Internet of Things revolutionizes automotive tech


Automotive technology has been steady and incremental for decades, only recently incorporating advanced technology that holds out the potential to truly revolutionize the very nature of what a car is, and how we drive them.

The technology is still at the experimental stage, and has not yet reached mass adoption. Part of what will trigger the tipping point is funding, and according to Vishnu Andhare, Consulting Manager at ISG, a global technology research and advisory firm, venture capitalists are especially excited about IoT. The automotive industry in the past has been a buy-it-and-done proposition. But “Venture capitalists love recurring revenue,” said Andhare. The as-a-service model will become dominant in the auto industry, not only with a growing ecosystem of IoT-enabled automotive services, but also with new innovations like shared mobility, where an automobile may be shared between multiple users, much like the popular LimeBike bike sharing network, with which an individual can simply pick up a bicycle anywhere in the city, swipe a credit card, and use it on an hourly basis.

The standards challenge

The standards issue will be one of the industry’s greatest challenges in getting past the tipping point in automotive IoT. Europe is a great example of where these challenges are especially problematic, and a unified IoT operation in Europe is difficult because each country requires a local SIM card to work. Hertz is one which has overcome this standards challenge and expand the limits of its IoT-powered fleet between countries, and the service now works seamlessly across seven European countries.

A related challenge is software localization. Andhare notes, “For example, software learns over time in Boston, but the same algorithm is not going to work in Bangkok, because it has to learn the local conditions. That’s a big challenge in terms of software localization.”

On a deeper level, Andhare says, “On the communications level, there are challenges,” referring to the OSI seven-layer model, which describes the full range of network communication. “On the lowest layer, interoperability is established on a sensor-to-sensor basis, and that is already happening,” says Andhare. “What is not happening is at the higher level, those interoperabilities still do not exist. There are standards coming, but it’s going to take time.”

It’s all about the data

The Internet of Things isn’t just about connectivity, it’s about the large volume of data that is collected as a result, and using that data is where the real power of IoT comes in. That data is useful not only in self-diagnostics, but also in other services such as insurance – and data feeds from connected cars are quickly revolutionizing the automobile insurance industry. Arity, a tech startup born from Allstate Insurance, offers data analytics tools to transportation companies, car manufacturers and other insurance providers.

The insurance industry is moving towards usage-based insurance (UBI), which measures rates based on driving behavior, based on data provided by the IoT-connected automobiles. Arity is partnering with insurance companies, the first of which is National General Insurance, to facilitate collecting, managing and analyzing driver data towards this goal. Also, Arity’s newly-launched shared mobility solutions is a predictive data and insights platform, created from billions of miles of driving data. It can be used to help rideshare companies reduce risk and loss, while approving and onboarding drivers and users more quickly.

New innovations

Automotive IoT doesn’t stop with the insurance agency. Already, innovations like automatic toll road recognition are in place, and companies like Cardtek, a provider of end-to-end payment solutions, are moving towards in-car payment technologies. According to Erdal Yazmaci, co-founder of Cardtek, “the potential of incorporating a secure and seamless payment platform within vehicles, allowing consumers to pay for services like gas and parking, without having to get out of their car, is too significant for it to not take off in the very near future. In-vehicle technology solutions can facilitate on-screen payments through smartphone integration, IoT and NFC technology, adding convenience and speed to car-related purchases. The development of a secure in-car payment platform makes a lot of sense for consumers, and it opens the door of opportunity for automakers, payment companies, and merchants to provide a more convenient experience for their customers.”

Automobiles will become more connected – no longer a little isolated bubble of personal space, but part of a larger ecosystem that includes a host of services, connectivity that will allow cars to talk to each other, and self-diagnostics that extend the life of the vehicle and enhance safety. In this world, the car itself is merely the center of something much larger. Cars will no longer be purchased based on their own merits, but they will become more of a commodity to deliver the associated IoT-enabled services, in much the same way as a smartphone isn’t just for making phone calls, but is seen as a tool for delivering hundreds of useful smartphone apps.