BVRLA poLicy pApeR

INTELLIGENTMOBILITYmARch 2016

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The global intelligent mobility market

is forecast to be worth £900 billion annually by 2025,

with the UK in a position to draw

£56 billion in increased revenue opportunities

Through the growth of

connected and autonomous vehicles,

this market has been estimated to create

25,000 jobs within the automotive market,

and up to 320,000 across

the whole UK economy

Intelligent mobilityhas the potential to

prevent 25,000 serious road accidents,

saving as many as 2,500 lives

The Government has

committed £100 million for the development of

connected and autonomous vehicles –

yet much of this is aimed at the

“end user” market, with current

infrastructure requiring greater

investment and upgrade

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Contents 4 What data can be collected from vehicles?

6 What is intelligent mobility worth?

8 Regulation and legislation

9 Data protection

10 An enhanced role for CCAV

11 Policy recommendations

12 Participating organisations

Introduction

Intelligent Mobility refers to any optimised form of transporting people and goods that increases mobility, improves safety and enhances user benefits whilst simultaneously reducing pollution, consumption and congestion. Intelligent mobility technologies such as connected vehicles, smart motorways and big data are beginning to have a major impact on the road transport sector. The use and storage of data has become one of the most important issues facing global business. Business models within the fleet and automotive industries are likely to be re-shaped by the magnitude of customer, driver and vehicle data that will be generated in coming years. This data will be varied, come at incredible velocity, and will need to be stored, processed and analysed within both existing and future regulations. While these new data systems offer benefits for both industry and consumers, it also presents significant challenges in the control and storage of personal and/or commercially sensitive information.

The British Vehicle Rental and Leasing Association (BVRLA) has continued to monitor the debate around intelligent mobility, and engaged with officials1 at the Department for Transport and the Department for Business, Innovation and Skills. There has been progress, not least in the establishment of the Centre of Connected and Autonomous Vehicles (CCAV), following the BVRLA’s call for a cross-departmental Government office to act as a point of contact for the industry, as well as developing and implementing “joined-up” policy across relevant departments. In order for CCAV to deliver on this objective, it requires sound evidence and experience from organisations with an interest in this field. This paper therefore attempts to articulate the position of the UK fleet sector regarding these technologies and the issues they raise, as well as providing a series of recommendations aimed at supporting the growing intelligent mobility market, while addressing industry concerns as early and as fully as possible.

1 The impact of new data, including financial benefits for business and industry, is addressed more fully in the BVRLA’s Fleet Technology White paper (2014), at: http://www.bvrla.co.uk/sites/default/files/u43/fleet_tech_congress_white_paper.pdf

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What data can be collected from vehicles?Vehicle black boxes, similar to those fitted in aeroplanes and other forms of transport, are already being fitted in motor vehicles, and are capable of collecting several forms of driver and vehicle data. Such systems can provide various benefits to the vehicle operator, including the following:

„ Vehicle maintenance, measuring levels of wear and tear of individual components, and enabling remote diagnostics and preventative alerts. This could help reduce the risk of road accidents.

„ Fuel efficiency, which can be used to identify opportunities to reduce fuel consumption and ensure that all journeys are selected on the most cost- and time-efficient basis.

„ Journey planning – with connected vehicles transmitting journey data with one another, this can warn drivers of congestion or road hazards ahead, allowing route changes.

„ Measurement of the driver’s style and performance – e.g. adherence to speed restrictions and other road safety laws.

„ Location of the vehicle – for example, from 2018 new cars’ eCall systems will automatically contact the closest emergency centre if the vehicle is involved in a crash, reducing emergency services’ response time by 50% in rural areas, and 60% in built-up areas.2 This can also be a preventative tool against vehicle theft by tracking vehicles that have been stolen, even while the criminals are still in possession of the vehicle.

However, such location tracking devices mean that connected vehicles remain traceable, without the explicit consent of the driver. In addition to privacy concerns, this also raises data3 security questions as automotive companies can potentially hold a significant amount of data on their customers via connected vehicles. This also introduces the risk of this data being hacked or used for unauthorised purposes.

2 european commission; ecall Digital Strategy, at: https://ec.europa.eu/digital-single-market/ecall-time-saved-lives-saved3 personal data is defined by the Data protection Act 1998 as information which concerns living individuals. however, if data is anonymised and the subject can no longer be identified, it is no longer personal data and therefore not subject to this legislation.

