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Transcript

Spying in the Fast Lane: How Automakers Have Monetized Driver Telemetry · Kvetch & Release

• 0:00
  Speaker 1: Right now, though, it is time for another edition of
• 0:04
  Speaker 1: Litkey's Got a Take with John Litkey. And good morning, John.
• 0:08
  Speaker 2: Good morning, Gene.
• 0:09
  Speaker 1: And happy birthday to you. You didn't even know that
• 0:12
  Speaker 1: I knew that, did you?
• 0:13
  Speaker 2: Thank you so much.
• 0:14
  Speaker 1: It means a lot. Hey, while everybody in Canada is
• 0:17
  Speaker 1: obsessing over foreign tech and Chinese EVs and Doug Ford
• 0:22
  Speaker 1: calling them spy cars, GM... And you just told me
• 0:28
  Speaker 1: about this story. GM got selling driving habits behind people's
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  Speaker 1: backs to insurance data brokers. So how does a company
• 0:37
  Speaker 1: that build cars and pickup trucks end up acting like
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  Speaker 1: a digital wiretap on your morning commute and selling these
• 0:46
  Speaker 1: things to insurance companies?
• 0:48
  Speaker 2: I can tell you, Gene, you were saying people need
• 0:50
  Speaker 2: a deep breath on a Friday morning. GM definitely needs
• 0:53
  Speaker 2: a deep breath after this $ 220 million-plus settlement. U.S., and
• 0:58
  Speaker 2: this is just across the U.S., brought by 26 attorneys general.
• 1:01
  Speaker 1: But how did it happen?
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  Speaker 2: Automakers ran the numbers and realized that stamping sheet metal
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  Speaker 2: earns pennies, but flogging live drivers' telemetry to corporate brokers
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  Speaker 2: can print money. They rolled off the assembly line straight
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  Speaker 2: into the surveillance racket. They dressed up invasive surveillance as
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  Speaker 2: helpful dashboard babysitting, promising maintenance pings and gamified driving badges,
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  Speaker 2: while quietly... routing every hard tap on the brakes and
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  Speaker 2: quickly passing maneuver directly to brokers like Lexus Nexus, who
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  Speaker 2: sells that data to insurance brokers who raise your insurance
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  Speaker 2: when they see that you're a bad driver or a
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  Speaker 2: risky driver. It's a shakedown. Working people shelling out $ 60, 000
• 1:41
  Speaker 2: to get a truck? to get to the job site,
• 1:44
  Speaker 2: I mean, they shouldn't have to worry that their car
• 1:46
  Speaker 2: is going to become a back-channel cash cow for insurance
• 1:49
  Speaker 2: underwriters and the companies themselves, the automakers.
• 1:52
  Speaker 1: Well, listen, when people go on to certain websites and
• 1:56
  Speaker 1: they want to purchase something or become a part of
• 1:58
  Speaker 1: a social media platform, you have to click on that
• 2:02
  Speaker 1: I agree routine at the bottom of 18 million pages
• 2:06
  Speaker 1: of legal stuff. Nobody ever reads that stuff. However... Don't
• 2:11
  Speaker 1: drivers bear some responsibility here for signing away their rights
• 2:14
  Speaker 1: without reading the fine print?
• 2:19
  Speaker 2: I think far more so for drivers than if you're
• 2:21
  Speaker 2: downloading an app on your phone, for example. But I
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  Speaker 2: think it's still a bit of a lazy excuse because
• 2:27
  Speaker 2: in cars, in terms of service... It's not an informed contract.
• 2:32
  Speaker 2: It's an arbitrary hostage-taking toll booth that you click through
• 2:35
  Speaker 2: at a red light just to get to your heater
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  Speaker 2: controls or your Apple CarPlay to work or something, or
• 2:39
  Speaker 2: your auto drive on a Tesla. I think that meaningful
• 2:42
  Speaker 2: consent should require plain language and genuine awareness, not buying
• 2:46
  Speaker 2: predatory insurance-gouging clauses. underneath 40 pages of microscopic, court-tested corporate legalese.
• 2:54
  Speaker 2: It should be a stand-alone contract that people pay for
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  Speaker 2: or sign up for after the fact. The blame sits,
• 3:01
  Speaker 2: in my opinion, with the corporate executives who are deceiving
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  Speaker 2: the consumer alongside the asleep-at-the-wheel regulators primarily who are letting
• 3:08
  Speaker 2: them get away with it. But as long as the
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  Speaker 2: money's there to be made, they're going to do this. Yeah.
• 3:13
  Speaker 1: Well, I mentioned this before. We've heard nonstop panicking from politicians,
• 3:17
  Speaker 1: specifically Doug Ford in Ontario, about these Chinese electric vehicles
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  Speaker 1: spying on Canadians. Now, are we sounding alarms about Beijing
• 3:28
  Speaker 1: while ignoring the cars that are already in our parking
• 3:31
  Speaker 1: lots and driveways?
• 3:32
  Speaker 2: Yeah, I think that's a big risk, Gene, is that
• 3:34
  Speaker 2: we are chasing our own tails while ignoring the obvious,
• 3:37
  Speaker 2: if you will. Corporate capital is thoroughly agnostic. You know that.
