“Why would I want to own my car data?”

When I told my friend about a company called DIMO building products for drivers to own and control their vehicle and driving data, he responded, “Why would I want to own my car data?”

This is a pretty new concept and the answer isn’t obvious.?

So let me briefly explain why you would want to own your data.

From healthcare to grocery shopping to… everything we do, businesses and governments want our data. They use it to make forecasts, improve their services, and develop new products. Our data is valuable and businesses control it to drive profits.

Blockchain technology makes it possible for users (rather than companies) to control our data in ways that have not been possible before.?

User-controlled (rather than company-controlled) data marketplaces could disrupt every industry that collects data. For this newsletter we’ll focus on one category: cars. Car data includes information about the vehicle itself, the behaviors of the driver, and where the car goes.

DIMO co-founder Andy Chatham cites that nine out of ten people believe they own and control their vehicle’s data. But that is not the case. Car companies have assumed control over the data that internet-connected cars are producing. The apps that you use while driving own the data that describe your driving behaviors and vehicle locations.?

Right now, you don’t own your car data. You don’t control how it is used. You can’t sell it. The benefits you get are limited.

If you were to own your data, join a data collective, and participate in a data marketplace, then owning your car data could positively impact your life in at least four ways.?

You would:?

1. Get paid
2. Save money
3. Get a better experience
4. Control how your data is used

Read on for examples of each!

Note: If I were to explain the mechanics of how this stuff works - from collecting the data yourself, to joining a data union, to engaging in a decentralized data marketplace - that would make this newsletter wonky and long. So today we’re focusing on why this matters and the impact of this technology. If you’d like to know more about how it works, feel free to email me.

You would get paid

McKinsey recently estimated that by 2030, data from your vehicle could be worth $600 a year. Other car industry analysts have forecasted that revenues from vehicle data could surpass the cost of the vehicle itself. It won’t be long before Toyota starts sending you a check in the mail each month for the value of the data you are providing them.?

Just kidding! Car companies are keeping this data for themselves. They’re also coming up with new ways to charge you subscription fees for connected services which generate more revenue for them. These connected services produce more data which they can sell to third parties to generate more revenue from your use of your car (which you already bought!). Car buyers don’t seem too happy about this.

With ownership control over your car data, you could join a data collective. Data collectives are typically built on blockchain technology. A blockchain enables users - not companies or governments - to securely store and transmit their data.

By joining a data collective, you can contribute to a larger (therefore more valuable) database which can be sold to companies that are interested in analyzing the data for insights or using it to train machine learning models. By pooling your data together, you and the others in the data collective can leverage collective bargaining power to negotiate better deals with data buyers and earn a greater share of the profits generated from your data.?

If you’re interested in learning more about data collectives, check out Data Union DAO. They’ve developed an open-source data union framework.

You would save money

If you were to own your driving data, you could generate a ‘driver behavior report’ and use it to shop around for the lowest insurance rate and the best battery or tires for your driving habits.

Some car insurers will give you a discount for practicing safe driving habits. If you buy an insurance policy from Geico, you can download a Geico mobile application that collects data when you drive and tells Geico how you’re doing. Drive safely, get a rebate.

But what if you want to switch insurers and demonstrate to State Farm that you are a good driver based on all the data that’s been collected by the Geico mobile application??

Good luck with that! Geico owns your driving history data and they’re not going to share it with a competitor.

The blockchain enables you to control who can use your data, and makes the data interoperable between different companies. ‘Interoperable’ means that State Farm would be able to use your data in the same way that Geico did, without you needing to do anything extra.

Owning more and better data on your car’s performance could also help you maintain the vehicle better and save money on repairs. Imagine knowing how to use your brakes in the best way to extend the life of your brake pads. Or the optimal speed for your engine’s performance.?

Knowing more about how to keep your vehicle in better condition would also increase its resale value.

You would get a better experience

With control over your car data, you could download an application to tell you why your check engine light is on. Other applications on your smartphone could read the data to help you find the best options for insurance, maintenance, batteries, tires, car sales, financing, etc.

Car companies and mechanics have a huge advantage over you because they know so much more about your car than you do. This information asymmetry enables them to profit from you at the point of sale and keep profiting every time you bring your car in for repairs.

I’ll never forget the time I took my one-month-old BMW to a dealer because the check engine light went on. They wanted $165 for a diagnostic test before they would tell me what was wrong with the car. The ‘diagnostic test’ involved connecting a wire to the car’s computer and then looking at a screen for two minutes.?

The BMW dealership mechanic then said that the car needed $1,100 worth of repairs. An independent mechanic I visited the next day told me that my car was in perfect condition. Who should I believe??

If I could use an application on my phone to read my car data and tell me if there’s a problem or not, I wouldn’t have been a victim to this frustrating information asymmetry.

You would control how your data is used

Every time you drive, your car is collecting data. Google Maps doesn’t cost a dime because they’re collecting your driving and vehicle location data and selling it to the highest bidder. Do you know who is gaining access to the data you are producing for Google??

Did you know that Uber shares your ride history data with partners? For example, Uber partners with restaurants, hotels, and airlines to offer rewards programs that allow customers to earn Uber credits. In 2015, Uber partnered with the city of Boston to share data on Uber trips with city officials to help them better understand traffic patterns and improve transportation infrastructure.?

Maybe you don’t care how your data is used, but do you trust these companies to protect your personal information? In 2017, Uber admitted to covering up a data breach that had exposed the personal information of millions of users and drivers.?

In Europe, the General Data Protection Regulation (GDPR) gives individuals more control over their personal data and requires companies to be transparent about how they collect, use, store and share personal data. It also gives individuals the right to access, correct, and delete their personal data held by organizations.

In the United States, we don’t have any of these protections. This makes the case even stronger for why citizens - not companies - should have control over our data.

Looking ahead

On the one hand, our right to control our data is obvious. On the other hand, we’re so accustomed to giving it away (to Google, ChatGPT, Safeway, United Healthcare, Headspace, Tesla, PayPal, etc.) in exchange for convenience that it might be hard to imagine a world in which we retain sovereignty over our digital identities.

Innovators are developing blockchain technology to make it possible for individuals to collect, store, use, and sell our data ourselves. When we make this transition, the valuable data we are producing in our everyday lives will provide us with more opportunities to earn money, save money, have better experiences, and gain more control over our digital identities.?

Thanks for reading! If you'd like to discuss any of this, feel free to reach out.