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Big data to drive "massive revolution" in fleet industry

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The fleet industry is set to undergo a “massive revolution” with the introduction of the connected car and the arrival of so-called ‘big data’, while contract hire companies will transform into analytics businesses that lease vehicles.

Those were two of the predictions at ACFO’s spring seminar, ‘Big Data - Big Seminar’, sponsored by insurer AIG, Audi and Lex Autolease, the UK’s largest vehicle leasing and fleet management company.

Held at Whittlebury Hall, Northamptonshire, around 80 fleet decision-makers, heard Nick Mitchell, Audi’s service and technical manager, say: “The arrival of the connected car will result in massive changes in the way people use cars and the application and provision of cars. Technology will be updated before our eyes. It is a massive revolution that we are about to go through and the pace of change will never be as slow again.”

For contract hire and leasing companies the arrival of ‘big data’ means “transformational change”, with Craig McNaughton, corporate director, Lex Autolease, forecasting that it will enable them to “predict the future” in terms of vehicle service, maintenance and repairs and driver behaviours as a result of data analysis thus taking away fleet operation uncertainty.

That journey is already starting with the piloting and ultimate roll out by Lex Autolease to clients of operational benchmarking across a raft of in-life areas of vehicle expenditure and risk to enable fleet improvements and cost savings to be made.

Ultimately, McNaughton told delegates: “Connected car data will fundamentally change our industry. We have a long way to go, but we must change from a rear-view mirror perspective to using data to predict the future and move from a leasing company that provides management information to a data company that leases vehicles.”

However, the transformation will not be without its challenges and behind the scenes policy makers, vehicle manufacturer and leasing company representative organisations are discussing numerous issues around data ownership and accessibility.

The key challenges faced from a leasing company perspective included, said McNaughton: liability around data breaches with company car drivers not currently covered by leasing companies’ masterhire agreements, which were contracts with fleet customers; and manufacturer determination of ‘who is the customer’ - contract hire and leasing companies, end-user fleets or company car drivers.

He said: “There are real contractual challenges to overcome due to the difference between retail customers and fleet owners.

“The connected car will be a huge part of the data lake and the volume of information ever-increasing. Fleet customers demand information to tell them what is happening to their vehicles and to predict the future and lead them on a journey to provide cost savings and deliver safety.”

Traditional fleet business model to change as drivers ‘control their lives’ from their car

The advent of the connected car will enable drivers to download functionality that physically changes a model’s characteristics and specification with a potential huge impact in numerous areas of fleet operations as well as the likely requirement of tax and legislation revisions, according to Mitchell.

Cars, he forecast, would change from being a “status symbol” to a “mobile device” with new players such as Apple and Dyson joining long-established motor manufacturers as well as newcomers such as Tesla in the battle for sales.

Furthermore, Mitchell predicted a huge increase in the delivery of on-demand services to drivers and also the ability for vehicle users to update their cars as manufacturers introduced new functionality.

For example, he highlighted that a company car could be sold as a 150bhp model, but on demand a driver could add a further 20bhp, which would completely change a model’s performance and thus its carbon dioxide (CO2) emission figure and therefore an employee’s benefit-in-kind tax bill.

Mitchell said: “Drivers will want that functionality, but the car will no longer be the vehicle that it was. It could be that cars are sold with the lowest specification and on day two the specification is updated by drivers. That would have a massive impact on HM Revenue and Customs’ revenue. Legislation and the tax system as we know it will have to change and that will have to be dealt with.”

Forecasting that numerous issues, notably around vehicle contractual terms and data ownership, needed to be resolved with the arrival of the connected car Mitchell said: “People will be able to control their lives from their car. The traditional business model will no longer apply.”

Employers must take action to protect themselves in new world of ‘big data’

Sharing and using personal vehicle user data is a huge issue and a leading lawyer has advised businesses to update employment contracts, terms and conditions and codes of conduct to reflect the new world of ‘big data’.

Employers are bracing themselves for the May 25, 2018, introduction of the General Data Protection Regulation (GDPR), which will have a potentially significant impact across organisations, and particularly for fleet introduction of connected cars.

