprehensive when we try to say hey come into our platform which was a closed platform.

We have this really great relationship with Avis, they use our mobility services today and once we developed our digital key technology they said "that's great when can we get this into our platform" well we said "you know what we can give this to you tomorrow but you're gonna have to come in to our platform"

and they said "well yeah I don't think so. because the reality is is that it's now our customers, not a Toyota customer anymore." It is now an Avis customer when they are using an Avis app and they're gonna have an Avis experience.

It really made us rethink this idea of having a closed platform and what we we could do to ship from a closed platform to an open platform.

We now not just had B2C, we had B2C and we even had a B2B2C type of use cases that we had to work on and so to support this seems very simple but it was something that you just don't think about when you're building out a platform which is that customers want their technology anywhere and everywhere

that customers want their technology anywhere and everywhere

so whether it's a car rental company that is providing connected mobility services to their customers or maybe it could be a hotel that a Toyota dealership is partnering with that is putting vehicles in their garage so that a hotel customer can get in out of a Toyota vehicle as part of their vacation experience.

To do this we looked at what an open mobility services platform would look like and really it starts with the Toyota vehicle because at the core that's who we are.

We make cars and so Toyota and the vehicle and the vehicle technology are at the very center around that. Data access, Multimedia and the communication device are all part of that Toyota vehicle. Toyota connected now takes API management and the data coming out of that vehicle the access available and creates services so services like location health right or our micro-collision service access services.

We have two different types of access, one is our digital key the other is our remote access and so I like to differentiate these because I think it's kind of interesting.

remote access has been around for many many years, so you have been able to turn on your Toyota vehicle probably for about eight or nine years but the problem with remote access is that it requires connectivity. So to be able to ensure the safety of our customers and realizing that these do, you know one the many relationships, are going to have many people inside vehicles, we are now having to look at how do we provision a key to a person's mobile device and make sure that it works underground or places where there isn't connectivity.

On the Island of Hawaii there are actually places that have no connection whatsoever as you're going up into the mountains and looking at the volcanoes. Our device is able to provision that key and make sure that key is locked to that customers mobile device and allow them to get in and out of their car where there is no connectivity.

Multimedia applications will be now linking with that mobility experience as well as different type of safety services device, management services, consent management services and of course our API management and finally all of that is kind of a brought together within our mobility service portal as well as our subscription management portal to make sure that everything is consented to and that the services have been provisioned correctly

So when we design this platform we had to make the realization that just like digital key, right people wanted things like key is a service well, say you must now take these 15 services, we wanted to make sure that customers, can pick and choose the services that made sense for them.

Our fleet owners, the first thing that they say, when we say "hey you know what we have these great services to supercharge your existing fleet management and your loaner and your rental programs and we're here to help you" and some of them were actually pretty apprehensive they're saying "hey you know I'm not sure I want to really participate because if I'm gonna have 15-20 people in a car you know renting the car by the hour I may be concerned about liability and you know if someone's going to wreck the car, are they going to take the pictures correctly or they're gonna be disputes?" and we said "well you know what that's great, our data scientists at Toyota connected have actually developed something really cool it's called a micro collision and a micro collision really is what we're able to take out of the canned data to understand things that fall below the threshold of a airbag deployment. Things like bumps and scratches, we're able to actually tie right back to a reservation and that way you could know if you have 15 reservations who the person was that actually had that accident if the person after them did not report notice this tiny scratch or this ding on the vehicle.

This was something really I think cool that our data scientists came up with and is something that I've not seen in the industry and I'm very proud of to talk about today.

Just this idea that you use what you want and only what you want is really what we've gone for.

you use what you want and only what you want

Q. Who are the partners in this ecosystem?

A. I wanted to kind of talk through who the partners are in the ecosystem and what makes this ecosystem up. Traditionally, Toyota as a vehicle distributor they are also the mobility services owners, so part of MSRP actually goes into the mobility services of every vehicle. Now they sell cars to dealers who then in turn sell cars to customers, they also sell cars to third parties, Companies that specialize in car rentals such as Avis, enterprise, Hertz, budget etc as well as cars companies that do ride share so like New York taxi buy all of the Priuses through Toyota and the vehicle distributor. The retail brand customer that relationship is with Toyota headquarters, the vehicle distributor, as well as the dealership.

and so when we say a Toyota customer it's a person that's bought a car from a dealership. now in a sense right a third party such as Avis, they have their own customers and that's a rental customer and we want to be able to provide those services to companies like Avis because we want to make sure that every Toyota vehicle has an opportunity to maximize the utilization of that vehicle and the technology and that vehicle.

We want to make it easy, we want to make it safe, we want to make it secure.

The other thing is that we don't want to let our dealers down because our dealers also want to be able to provide rental services and so those same services we provide to our dealers.

We've seen some interesting changes in where there's now another party, this is the B2B2B which is what we call a station partner. Many dealers they will actually work with hotels airports, parking lot owners, to have their cars stay at the station partners and in some cases like a hotel is going to have their own customers.