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What is intelligent mobility worth?With the development of new data technologies, intelligent mobility also holds the potential to bring about a significant shift in spending across the whole transport sector. The Transport Systems Catapult has estimated that the global market could be worth as much as £900 billion annually by 2025 4, with the UK in a strong position to take a commercial advantage of the growing market. In the UK alone, this could be worth around £56 billion5 in increased revenue opportunities, including the following:

„ £14.1 billion for information services

„ £15.5 billion in transport (both public and private) service fares

„ £0.5 billion in private vehicle purchases

„ £0.8 billion in new intelligent infrastructure and/or development and upgrading existing infrastructure

Intelligent mobility is also projected to provide further benefits. The financial consultancy firm KPMG has estimated that an additional 320,000 jobs could be created throughout the UK economy through the development of connected and automotive vehicles, including 25,000 jobs in the UK automotive industry. Further benefits include increased levels of vehicle safety, with 25,000 fewer serious accidents as a result of such intelligent mobility technologies (between 2014 and 2030), saving as many as 2,500 lives6. As well as the obvious value of lives saved, this also translates to a cost saving for government by helping to reduce the annual cost of crashes (including the cost of ambulance and NHS services, police investigations, clearing the crash site). The Department for Transport has estimated this at £16.3 billion per annum7 – not including the economic losses caused as a result of congestion experienced by companies and individuals in the areas during or in the hours after the crash.

As the commercial value of automotive data continues to rise, questions over who owns this have become even more important. Vehicle manufacturers have an obvious interest in keeping hold of the information generated by their products, all the more so given the significant R&D investment. This is even more understandable when the financial benefits of data connected vehicles are observed in greater detail.

According to technology company Cisco, connected vehicles could deliver added value equivalent to £840 per vehicle per year. This consists of:

„ £330 of added value per vehicle per year for the fleet owner, in terms of better fuel economy, lower insurance rates and less time spent in traffic

„ £250 per vehicle per year for society, from better traffic management, increased road capacity, fewer crashes and lower emissions

„ £90 per vehicle per year for service providers, from providing traffic guidance, navigation, parking and other services

„ £180 per vehicle per year for vehicle manufacturers, in savings from lower warranty costs, profits from apps, etc.

Many manufacturers see the development of telematics-based Vehicle Relationship Management (VRM) as a virtuous circle that enables them to provide owners with free remote diagnostics and preventative alerts, thus enhancing brand loyalty (an approach which may also extend to the aftermarket). However, this approach also raises questions concerning the resulting restrictions in access to the vehicle data which is in the possession of original equipment manufacturers (OEMs). To proceed with this approach would have an impact on consumers’ freedom of choice to have their vehicles repaired or serviced by garages or dealers other than those connected or franchised to the OEM.

4 Transport Systems catapult; “The Transport Data Revolution: investigation into the data required to support and drive intelligent mobility”; at: https://ts.catapult.org.uk/documents/10631/169582/The+Transport+Data+Revolution/99e9d52f-08a7-402d-b726-90c4622bf09d 5 Transport Systems catapult; “Traveller Needs Study 2015: Supporting the realisation of intelligent mobility in the UK”, at: https://ts.catapult.org.uk/documents/10631/0/Traveller+Needs+Study/b438391e-04d7-4170-a2f5-3ab15a827e14 6 KpmG; “connected and Autonomous Vehicles – The UK economic opportunity”; at p.12: https://www.kpmg.com/BR/en/estudos_Analises/artigosepublicacoes/Documents/industrias/connected-Autonomous-Vehicles-Study.pdf 7 Department for Transport; Reported road casualties Great Britain: annual report 2014; published 24 September 2015 at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/463350/rrcgb2014-00.pdf

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Such acts could be regarded as potentially anti-competitive behaviour in violation of the European Block Exemption Regulation (BER)8, as well as the Government’s own guidance on general block exemptions.9

Partly due to scenarios such as those described, the privacy of the final stakeholder – the driver himself – requires protection. Drivers’ privacy concerns include the security of their data against the outside world (which is where anti-hacking measures are vital), and the use of data by the vehicle manufacturer and its associated OEMs. In the case of company fleets, companies wishing to use driver data need to get their support and consider several legal issues such as employee contracts, data protection and even human rights legislation. Yet there are potential advantages for the driver too – for example, transmitters fitted in connected cars will be able alert other drivers of traffic or accidents up ahead, helping to reduce congestion and ensuring that emergency services can reach the scene more quickly. There are also potential financial benefits, where firms may be willing to pay handsomely (in cash or with vouchers, for example) in return for being allowed to promote their products or services on an in-car navigation screen via a pop-up advert.

