How IoT will help subsidize the cost of driving
As the digital economy reaches a new phase of maturity, the way we navigate the physical world is on the verge of massive disruption. Thanks to the confluence of two unique factors — the changing nature of car ownership and the rapid growth of the internet of things — there’s a real possibility that the costs of driving will be reshaped in ways that were unimaginable just a few years ago.
Here are some of the ways this might unfold over the coming years.
More data-driven marketing
For years, the marketing tech world has been abuzz with the impact of big data on the industry. Marketers around the world are using the richness of social and mobile data to provide users with more targeted advertising, ultimately driving toward the Holy Grail of marketing — the “market of one.”
The data provided by autonomous vehicles and IoT will further enhance these rich data sets, and an increasing trend of data ownership may cause consumers to demand a say in how their data is used. This could lead to a data-for-dollars approach, which empowers consumers to monetize their own data. This is already happening in insurance, where customers are giving away their driving data in hopes of getting auto insurance discounts.
The value of attention
Beyond personal data, one of the most valuable commodities in today’s digital economy is the time and attention of consumers. Everyone is clamoring for it, but there’s only so much attention that any single consumer can offer.
Being able to command someone’s undivided attention — especially in an intimate, comfortable, isolated environment like a vehicle — represents such a massive opportunity for brands. The value of that attention may change the very nature of vehicles.
While most driverless car models still require a driver to pay attention to the road in case of emergency, future models could free up the time and attention that consumers previously spent focused solely on the road. Thanks to IoT, which is turning our homes, cars, appliances and data into one sophisticated network, the ability to monetize our attention inside a vehicle creates opportunities for advertising firms to subsidize the cost of vehicles, allowing them put branded content in front of riders. Dashboard computers might even turn into marketplaces, with entire industries serving highly contextual, targeted, location-relevant ads to consumers through their vehicles’ displays.
An in-car infotainment explosion
When a vehicle drives itself, do you need a steering wheel? A gas pedal? Traditional vehicles are designed for human drivers, but in autonomous vehicles, riders are free to look around, type and interact with the world more freely than the past. In the future, the interior of driverless cars will be designed to entertain, educate and deliver services to passengers.
We’re likely to see ad-supported games for vehicles, virtual reality applications, specialized TV and content channels, and all manner of in-car executive services. The battle to deliver engaging infotainment and services to people on the move will attract brands willing to pay for the right to “share” a vehicle with a passenger.
According to a recent Esurance report, these opportunities could create new revenue streams for autonomous ride-sharing fleets and vehicle manufacturers, allowing them to keep ownership prices competitive and make self-driving cars more accessible while maintaining strong profit margins.
The impact on auto insurance premiums
Human error is responsible for more than 90% of crashes, so the number of accidents and collisions on the road will likely decrease substantially when self-driving cars become commonplace. By connecting vehicles to control centers and each other, fleets of autonomous vehicles will begin to operate like complex organisms with moving parts, resulting in fewer collisions.
As a result, insurers will need to stay one step ahead. If most autonomous vehicles are owned by ride-sharing services, auto insurance may shift from a consumer to a commercial product. In driverless cars, the car itself could be responsible for accidents, rather than who’s behind the wheel.
Sophisticated automation, crowdsourced traffic information and advanced safety features will almost certainly force insurance companies to rethink how people pay for insurance, particularly if the autonomous vehicle they’re using is part of a ride-sharing service.
Taken together, these factors represent a fundamental shift in the ways we think about driving and the costs of transport, which can only be a good thing for consumers in the long run.
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