Kenn Dahl has always considered himself a careful driver. 65 years old, owner of a software company near Seattle, he drives a leased electric car. He never had an accident in his life. That's why he was surprised in 2022 when the cost of his car insurance increased by 21%. Suddenly the quotes from other insurance companies were also high. An insurance agent told him his report LexisNexis (If you don't know what it is, here it is) was a determining factor. It's not an episode of Black Mirror, even if what Dahl discovered left him astounded. His driving habits were monitored and shared with insurance companies without his explicit consent.
This is an all-American story, perhaps, and for now. I created this article starting from a report published this week in the New York Times, you find it here. Why did I choose to propose it to you? As often happens, it is a way to look at the future of Europe, for better or for worse. But for all I know, it could already be the present here too.
A betrayal on the spot. Indeed, on four wheels
For Dahl, the discovery was a real shock. “It felt like a betrayal,” she said. “They are taking information that I didn't know would be shared and using it to raise the price of insurance.” But her case is far from isolated. In recent years, several automakers (including GM, Honda, Kia, and Hyundai) have begun offering optional features that evaluate people's driving style in their connected car apps. What many drivers don't realize is that if they turn on these features, automakers share data about how they drive with data brokers like LexisNexis.
Insurance, the hidden price of connectivity
Modern cars are connected to the Internet, allowing access to services such as navigation, roadside assistance and car apps that drivers can connect to their vehicles to remotely locate or unlock them. But this connectivity comes at a price: Our driving data has become a valuable commodity, sold by automakers without owners' knowledge.
Particularly troubling is that some drivers with GM-made vehicles say they were tracked even when they didn't activate the feature (called OnStar Smart Driver) and that their insurance rates increased as a result. GM says the service is optional and that customers can unsubscribe at any time, but the opt-in process is far from transparent. Then we ask ourselves why the news about patents that provide for the "autonomous" blocking of a car is causing a sensation she returns to base alone if you miss an installment to purchase it.
Privacy policies? Incomprehensible
Even for those who knowingly opt for these programs, the risks are far from clear. “I'm surprised,” he says Frank Pasquale, professor of law at Cornell University. “Because it is not within the reasonable expectations of the average consumer, it should certainly be insurance industry practice to prominently advertise that this is happening.”
Researchers who have examined automakers' privacy policies have called them "a privacy nightmare," full of legal jargon that consumers can't understand.
Profits at the expense of drivers
Neither automakers nor data brokers deny engaging in this practice, although the former say the primary purpose of their driver feedback programs is to help people develop safer driving habits. But some suspect that the real reason is another: money. According to an employee familiar with GM's Smart Driver program, the company's annual revenue from the program is in the range of a few million dollars.
“Automakers are really good at trying to tie these features to safety and saying they're all about safety,” he says Jen Caltrider, a researcher at Mozilla. “Really, it's about making money.” Who would have thought.
A practice under scrutiny
In the US, this collection of sensitive information from consumers' cars is attracting the attention of regulators and lawmakers. California's privacy regulator, for example, is investigating automakers' data collection practices. “The 'Internet of Things' is really intruding into the lives of all Americans,” the senator said Edward Markey in an interview. “There is collusion between car companies and insurance companies who use data collected from an unsuspecting car owner, then increase their insurance rates. This is, in my view, an unfair and deceptive commercial practice that harms consumers."
For some experts, this practice raises concerns not only about privacy, but also about fairness. “Stealthily enrolling in programs with 'surprising and potentially harmful' data collection is troubling,” he says Omri Ben Shahar, professor of law at the University of Chicago. For me they are all right. So?
Insurance (and not only): a nightmare future for privacy?
If people don't know that their driving style will affect the cost of insurance, there is no public safety benefit. Instead, this practice risks unfairly penalizing drivers who may be labeled “risky” based on opaque and questionable criteria.
As connected car technology advances, the problem will only get worse. Unless stricter rules on transparency and consent are put in place, we could find ourselves in a dystopian future where our every move behind the wheel is monitored, analyzed and used against us, transforming our cars from symbols of freedom to tools of surveillance .
It's time for automakers, data brokers and insurers to crack down on this insidious practice. Consumers have the right to know what happens to their data and to have real control over it. Otherwise, the price of connectivity could be our very privacy.
