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Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

Opportunities and Barriers for Advancing the API Economy within the Automotive Industry. Fridolin Koch (B.Sc.), 18.02.2019, Master’s Thesis Final Presentation. Motivation I. Service Selling. Third-Party Data Acquisition. Value Adding. Weather API. Maps API. Calendar API. Fuel Price API.

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Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

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  1. Opportunities and Barriers for Advancing the API Economy within the Automotive Industry Fridolin Koch (B.Sc.), 18.02.2019, Master’s Thesis Final Presentation

  2. Motivation I Service Selling Third-Party Data Acquisition Value Adding Weather API Maps API Calendar API Fuel Price API App Backend Vehicle Data Why is there no open API trend within the automotive industry? 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  3. Motivation II Hypothesis If OEMs would provide vehicle-generated data through APIs, a powerful ecosystem would emerge and enable an API economy within the automotive industry. 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  4. Research Questions 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  5. Research Approach - Grounded Theory Methodology Research Questions Extensive Literature Review Semi-structured Interviews Theoretical Sampling Data Collection RQ1: Value Creation & Data Collection Coding RQ2: Use Cases Relationships RQ3: Barriers Rich description Relationships RQ4: Potential Measures 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  6. State of the art collection of vehicle-generated data • Access to vehicle-generated data primarily via the On-Board Diagnostics (OBD) Interface • OBD-I as a requirement in the US from 1985 onwards • OBD-II as a requirement in the US from 1994 onwards • European On-Board Diagnostics (EOBD) • Required for gasoline-engine vehicles from 2000 onwards • Required for diesel-engine vehicles from 2003 onwards • Implementation differences between OEMs • Only a small subset of the data available through the interface is standardized • Through proprietary vehicle CAN protocols an order of magnitude more information can be accessed • OEMs want to disable the OBD-Interface while the vehicle is driving Source: Vimcar Source: AliExpress Source: Amazon 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  7. Vehicle-Generated Data Value Network • Value Network • Co-creation of value through a combination of multiple actors • Assumptions • Data Owner is the User of the vehicle (i.e., driver) not the OEM • Standardization Provider is facilitating between the actors to negotiate common implementation framework Adapted from Reich et al., Schladofsky et al., McKinsey 190110 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  8. Existing Standards & Concepts • ISO 20077, 20078 and 20080 (Remote Diagnostics) • 20077 – Extended Vehicle concept, terminology, purpose; Methodology to address the needs • 20078 – Extended Vehicle Standardized interface rules (JSON / XML REST API; OAuth 2.0 & OpenID Connect 1.0) • 20080 – Remote Diagnostics (First Extended Vehicle Application) • Neutral Extended Vehicle for Advanced Data Access • Five data categories (1 – Safety, 2 – Brand Independent Services, 3a – Brand Specific, 3b Component Analysis & Product Optimization, 4 – Personal Data) • Neutral Server – Read only access without direct contact between OEM and DC; Fair & Efficient Market through multiple Neutral Servers DC N DC 2 DC 1 DC 2 DC N DC 3 DC 2 DC N DC 1 DC 1 … OEM-A Server … OEM Server OEM-B Server Neutral Server(s) … Cellular Network Cellular Network DC = Data Consumer 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  9. Existing APIs • BMW Car Data • First API which implements the NEVADA concept • Currently two use cases • Customer is able to request all vehicle-generated data transmitted to BMW • Transmission of vehicle-generated data to third-party (customer consent required) • Mercedes Benz • Multiple APIs complying with ISO Standards available • ISO 20078 (Customer consent for data sharing with third-party required) • Vehicle Status API: State of windows, sun root, lights etc. • Vehicle Lock Status API: State of the locks • Pay As You Drive Insurance: Odometer Access • Fuel Status API & Electric Vehicle Status API: Remaining Range, Fuel level or state of charge • ISO 20080 (Only available to independent operators within the EEA) • Remote