• 3:41
  Speaker 2: From Detroit to Tokyo, Wolfsburg, Shenzhen. I'm sure you've lived
• 3:45
  Speaker 2: in all those places with how much you've globetrotted. I mean,
• 3:47
  Speaker 2: if you don't lock down driver data by law, boards
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  Speaker 2: of directors will monetize it every single day of the week,
• 3:53
  Speaker 2: and they'll be incentivized to do it by... their sales
• 3:56
  Speaker 2: departments or by external parties who want that data, as
• 3:58
  Speaker 2: we've seen. So Ottawa has spent two years hyperventilating across
• 4:02
  Speaker 2: all media about hypothetical foreign software and the need to
• 4:05
  Speaker 2: limit Chinese EVs while letting in small amounts of Chinese
• 4:09
  Speaker 2: EVs that could open the door to moat or Chinese
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  Speaker 2: EVs that they say is a national security issue and
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  Speaker 2: could spy on us, while the traditional domestic fleet sitting
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  Speaker 2: in every Canadian driveway was already systemically pillaging driver data
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  Speaker 2: and shipping it out the back door.
• 4:23
  Speaker 1: Wow. Well, you know, down south, America's attorneys general just
• 4:28
  Speaker 1: hit GM with a lawsuit, which resulted in a massive
• 4:32
  Speaker 1: $ 200 million settlement. Now, what I'm wondering is, why does
• 4:35
  Speaker 1: Canada always seem to be sitting on its hands when
• 4:38
  Speaker 1: it comes to big tech and privacy?
• 4:41
  Speaker 2: Because federal privacy law in Canada, Gene, is a polite farce.
• 4:45
  Speaker 2: I'm sure you've filed freedom of information before. I filed
• 4:48
  Speaker 2: one at the beginning of COVID in 2020, actually the
• 4:51
  Speaker 2: first year, and I'm still waiting to receive a response
• 4:53
  Speaker 2: from it. It's been six years. One agency got a
• 4:56
  Speaker 2: response saying it would take 90 years to get the information.
• 5:00
  Speaker 1: What?
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  Speaker 2: Yeah, and this is just, that's our freedom of information.
• 5:04
  Speaker 2: So if that's how they're treating us from government, it's
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  Speaker 2: not a surprise that in corporations that we don't have
• 5:10
  Speaker 2: privacy law that's impacting them. And so when the 26th U.S.
• 5:13
  Speaker 2: State Attorney's General brought the hammer down with crushing nine-figure settlements,
• 5:18
  Speaker 2: Ottawa drafts tepid, hand-wringing press releases and conducts multi-year stakeholder dialogues.
• 5:24
  Speaker 2: And when non-compliance penalties amount to petty pocket change compared
• 5:28
  Speaker 2: to multi-million dollar data monetization profits or even bigger, corporate
• 5:33
  Speaker 2: suites treat privacy violations as the cost of doing business.
• 5:37
  Speaker 2: And they'll just pay the fine. Meaningful corporate compliance only
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  Speaker 2: starts when regulatory penalties... punch a massive, unignorable hole directly
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  Speaker 2: through their bottom line.
• 5:47
  Speaker 1: Well, you know, I have to be honest with you.
• 5:50
  Speaker 1: You sent me an email and you said, here's my
• 5:52
  Speaker 1: take for 9-15 Friday morning. And I'm a news junkie
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  Speaker 1: and I had never even heard of this going on.
• 5:59
  Speaker 1: So what does real government action look like? How do
• 6:02
  Speaker 1: you stop insurers from tapping into this data stream?
• 6:06
  Speaker 2: I think it's actually pretty simple and i think it
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  Speaker 2: needs a regulatory sledgehammer across every level of jurisdiction first
• 6:12
  Speaker 2: federal authorities must pass aggressive statutory crackdowns that inflict crippling
• 6:17
  Speaker 2: penalty and financial spent all these sanctions he's for buried
• 6:21
  Speaker 2: or deceptive consent traps. That's number one. Two, provincial insurance
• 6:26
  Speaker 2: watchdogs across the country need to immediately prohibit underwriters from
• 6:30
  Speaker 2: accessing telemetry data unless a consumer affirmatively signs an explicit,
• 6:34
  Speaker 2: completely unbundled, standalone contract, as I mentioned. When I click
• 6:39
  Speaker 2: I agree to the terms of service on my phone,
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  Speaker 2: it's not going to affect me in a meaningful way.
• 6:44
  Speaker 2: When I agree to the terms of service in a car,
• 6:46
  Speaker 2: my insurance rates could be jacked up. That's crazy. The
• 6:49
  Speaker 2: third thing that needs to be done is just clear
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  Speaker 2: out the legal hurdles for massive consumer class actions to
• 6:54
  Speaker 2: drag these automakers into court and bleed their profit margins
• 6:57
  Speaker 2: until they realize that deceptive data harvesting ceases to be
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  Speaker 2: a viable business model.
• 7:02
  Speaker 1: Wow. Well, thank you for bringing this to our attention.
• 7:06
  Speaker 1: I had no idea this was going on, and I
• 7:09
  Speaker 1: suspect a lot of the good listenership didn't know about
• 7:11
  Speaker 1: this either. In fact, great takes this week, Mr. Litke.
• 7:14
  Speaker 1: Have a fantastic birthday. We'll talk to you again Monday
• 7:18
  Speaker 1: at 945.
• 7:18
  Speaker 2: Thank you so much, Gene. Have a great weekend.
• 7:22
  Speaker 1: Litke's Got a Take.