The Information Commissioner’s Office (ICO), which is responsible for enforcement of the law and is currently consulting on aspects of GDPR, has already undertaken some initial work with organisations, which include the Society of Motor Manufacturers and Traders (SMMT) and the British Vehicle Rental and Leasing Association (BVRLA) “in order to develop its understanding of the data protection and privacy risks arising from the deployment of connected and autonomous vehicle technology”.

GDPR builds on existing data protection legislation with a particular focus on digitalisation and technology. Core to the 1998 Data Protection Act are eight data protection “principles” and GDPR reforms those and introduces new “principles” of transparency and accountability with the ability to “prove consent” a significant pillar of the new regulations.

Alex Ktorides, head of ethics and risk and a partner at law firm Gordon Dadds, told delegates: “‘Big data’ is all about having an ethical approach and that means transparency. Connected cars will generate huge amounts of data and the question is what happens to that data. It is crucial to make sure it is being ethically handled.

Calling GDPR a “big sea-change” and explaining that the ICO was aiming to ensure that the law kept up with the pace of technological change, Ktorides said with regards to connected cars and ‘big data’: “Some of the information will relate to employees and their behaviour so employers need to consider being completely transparent and hatch an ethical and transparent plan. Fleets need to plan how they will use that information and tell their employees.

“Businesses must be clear about what data they are gathering and why, where it is going and how it is being used and gain people’s consent.”

That, said Ktorides, meant updating contracts of employment, employee terms and conditions and codes of conduct and he suggested anonymising data was a “very effective tool”.

He told delegates: “If information is personal and identifies who a person is and how that employee is using their car and their behaviour then it impacts on their privacy and requires sign-off.

“There is huge value in gathering data, but that must be balanced against people having a right to privacy. Employers must put people’s rights at the forefront and show good governance and gain consent.”

The advent of ‘big data’ increases the pace of fleet management change, says ACFO

Fleet management is changing at a pace never seen before and the arrival of ‘big data’ was one of the biggest steps, ACFO chairman John Pryor told delegates.

Introduction of the connected car and the generation of so-called ‘big data’ was set to change the long-established fleet management model, he said.

And that change had to be managed, while fleet decision-makers grappled with the impact of numerous other issues including: the viability of diesel as a fleet fuel amid air quality concerns, the impact of Brexit, government consultations on many issues including currently on business expenses - including potentially employee mileage allowances - the forthcoming arrival of a new real-world driving vehicle MPG and emissions testing regime and a “spectacular increase” in fleet administration.

What’s more the recent hacking of NHS computer systems in the UK and other organisations’ systems worldwide had put security fears around vehicles and the data collected front of mind, suggested Pryor.

Commenting on vehicle and ‘big data’ cyber security, Dave Tanner, operations manager at Lex Autolease, which has 372,000 vehicles on its books, said: “People should be worried and not just assume that they are safe.”

Meanwhile, Pryor continued: “We are currently at the tip of an iceberg. The arrival of ‘big data’ will have a major impact on fleet operations and company car drivers.

“Today’s connectivity is the start of the journey towards the autonomous car and while the secure exchange of data builds the foundations for new business activities and applications, there are significant risks and challenges regarding safety, security and privacy that need to be addressed.”


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  • Derek Webb - 22/05/2017 13:11

    I know I bang on about the "real" uses of connected and driverless cars but only because there needs to be an alternative voice. These progressive inventions have very little to do with the car driver, its all about the supplier. We can get mechanical and technical information about our cars now and have been able to do that for years. On-board computers are very sophisticated and easy to use, and private. The stuff that Business wants from cars of the future is data, where they car goes, where and what fuel you buy, where you shop, your employer, your customers, your age, if you have kids and on and on and on, the strong likelihood is that there will be two-way talking/listening devises - for our help of course and they will be driver switched off when not broadcasting won't they. Its possible that people won't mind OEM,s etc. having that info but its what is done with the data that's the interesting question. The arguments about who owns the data, who owns the customer and how best to utilise the data collected is the issue, why are there "fights" already - because its very, very valuable and its also very controlling. People will be able to work in their car or their shared car instead of driving it, we will all travel at the same speed, we will not do a bit of shopping or visit anyone in work time. We will be told what we have done rather than report it ourselves. All this is only applies to the law abiding, Those that are capable computer hacking and computer fraud will have a field day. There will be all sorts of assurances about the security of on-board connected cars but there won't be enough and the usual excesses will be trolled out when misdemeanour's or hacks occur.

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