Three opportunities for the emerging data economy of driverless cars

By | 3 minute read | June 25, 2018

If data is the new oil, as some say, self-driving cars will be tapping into a new — and extremely deep — well.

A single self-driving car is predicted to gather and generate four terabytes of data per day, thanks to on-vehicle sensors, cameras and mapping software to ensure safety on the road. At the same time, data flowing into and out of driverless cars will supply a constant stream of content and entertainment we could devour on every ride. It’s the driving equivalent of walking through Times Square and being surrounded by digital billboards promoting everything from movies to makeup.

There’s a new kind of data economy emerging for driverless cars, as fast-evolving as the cars themselves, says George Ayres, Associate Partner of Internet of Things for IBM. What new business opportunities will be created and for whom? What challenges should companies hoping to mine this trove of data prepare for? Ayres broke it down for us.

Safety first

Mapping and navigational software will eat up much of the bandwidth for data coming into autonomous cars since it’s critical for safety, according to Ayres. These bandwidth demands will leave a skimpier pipeline for entertainment and other revenue-generating data. “Nobody wants passengers to stream four different Netflix screens but squeeze out safety data,” Ayres says. The arrival of 5G, the next generation telecommunication standard, will likely be a game changer, he says, expanding the pipe for both critical and personal data.

No matter how fat the pipe gets, safety-related data will always have priority, just like in today’s cars: When airbags deploy, cars shut down all other activity to prioritize data packets from vehicles’ safety systems.


“When marketers can claim passengers’ undivided attention, the data they generate will be valuable both coming into and out of the car.”

Cards on the cloud

Another data-economy opportunity that Ayres foresees: the revenue that will be generated by storing and processing the firehoses of data self-driving vehicles will produce. Big data is already big business. Expect purveyors of cloud data storage and processing power to charge top dollar for their services. As a cost-saving measure, Ayres expects automakers will use edge computing to process as much data as possible at the car level, then push the data to the cloud.

A data buyer’s market. Marketers and retailers clamor for consumers’ eyeballs 24×7, and Ayres points out that when people are driving, “there’s about two hours in the day when they can’t reach you.” That will change once cars reach level 5 of the SAE (Society of Automotive Engineering) automation levels. Without having to control steering wheels or gas pedals, everyone will become a passenger.

When marketers can claim passengers’ undivided attention, the data they generate will be valuable both coming into and out of the car. As people are shuttled between destinations, they will stream video or live news, shop online and engage with social media, giving marketers second-by second feedback on which screen is binging on “Westworld” and which is tuning into Rachel Maddow.

“Marketers will measure every single thing happening on those screens,” Ayres predicts. They will even build cameras and facial-recognition software into the vehicles to learn who’s watching what and how they’re juggling multiple screens (phones, tablets and in-vehicle displays). “Marketers can monetize that data and tailor each ad space,” he adds.

Another likely data buyer: Insurance companies who are curious about self-driving car owners’ precise “driving” habits — like where they drive, when they drive and how often.

Bottom line

In Ayres’ view, the data that will flow from autonomous cars will do more than ensure passengers’ safety and enhance their driving experience. He expects the data to also be a “natural resource,” and one that innovative companies will flock to monetize in new and surprising ways we can’t yet imagine. Just as the Times Square billboards seek to attract eyeballs, content providers for autonomous vehicles will be vying for attention of the vehicles’ captive audiences.