3 Reasons Why the Time for Connected Vehicles is Now

This is the first article in a series designed to give enterprise organizations clear insights into the solutions and trends involved in the Internet of Things and how this technology can help advance their businesses, enhance the customer experience and improve security. This week we spotlight the adoption of connected car and vehicle technology and the growing acceptance of the sharing economy.

The connected car, as with other Internet of Things (IoT) applications, is about more than just vehicles communicating with other technology over a network. It’s about capturing data to improve efficiency within the sharing economy and enabling aware, autonomous and connected vehicles to transform data into useful information. This fascinating concept has the potential to transform the way consumers and businesses access the shared vehicle space, but why now?

Here are three reasons why the time to capitalize on connected vehicles is now:

1. Rapid urbanization has created a need for sharing resources and a shared economy.
2. Connected vehicles are a new line of revenue for businesses. Connectivity can be leveraged by car dealerships or rental agencies to enhance customer experiences or enterprises looking to capitalize on underutilized assets, such as vehicle fleets.
3. The technology exists to do this. IoT provides individuals and organizations with on demand access to a wealth of shared resources and assets.

Urbanization and the Sharing Economy

The Internet of Things is the convergence of technology advances and macro trends, like urbanization. More than half of the world’s population lives in urban areas; by 2050, that figure will be 70%. As the population migrates to urban centers, problems like pollution and traffic congestion will arise. Consumers and organizations are sharing resources to avoid these issues, especially in the transportation industry.

“Urbanization places a massive amount of stress on transportation infrastructure,” said Paul Bedard, associate director of Business Development and Strategic Planning for Smart Transportation at Verizon Enterprise Solutions. “Sharing vehicles by leveraging connectivity and mobile applications will alleviate these pressures.”

The sharing economy is a direct result of urbanization. The advantage of having a large amount of resources in one area, and new technology facilitating on-demand access to these resources, allows for the sharing and monetization of assets. This is one reason why, now more than ever, individuals and organizations need to share transportation modes. It only makes sense to capitalize on this trend.

Leverage Connected Vehicles as a New Line of Revenue

Beyond responding to urbanization concerns, connected vehicles are creating new business models for organizations large and small. From startups, such as Lyft or Zipcar, to enterprise companies with large vehicle fleets, connectivity can be used to lower costs or transform underutilized assets into profit centers.

For example, car rental companies and dealerships can enhance the user experience by allowing customers to skip the rental agent and rent cars using their smartphones. Enterprises can capitalize on unused transportation equipment or vehicles by making them available for on-demand use by outside parties.

“Connected vehicles allow businesses to get the most out of their assets and improve customer experience while cutting costs,” Bedard said. “By enabling motor and asset pooling, enterprises can provide the same level of service and access to customers, but in a way that reduces costs and is sustainable.”

As an added bonus, organizations can improve the safety of owned vehicles by capturing diagnostic data to provide predictive maintenance and fix a problem before it happens. This, of course, is collecting data and transforming it into useful information without human interaction. Gathering diagnostic data for predictive maintenance, capitalizing on underutilized assets and on-demand rentals are all enabled by the Internet of Things.

The Internet of Things Empowers Connectivity and New Business Models

As we noted in our report, "State of the Market: The Internet of Things 2015," to be considered a part of the Internet of Things, a platform must be aware, autonomous and actionable. The device must be responsive to the data it is collecting and be able to transform that data into information on its own, without human interaction. Leveraging connected vehicles to alleviate the stresses of urbanization, to participate in the sharing economy and to capitalize on new business models would not be possible without IoT.

Think about it: connectivity is the foundation of the sharing economy which is a result of urbanization and has created new lines of revenue for businesses and individuals. Sharing resources in a society demanding everything to be readily available quickly and efficiently is enabled by connected solutions.

“The connected car has a bright future with huge potential for innovation,” Bedard said. “While assisted and autonomous vehicles are the endgame for this technology, there is work being done to ensure that assets, vehicles and components of infrastructure are talking to and aware of each other.”

Visit Verizon Telematics to learn more about our comprehensive suite of connected solutions and services for enterprises, OEMs and dealers.