Major car insurance companies, such as Progressive and GMAC, have recently begun offering "pay-as-you-drive" (PAYD) programs. To participate, drivers connect a device to their vehicle that monitors mileage, speed, time of day, hard braking, quick accelerations, and other data points. This information can be sent wirelessly to the insurance company, and drivers’ premiums are adjusted accordingly.
So now when some crazed fool suddenly cuts you off and you brake hard in response, that other motorist is costing you money in addition to endangering you.
Depending on the program, participating drivers can access their driving data on a secure website, which could also enable parents to check up on teens’ driving habits. Most PAYD programs don’t track location yet, and the California Insurance Commissioner, a proponent of PAYD, is against location tracking in order to foster public trust in the programs. However, the GMAC service relies on the OnStar system, which can track location. Allstate is also developing a GPS-based PAYD system.
Industry spokespeople recognize that some view the service as an invasion of privacy, but contend that people are willing to give up privacy to save money. The companies offering PAYD do have privacy policies and allow participating drivers to cancel the program at any time. The policies also point out that the information can be shared in response to a subpoena, or with the driver’s consent. But subpoenas can come from a variety of sources, such as divorce lawyers, and other privacy contexts show that consent is a problematic data safeguard. We shall see whether this data will be put to other uses in the future, like pollution monitoring for the purpose of assessing a carbon usage tax.
I’m also interested in whether these pricing triggers will affect social behavior. For example, since time of day is a factor, I wonder if many drivers would be deterred from going on a late night grocery run or watching midnight movie showings, in order to preserve their premiums. Studies indicate that PAYD programs reduce driving generally, though I assume that effect occurs primarily among the money-conscious and excludes those who have little choice in how far they drive, like rural motorists.
It’s worth noting that as recently as 2005, PAYD systems were considered too problematic for widespread commercial adoption, in part because of privacy concerns. However, some industry analysts predicted that other services, such as after-theft tracking and recovery, emergency road assistance and navigation, would eventually warm up the public and aid a "smooth transition" to broader acceptance of PAYD insurance. It’s quite possible that this trend is leading to a single vehicle-mounted device that performs all of these services, perhaps in combination with advanced versions of the event data recorder.
For the past couple days I’ve occasionally been trying come up with another civil right besides privacy that is so profitable to compromise. It’s one big reason why privacy is being eroded on so many different fronts. It’s also why privacy can be difficult to protect. Society’s expectations of privacy are transformed in increments, with recent changes used to justify each new change. And while many consumers will appreciate the pittance of savings or security they receive in exchange for their privacy, far fewer will look back upon the cumulative effect of all those incremental changes and realize how different things have become over the span of a generation.