8 To consider and address such potentially anti-competitive behaviour concerning vehicle data, the european commission has established the c-iTS Working Group 6. The group will be guided by the five following principles:

„ emphasis on the consent of the subject to data being provided and to whom, with the provision of an opt-out for all end customers and data subjects

„ Fair and undistorted competition among all providers (such as maintenance and repair) to offer services to data subject; „ protection of all vehicle and movement data for reasons of privacy and/or security „ Tamper-proof access and liability „ Standardised access allowing interoperability between different applications, notably regulatory key applications, allowing for common

use of same vehicle data and resources.

9 Department for Business, innovation and Skills; General Block exemption Guidance, July 2014

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In addressing the aforementioned issues, there are currently major obstacles – firstly, a consistent set of data standards and metrics is required which industry will take on board. It is both impossible and commercially impractical for every individual or business to devise their own data system, and to proceed on this basis would leave open a number of security risks. The second obstacle is that current UK data legislation is out of date, and difficult to abide by as a result. Part of the difficulty is that technology is moving at such a rate that the law is struggling to keep up – however, a practical solution must be sought to address current legal quagmires and anticipate future challenges.

While the European Union is consulting with manufacturers to develop these standards, a UK approach needs to be refined to provide guidance to both manufacturers and users as to what standards are required, and what are the rights of the user to protect their data (or opt out altogether).

Regulation and legislationSimilarly, several further legal issues exist beyond intellectual property rights, notably over autonomous vehicles. For example, current unresolved questions include whether a driving licence is required to be in charge of such a vehicle, whether these vehicles need to have human “drivers” in the vehicle at all; who bears legal responsibility in the event of an accident, etc. These are questions which require careful consideration, before legislation is introduced to formalise the necessary rights and responsibilities around the operation of such vehicles.

What is therefore required is an appropriate UK body to issue guidance to manufacturers detailing the new standards and requirements for connected vehicles. This guidance should be outcome-based, in order to be carried out in a timely fashion, remain flexible, anticipate future challenges, and subject to regular review. We recommend that a specialist Commissioner be established, with specific responsibility for intelligent mobility issues arising from transport systems, to recommend appropriate legislation, and to take action in the case of manufacturers not abiding by this guidance.

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10 european council (2015): Data protection Regulation, at: http://www.consilium.europa.eu/en/press/press-releases/2015/06/15-jha-data-protection/ 11 one BVRLA lease member has raised the issue of vehicle owners having the ability to turn off data collection systems, which can be carried out in a number of ways – for example, a vehicle can be fitted with “jammers”, preventing other vehicles detecting its presence or accessing its data (this can be a particularly important security feature in cases where cash or other valuable goods are being transported.

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Data protectionOne of the most fundamental issues which remains unresolved concerns who owns data which is recorded and stored by vehicles. No line has currently been drawn as to what data “belongs” to the driver, what to the owner of the vehicle (if different), and what – if any – is applicable for the manufacturer to collect and use. However, in 2015 the EU published a new Data Protection Regulation10, which gave individuals easier access to their data through clarifying their right to request and receive this from companies. The EU also clarified individuals’ “right to be forgotten” through erasure of personal data, and placed the emphasis on data controllers to provide more detailed information as to what happens to an individual’s data.

