Most drivers today can still remember when GPS was provided by a portable device plugged into the car’s cigarette lighter and mounted on the windshield with a suction cup. But soon after the iPhone arrived, GPS (or Sat Nav for U.K. readers) became just another app.
Now, an American geography researcher is arguing that GPS’s transition from dedicated hardware to smartphone software was even more significant than we realize. He says mobile mapping apps also foreshadow the ultimate transformation of car companies from purely “hardware” manufacturers to hybrid hardware, software, and service providers.
With that tectonic shift, he says, will come another shift toward a transportation economy in which the prime commodity is not just the car, but also the driver (his example echoes a larger trend which the sociologist Shoshana Zuboff calls “Surveillance Capitalism”).
“What we have with smartphones is, now [GPS] data can be monetized in other ways,” says Luis Alvarez León, assistant professor of geography at Dartmouth College. “Information companies are providing the mapping service as an ancillary way of refining their search algorithms, of collecting more data about the consumers… [and] of repackaging it for other third parties.”
As cars become more automated, Alvarez León says, they also become more valuable platforms for information and tech companies. For example, digital dashboards no longer display only vehicle operating parameters such as speed, engine RPMs, and fuel levels. New dashboards like GM’s Marketplace also show information about relevant products and nearby destinations.
“The entire dashboard of the car is an enormous screen that does not just display the map, but also [displays] promotions and media,” he says. “This a good illustration of the convergence of navigation and the platform economy.”
Moving forward, drivers who are shopping for a new car will probably face choices and trade-offs similar to those which today’s consumers face when shopping for smartphones. Companies including Apple charge a premium for phones that allegedly keep a user’s data away from governments and third-party vendors. (Some media outlets have investigated and arched an eyebrow at that premise, while others say privacy is Apple’s “best product.”) Other phones are cheaper but don’t promise to shield the user from surveillance.
In the future, if a driver wants a car that protects their privacy, “I think there might be a cost tradeoff,” Alvarez León says. “Which is how information companies operate. They provide services for free or at a very low cost, because they’re essentially being subsidized by the digital and personal information that they collect.”
He continues, “Consumers [could be] presented with a choice where they’re going to give up some data, but that saves them a few hundred or maybe thousands of dollars.”
The slow shift of cars from manufactured items to hardware, software, and service platforms traces back to at least the growth of financing divisions at traditional automakers, he says.
“Car companies are now realizing that they’ve been sitting for years on troves of customer information that give them an edge on turning their product into a bundle of services,” Alvarez León says.
He points to a recent interview with Ford’s CEO Jim Hackett in which the executive said, “We know what people make. How do we know that? It’s because they borrow money from us. And when you ask somebody what they make, we know where they work, you know. We know if they’re married. We know how long they’ve lived in their house because these are all on the credit applications. We’ve never ever been challenged on how we use that. And that’s the leverage we got here with the data.”
As vehicles become increasingly autonomous, how they’re marketed—and the features that customers value most—may change dramatically. The surveillance that is already part of most consumers’ lives (at least those who own mobile and “smart home” devices) will change, too.
Alvarez León says he doesn’t think there’s any reason to become a luddite as a result of this shift in the transportation economy. Rather, transparency will be an important factor for consumers as cars change from machined hunks of metal to roving software and service platforms.
“The fundamental change would be to opt-in to these services,” he says. “And the default is that data are not collected. But you are aware of what you’re signing up for. This has to be a prominent design feature. For me, I’d be perfectly happy with a pay model. I pay for various digital services, for which there are free options. But I’d rather pay for them, because I have more agency and control over the product I’m getting, rather than the hidden cost of getting something for free but then subsidizing it with who-knows-what sort of information.”