A Policymaker’s Guide to Connected Cars

Alan McQuinn Daniel Castro January 16, 2018
January 16, 2018
While there is much excitement about autonomous vehicles, connected vehicles hold much more promise over the next decade or so. However, absent proactive public policies, especially to enable infrastructure to “talk” to vehicles, the development and adoption of connected vehicles will be suboptimal.

In 2011, Akio Toyoda, the president of Toyota, unveiled a car concept he described as a “smartphone on wheels.” This metaphor is apt. Over the last decade, car manufacturers, technology companies, and broadband providers have connected vehicles to networks, automated many of their functions, and brought a wealth of innovative applications to consumers. Policymakers should take steps to spur the continued deployment of connected cars, especially by ensuring that connected cars can “talk” to connected infrastructure.

In the past, cars were primarily mechanical devices that used some electricity to power certain components, such as lights, radios, and spark plugs. Over the last two decades, cars have incorporated both mechanical and digital capabilities. Just as computers became increasingly connected to the Internet in the 1990s, cars are now becoming increasingly connected to networks and devices. Not only does this include connectivity to the Internet, it also includes connections to digital services provided by automakers, to the driver’s smartphone, and to devices outside the vehicle, such as traffic lights, parking meters, other vehicles, and smart home equipment. Connected cars are becoming more common, with one report estimating that 90 percent of all new cars will have connectivity by 2020. Another report estimates that by 2020, there will be 61 million cars with data connectivity in use globally. But their deployment and functionality could be limited without supportive public policies.

Like smartphones, vehicles are becoming digital platforms that enable and support a vast array of mobility-related digital innovations. These platforms allow innovators and entrepreneurs to build new applications for drivers. Like smartphone makers, car makers maintain proprietary software for the vehicle while offering drivers access to a multitude of apps and developers a centralized place to access potential customers. They bring virtual assistants, navigation software, entertainment, business applications, smart home applications, and productivity tools to the car. Tech companies, such as Microsoft, Apple, and Google, were the first movers in developing connected car platforms, and as a result, many car manufacturers feature auto platforms, such as Apple’s CarPlay, Microsoft Connected Vehicle Platform, and Google’s Android Auto, in their new models. Automakers have also started creating alternative app systems for their newer models. For example, Ford and Toyota created SmartDeviceLink, Jeep and Chrysler developed Uconnect, and BMW developed the ConnectedDrive Portal. These connected car platforms will underpin new apps and services for vehicles. And just as mobile app developers have used smartphones’ gyroscopes and accelerometers to create innovative apps that do initially unanticipated tasks, such as gauge sleep patterns, so too will car app developers use in-car sensors to create new services in unpredictable and beneficial ways.

With more connected vehicles on the road, policymakers will encounter policy debates and challenges previously seen in other industries that have progressed along the technology adoption lifecycle. Chief among these are concerns about public safety, data protection, liability, intellectual property, data standards, interoperability, and access to wireless spectrum. Policymakers will need to be proactive to address these issues in ways that support safety but also innovation. At the same time, governments will have to do their part by modernizing infrastructure to enable connected vehicles to connect to something more than the user’s smartphone.

To address these challenges and fully enable connected car innovation, this report offers eight policy principles that should guide policymakers as they address connected vehicle policy issues:

  • Support vehicle-to-everything (V2X) infrastructure.
  • Promote national cooperation and interoperability for V2X.
  • Incentivize companies to protect consumers.
  • Ensure regulations are technology neutral.
  • Rely on transparent industry-led standards for data protection.
  • Restrict scope creep for regulators overseeing connected vehicle privacy.
  • Allow vehicle owners to access and use their own data.
  • Permit after-market modifications and repairs while protecting copyright holders’ rights.
A Policymaker’s Guide To Connected Cars