How Car Ownership Affects Digital Services Models

Today, many of us own a car, but advancing mobility systems may eliminate the need for everyone to have their own car. Ownership is moving from single ownership to fleets - a model that many business have already adopted. Think rental cars, Ubers, van or truck fleets—even city busses.

This shift in ownership will shape the role and effectiveness of digital services. To understand the benefits of this model, we have to dig into the value generated to the owners of vehicles in B2C (single ownership) and B2B (fleet ownership) models.

Value and use cases of single ownership

In a B2C setting, services enable new experiences where cars and smartphones compete to create an exciting, easy and efficient user experience.

Applications of these services are endless, including:

  • Automating the payment transaction between the vehicle and the fueling station

  • Offering additional goods such as new windshield wipers or your favourite snack by a gas station 

  • Directly communicating between the vehicle, owner, and parking infrastructure

  • Pay-as-you-go / usage-based insurance model

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Each of these use cases requires personal user data of the driver. The driver - as the owner of this data and all the data that the car generates while they are using it, will be able to choose different levels of data usage to share with the car manufacturer. High levels of control regarding data allow the user to customize the products and services they use. For example, a user could allow usage of payment services, so that their vehicle automatically pays for fuel, but restrict more in depth personal info that would be needed for usage based insurance.

Technical implications of the fleet model, use cases and their value

The ability to process data from the telematics unit within the car will be tied to consumer actions. The car is showing anomalies in its behavior? Send a trigger. The consumer is stopping near a gas station? Send a trigger.

Core processing of real-time data streams will remain on the vehicle as the cost of sending terabytes of data to the cloud everyday outweighs the benefits. In these cases, data processing will be performed on-board with core logic at the edge. This allows the car to send data to the cloud only once certain trigger criteria are met. The onboard devices for this model must be smart, taking care of key data processing and analyzing the data for trigger events.

Cloud data processing is still being tested for use cases which are less context related such as usage-based insurance. These new insurance models require a much larger portion of the data collected by sensors on the vehicle, and are monitored over time. Streaming data for these applications into the cloud allows for higher flexibility to analyze the data, but the costs of constantly uploading data must still outweighed by the benefits - a challenge in the single ownership model.

Things are different in the fleet ownership model—scale matters

Vehicles in fleets are deployed at a much higher rate than in the single ownership model. While consumers typically only use their vehicles 5% of the time, fleet vehicles are used on average 50% of the time or more.

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Fleet management around the car and drivers can yield a significant return on investments (RoI) for the fleet provider. Maintenance costs can be covered more quickly by a large number of users than a single owner. Core use cases include driver behavior analytics, route optimization, predictive maintenance, as well as usage based insurance models and residual value analysis for vehicles. Services like these will reduce maintenance costs, thus increasing the RoI.

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As the RoI for these use cases is higher on average than context-based consumer services, we see a higher acceptance of the cost to send data to the cloud. Hardware on the fleets can then be less powerful, but include a connectivity layer that reliably streams data to the cloud, where data scientists take over.

Whether a vehicle has a single owner or belongs to a fleet has significant implications for how vehicle manufacturers approach the setup of the architecture - both physical architecture on the vehicle as well as IT architecture to facilitate and optimize the data flow.

A flexible tool that supports both areas

With Xapix' data integration and exchange solution we are already empowering our customers to perform offboard data processing and scalable sharing with partners.

As we strive to build a holistic mobility platform that can act as a backend for all use cases around connected vehicles, our teams are expanding into the on-board world to facilitate similar data integration, transformation, and processing power on the vehicle itself.

About Xapix

Xapix is a software that lets businesses create simple, modern, and easy-to-integrate connections between existing and new systems in the form of APIs. Our software is significantly faster, more flexible, and more powerful than traditional approaches to data transformation, normalization, and integration, using the power of automation so that businesses can collaborate with hundreds of partners instead of only a few. This way, we enable companies to build a smarter future, faster.