There are two cynical abominations happening in new cars right now – subscription “services” and data selling. And if automakers don’t start sorting this out, there’s going to be hell to pay. There were two recent major incidents that give us a big clue about how things are going in general – BMW tried making heated seats a subscription feature, and General Motors got a five-year ban from the Federal Trade Commission (FTC) from selling recorded data about geolocation, driver behavior, and more, from vehicles and subscriptions it has sold.
$100-Per-Month-For-Heated-SeatsMike Bird via Pexels / CarBuzz
Tips Of An Iceberg
The BMW incident –where it was raked over the coals for trying to make heated seats a subscription service – and GM getting hammered by the FTC after it was caught selling customer data, are just a sign of what’s to come if customers and legislation doesn’t push back. It’s not just automakers double-dipping, it’s changing what a car fundamentally is and, at this point, if you’re paying a regular subscription to use equipment and software already in the car you paid for, and your data is being sold to third parties, do you actually own your car?
GM OnStar Mirror buttonGeneral Motors
It’s Not Just BMW Double-Dipping
What we mean by double-dipping is something being sold, then the automaker making money on it again. In BMW’s case, it was putting a paywall on heated seats. BMW could only sell a subscription to use heated seats if they were built into the car that the owner has already paid for. It’s the most egregious example so far, but other automakers are doing it in more subtle ways.
In GM’s case, it was aggressively selling a subscription to the OnStar service with one hand, then selling the data harvested from subscribers and selling it – including to insurance companies. People were literally paying for GM to sell their data, and with little to zero transparency. OnStar includes features like “safety, navigation, roadside assistance & in-vehicle Wi-Fi”. Frankly, it’s no surprise OnStar has to be sold aggressively now – it’s main attractions have become incredibly dated. After all, our phones can connect to the internet, provide navigation, call for roadside assistance, and even call emergency services if it detects you’ve been in a collision.
If you’re paying for a subscription that includes, for example, automatic high beams, remote locking or remote start, guess what? It’s already built into your car, and the automaker is locking the ability of the car you’ve already bought behind a paywall. Your car can be unlocked and started in a variety of ways that don’t require cloud service – including Bluetooth, near-field technology, or through your home’s wireless network. Or, you know, on the key fob as a button you press twice, as Nissan likes to include.
The issue becomes more nuanced with services that require upkeep. However, things like Ford’s Blue Cruise or Chevrolet’s Super Cruise are more clear-cut as the continued mapping and servers running the systems have to be paid for. There’s an argument for those being paid for services even though the hardware and software is in the car. But, all the hardware and software is already built into the car – and the customer paid for it.
It could be argued that a connected cloud-based ability to start a car would be useful for when someone isn’t at their home, and requires server costs. But that feature is, inevitably bundled in with other features. And bundling useful features into packages full of features that aren’t useful is a whole other can of worms.
Polestar Google Gemini InfotainmentPolestar
It’s Not Just GM Selling Your Data
We’re slowly being boiled into accepting our data being harvested and sold everywhere, and it’s becoming inescapable unless you’re a tech nerd that has the time, knowledge, and equipment to avoid the cloud and Google – and now automakers are making it even harder to avoid Google. That does not mean it’s okay, though. Data is incredibly valuable, from a large-scale level down to the personal.
Earlier in the year, Consumer Reports looked at 15 different automakers: BMW, Ford, General Motors, Honda, Hyundai, Kia, Mazda, Mercedes-Benz, Mitsubishi, Nissan, Stellantis, Subaru, Tesla, Toyota and Volkswagen. The outlet studied all the agreements and disclosures from all the automakers, and said that “nearly” all of them collect and share some level of information with other companies. The Mozilla Foundation, a strong advocate for data privacy, says that “cars are the worst product category we have ever reviewed for Privacy”.
The data about where you work is probably out there and easy to harvest, but not so much about how often you may, say, visit a doctor, or a specialist doctor, or what food places you visit or coffee shops you stop by, or what religious property you spend time in. All that kind of data is incredibly valuable when harvested. That can link with the people you visit to help build a better web of data. The social media algorithms want it, the advertising algorithms want it, all types of insurance companies want it, the government wants it. And they will all pay the automaker that sold you your car for it.
BMW Neue Klasse wireless computer diagramBMW
Why Are Automakers Building Subscription Models And Selling Data?
The answer to the above question is pretty damn obvious: Money. Add money, corporate greed, and shareholder satisfaction together, and the resulting term is the corporate holy grail of “year over year profit” – which, inevitably, becomes harder and harder to achieve. So, if a company can’t simply charge more every year for its product, it has to find other ways to build profits year-over-year.
One way of doing that after selling less for more has reached the point of what the market will bear, is adding revenue streams. Enter subscriptions and data harvesting and selling. Until the advent of the internet getting into cars, once a car was sold, it was likely that the automaker wouldn’t make any more money from it.
Maybe they would see some revenue later from parts sales, but that car was sold as a unit and the customer might not be back for years, if at all. However, if they sell a subscription, that’s recurring revenue that, if done right, gets passed on to the second and hopefully third owner. The same goes for data. There’s a reason GM is moving away from including Apple CarPlay andAndroid Auto and shifting to its own native platform. We don’t care how GM tries to frame the decision, the bottom line is the data.
Mustang Mach-E Digital Cluster, BlueCruise Hands-Free mode activeFord
It’s Okay To Be Angry: It’s Your Car
The problem isn’t that subscription models exist or even that data is harvested and sold. It’s whether the subscription is fair and of value, and if the data is sold with clear permission and with benefit to the customer. That doesn’t mean all automakers are collecting or selling every granular detail or being as cynical as GM, but even if not, that data is yours. It comes from your car. Which is where it’s okay to get angry: if you bought it, it’s your car. Even if it’s just data that helps the automaker improve its products, it’s your car – and that data clearly has financial value.
If automakers want permission to access, use or sell your data, it shouldn’t be a one-way transaction, and it certainly shouldn’t be hidden in the fine print. What should be happening is that letting a company – any company – harvest your data should be an opt-in transaction, not one that’s assumed and puts the onus on the customer to opt-out. And if the automaker wants to use or sell that data, they should have to pay the owner of the object for that data it generates. Because, and let’s all say it out loud together… it’s your data.
As for putting a paywall on features on a car someone buys, hopefully that has a short shelf life. It looks like society is getting pretty tired of subscriptions and data-driven algorithms trying to control their attention and spending habits, and used cars from before everything became connected are an option. A savvy customer-driven automaker about now would be thinking about baking privacy into their cars and marketing it as a feature.
Sources: Mozilla / Edmunds / DaxStreet