The digital key technology extends to hotel customers as well so many hotels today will have an app and they recognize that the same exact use case is there for hotels and for travel and hospitality. A person gets off a plane they get to the hotel and the last thing they want to do is wait in line, the last thing they want to do is wait in line for 15-20 minutes just to get to a key.

They're enabling their customers to be able to get into the hotel, check in on their mobile phone, go up to their room and as long as the rooms ready, they get a notification saying that the rooms ready and they jump in their room and they relax.

We now want to extend that and say "hey well we get that this is a hotel customer, how about the concept of a keychain?" So after that person has rested for the night they are now wide awake and they say "hey you know what I don't want to do an Uber because I want to drive around the country. I'm going to take my time, I'm gonna check out some sites they look on their hotel app and here are five new Lexus vehicles that are right there for them to start using.

they can now go down to the garage, reserve that vehicle, jump in with that same app and now they have a customer experience that's all really contained within that hotel app.

It all ties back down to the mobility services that are provided by the vehicle distributor and the dealers that actually own those vehicles and want to make sure they protect that residual value.

Also monetize those vehicles so they get additional cycles out of that.

Now we start seeing things like B2C which is provisioning a digital key, B2B providing fleet management tools for our dealers so that they can enhance their fleet management, B2B2C which allows a third party to be able to take on use their own apps and then you got the B2B2B2C which is my favorite and probably most challenging which is now we're taking a partner of that dealer and providing the almost an SDK as well as the services to now complement their existing apps.

The first one right here right, as I mentioned very very simple, Toyota customer has downloads the Toyota owners app, a retail customer going to enable a mobility service of which is digital key. Digital key now is something that they want to either own on their own app or they want to be able to pass it on through to their friends and family and they're able to do that by using their Toyota one app and then consenting to the subscription and choosing who they want to be able to pass that to and then they use our mobility API management platform to be able to enable that service.

The next one is a little bit more complicated.

Our dealers, so focus here on this guy right here. So dealer owned vehicles, they actually have a reservation management system they, then also go through the consent and subscription management but it's that same Toyota customer with that same app now they have what we call the Toyota flex dealership flow which then allows them to now jump into either a loaner or a vehicle that they want to try out for the weekend or for a week at a Toyota dealership.

Where we get a little bit more complicated here is now that same dealer, right, so the dealer owned vehicles they now have a commercial agreement with the station partner, station partner has a station app developer, that goes into our mobility services portal, they then use the API management to then go and create a station app and then the station customer, once that's enabled and the vehicles are provisioned, can now check out vehicles through that app to really complement their hotel experience.

Fnally this is the the simpler version.

Notice here, right, we blanked this out because as I mentioned earlier, customers want their services where they want them.

A customer like Avis has what ,you may argue, the one of the greatest reservation systems in the world. They've been only doing it for 40 years and so of course we're not going to use ours. so they're going to now take their owned vehicles and they're going to use their own reservation app and run through the same flow where their developers are going to create an experience that is leveraging the Toyota mobility services but also providing them something that's very unique to their customers.

To do this is now what we call the mobility marketplace architecture version 1 is going to be launching at the end of this year and it allows fleet owners to then go through a API gateway, they will take a list of their vehicles and the first thing that happens, is it goes through a processing router, then to the data store writer that writes it to dynamodb. We use DynamoDB to be able to collect the latest status and provide up certs to now update that record based on the multiple validation. that we now run it through a number of queues so we throw it through the Amazon SQS queue.

where you can see there to validate that the structure correct, we also then check ownership ownership then goes back to the distributor platform so a record of authority, on whether or not the fleet customer owns that vehicle, can be checked back based on the what we call the retail sales record that's owned by Toyota Motor North America. Then we also do another check, to make sure once it's successful, we also want to check to make sure that now that owner has consented to these services.

Once we validate the consent of the services, we write then, what the subscription services are, that then creates a service availability API, which then is accessed every time a fleet owner tries to hook up one of our API services through our API service layer.

Going through all of that really is how we were able to architect a very flexible system that allows customers to really use what they need and choose the services and the many options we provide in our open mobility services platform.

so you know it's something that we felt that we need to do to make things very fast, scalable and provide both our engineers at Toyota connected as well as engineers at our partner companies options to be able to build their services and build the next generation of mobility applications out there. While we were doing, you know it's kind of funny, I was telling them that you know it's I almost felt like in a way we were almost making our own AWS right you know because it was using the same types of services the same types of options that are provided to AWS customers, not unlike you know what everyone uses today.

it's really that idea of saying, hey you know what rather than building apps we want to provide the building blocks to enable mobility and so with that's how Toyota connected is doing our part bringing mobility for all to Toyota customers and Toyota fleet owners.

I found this presentation is really an eye opening for me, on how we can think our next application and solutions can be architected, designed and build to support not just our direct customer and partners but also the ecosystem.

Great presentation by @brian kursar.