In addition to the above benefits to OEMs, there are various benefits to individual drivers from the expansion of intelligent mobility. For example, connected cars can provide an additional assurance of safety to drivers and their passengers – for example, if a driver has an accident, a modern connected vehicle can collect more data than the driver himself could possibly recall accurately, including where the accident took place, what speed they were driving at, the speed of the other vehicle, etc. Uses of this data could assist and inform medical personnel if necessary to locate the driver, and to ensure the most appropriate treatment reaches him as early as possible (or, if emergency care is not required, to balance this alongside more pressing cases). Alternatively, if the accident involved more than one vehicle, use of such data could also reduce the likelihood of dispute at insurance stage between drivers contesting responsibility – if the owner of the connected vehicle consents to this data being used in such disputes. However, there remains the possibility for innovation to be stifled if too much data is considered the intellectual property of the driver, and/or excessive requirements are placed on the manufacturer to secure consent. Vehicle manufacturers may consider the development and production of new data systems as not commercially worthwhile if they cannot realise the benefits of that data due to privacy or access issues.

There are also further examples where a registered owner of a vehicle – who is not necessarily the driver – may not wish for certain connected technology to be active11. For example, if a lease driver has purchased a vehicle for online features, then the lease company realises that his regular route is close to a particular garage which they do not wish him to use, the lease company may wish to switch that system off. As a result, the driver may not want the vehicle anymore, or at least not without that particular system. In such instances, there are likely to be new negotiations arising as a result of the new emerging technologies, which the Government should address in advance.

One such solution to this potential challenge is for vehicle manufacturers to provide an option for purging data recorded in and by a vehicle. In order to ensure that operators of commercial fleets have access to driver data for management purposes, this purge option should be operator-driven and performed remotely (as opposed, for example, to a switch in the vehicle). This solution could be operated for almost any length of time, and could certainly address any outstanding concerns ahead of the question of data ownership being resolved at a later date. In ensuring both industry and consumer confidence, a recognised online security standard would also be a good mechanism of both incentivising and regulating telematics technology (particularly with regards to cyber security), in the absence of further legislation or regulation.

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An enhanced role for CCAVOne of the most welcome developments of the last twelve months has been the Government’s establishment of the Centre for Connected and Autonomous Vehicles (CCAV), the cross-departmental body instituted to engage with industry, consider and draft joined-up policy across Government, and make recommendations for legislation. An early success has been the Government’s provision of £100 million for the development of the connected and automotive market, which has been widely welcomed by industry. However, much of this funding has been aimed at end user technologies, with limited support for the development and implementation of current business opportunities, such as enhanced IT connectivity and infrastructure, and cyber security.

In addition to making recommendations on refining policy and funding decisions, there is also an opportunity for CCAV to provide greater day-to-day guidance for businesses using or thinking of adopting connected and autonomous technology. Specifically, there is a vast amount of research and data which could potentially be of interest to industry in the development of products and services. We therefore recommend that CCAV can archive much of this data, alongside other tools such as the latest regulations, international case studies, and available resources.

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Policy recommendationsThe BVRLA and its delegates recommend the following steps for the Government to support the growing intelligent mobility market, while addressing concerns as early and as fully as possible:

„ A common set of data standards and metrics is required to provide consistency for automotive companies looking to develop or adopt new intelligent mobility technologies. The EU is currently consulting with manufacturers to develop these standards. We believe that an appropriate UK body should issue guidance to manufacturers detailing the new standards and requirements for new connected vehicles. This guidance should be outcome based, in order to be carried out in a timely fashion, remain flexible, anticipate future challenges, and subject to regular review.

„ To ensure a specialist approach, a new Commissioner with specific responsibility for intelligent mobility issues arising from transport systems is required to consider and issue guidance such as the above, and to take action in the case of manufacturers not abiding by this guidance. This Commissioner would exist in addition to the current Information Commissioner.

„ A security rating for the cyber security of new connected vehicles would incentivise and regulate telematics technology.

„ An option for purging data recorded in and by a vehicle should be made available by manufacturers. In order to ensure that operators of all vehicle users have access to driver data for management purposes, this purge option should be operator-driven and performed remotely (as opposed, for example, to a switch in the vehicle).

„ CCAV to develop an available resource of the latest regulations, research, and available resources, which are of potential benefit to industry.

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Participating organisationsThe BVRLA would like to thank delegates of the following organisations for their participation in an open roundtable, as well as subsequent discussions:

Department for Business, Innovation and SkillsTransport Systems CatapultAlphabet GB LtdAvis UK

Drivetime RentalEnterprise Rent-A-CarFleethireHitachi CapitalJohn Lewis Partnership

LeaseplanMarshall LeasingRoyal MailWragge Lawrence Graham & Co solicitors