In the first column, we discussed the topic of Electric/hybrid cars within the context of the potential impact on our quick service marketplace. This month, we are going to talk about telemetrics as well as the concept of the “Shared Fleet.”
The Connected Car
First, let’s discuss the connected car and some implications and opportunities. You will recall we loosely defined telemetrics as “sensors” on board a car communicating information remotely via a connection. For the connected cars to really enter the mainstream and lead us into the truly autonomous cars, we will need to see the nationwide build-out of the 5g network. We said if 4g (today) is a four-lane highway traveling at 50 mph, think of a 5g network as an eight-lane highway traveling at 100 mph.
The 5g build-out comes first in the urban environment. Rural areas will follow. Economics and customer counts will drive the map of the build-out.
For our industry, we should be planning and thinking about how to anticipate what opportunities this will present. For example, today accessing vehicle data on newer models is increasingly being done wirelessly vs the ODB2 port. This is a game changer for customer communication.
The Right to Access Data
The current fight between the vehicle manufacturers and the broader automotive aftermarket, which includes us, is around who owns and or should have the right to access the available information about the vehicle that is generated through telemetrics. Think back to the Massachusetts Right to Repair Act in 2012. That legislation dictated that repair shops were entitled access to the ODB2 sensor information. The current engagement is very similar, only around the wireless transmission technology.
European studies have concluded that competition neutrality and data protection and security can be achieved by intentional design for interoperability. Essentially, Europe has determined that interested and vested parties, OEM’s, vehicle owners and their designated repair or
maintenance shops, should have access to the information. The United States and Canada have not yet arrived at that position from a regulatory standpoint. States, including Massachusetts, are examining what positions they will stake out.
This is a major battle with significant implications for us. Canada has indicated it expects all vehicles produced by 2023 to be fully connected vehicles. While the United States has not been as overt, connected vehicles are going to be the norm within just a few short years. Thus, access to the information about the vehicle is crucial.
Connected vehicles enable more predictive maintenance (add in a dose of AI and what do you have? Best timing based on a world of data being analyzed). We will cover some Artificial Intelligence (AI) possibilities in a later column.
There are a significant number of privacy questions raised by the connected car and its information. California is leading a charge to restrict the movement and use of this information, especially absent an informed choice by the vehicle owner.
The New Business Model
Connected cars permit a new business model to develop. Think of Uber on steroids and limited to small fleet groupings vs general service to the public at large. The shared fleet owner is now the controlling decision maker on whom we will focus vs each individual vehicle owner. This
creates opportunities for us to alter our model and marketing to accommodate the needs of this new class of owner. Think of a shared fleet owner and Level 5 autonomous car. Now the owner will know exactly when he/she wants the car serviced. We have two major considerations. One – regular maintenance performed at or near proper intervals is more crucial to prolong the availability and longevity of the vehicle. Two – might this be a great opportunity for you to offer being open from say midnight to six am just to schedule the shared fleet cars. A level 5 car has no driver so it can be serviced without impacting its daily duty cycle.
By 2050 as many as 1 in 3 miles driven could be from a shared fleet vehicle.
Now think about software connections between, the Lube shop, the software in the car, and the fleet owner’s fleet management software. Building the relationship between the Lube shop and fleet owner, identifying what needs to be serviced and scheduling it. All via software. No cash,
all transactions via payment software connected to the POS.
In the next column, we will entertain some thoughts around “Tesla’s shot across the bow.”
STEVE BARRAM is CEO of Integrated Services, Inc.(ISI) – software makers of LubeSoft. He has been actively involved in the fast lube segment of the automotive aftermarket industry for over 30 years through leadership roles, speaking engagements, and serving on boards.