Diagnostic Support: Diagnostic Capabilities: Hardware & Software Features of Vehicle, Diagnostic Trouble Codes, Snapshot Data 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  10. Approach • Semi-Structured Expert Interviews • 18 Interviews with 19 Experts • 10,25 Hours of Interview • IV-Coding using MAXQDA 190110 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  11. Existing Use Cases •  Identified nine Macro Categories based on the coded interviewee’s responses • Insurance • Pay-As-You-Drive, Pay-How-You-Drive • Fleet Management • Carsharing, (Test) Fleet management, driver’s logbook • Maintenance • Predictive Maintenance, Diagnostics • R&D optimization • Product optimization • Vehicle Monitoring • Insights into sensor reading, Eco-Driving • Convenience • Traffic flow, parking place detection in-vehicle payment 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  12. Proposed Use Cases • Identified ten Macro Categories based on the coded interviewee’s responses • Maintenance • Predictive Maintenance, Diagnostics • Public Infrastructure • Infrastructure Monitoring, Carsharing, Traffic Flow optimization • R&D optimization • Product Optimization • Convenience • Traffic Jam Avoidance, Parking Place Detection • Consumer Transparency • Vehicle Information, Car Usage Log, Driving Style Feedback • Safety • Roadside Assistance, Accident Detection 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  13. Taxonomy of the Barriers 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  14. Taxonomy of the Barriers - Economic 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  15. Taxonomy of the Barriers – Legal & Social Acceptance 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  16. Taxonomy of the Barriers – Technological 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  17. Barriers - Top 10 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  18. Potential Measures – Explicit & Derived 8 6 • Government Regulation • Ensure Access (e.g., like PSD-2) • Fair Access • Unclear Data Ownership • Ease Liability Framework for OEM • Regulate Security & Resilience • Enduser Transparency • Data Privacy concerns • GDPR considered “good framework” • Enduser Acceptance 4 3 • Market Pressure • Foreign / Local Competitors • First Mover Required • Consumer pressure • Incentives for Endusers • Monetary Incentive (e.g., Insurance Rate) • Innovative Products • Improving Convenience considered crucial 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  19. Potential Measures – Explicit & Derived 2 1 • OEM Collaboration • Less competitive thinking • Reciprocal Exchange will enable an API economy • Viable Business Models & Data Monetization • Improve Interoperability • OEM Organization Policy • Open Innovation / Cooperate with Start-ups • Slim down hierarchies and structure • Define Standards (In Progress  ISO) • “Think digital” 1 1 • Critical Data Mass • Required to find sustainable business models Demonstrate the Sustainability  Demonstrate that Data is valuable (OEM) 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  20. Potential Measures – Explicit & Derived 3 1 • Edge Computing •  Preprocessing in Vehicle • Reduce Data Amount and required bandwidth • Improve Data Quality • Targeted Data Collection •  Select subset of vehicles and sensor (Model, Location etc.) • But: Data required for use case must be known beforehand • Reduce Infrastructure costs • Test Business Models • Reduces required mobile network bandwidth 3 • Neutral Data Provider • Reduce Data Amount • Fair Market Access • Positive Effects on Pricing • Share Costs for Infrastructure 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  21. Conclusion & Outlook Problem • No API Economy Trend withinthe Automotive Industry Key Findings • Proposed Use Cases require large data amounts (not feasible with dongles) • Major barriers related to Economic and Legal issues • Potential Measures are mainly Government Regulation, Edge Computing and Improving Enduser Transparency Outlook • First APIs available, more will be available in Summer (VDA) • Described Barriers and Measures imply that an API economy emergence will take more time and structural changes within the automotive industry • Examine Unclear Business Models Approach • Extensive Literature Review • Semi-Structured Expert Interviews with 19 Experts • Used Grounded Theory Methodology to create a rich description of use cases, barriers and potential measures 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  22. Fridolin Koch B.Sc. 17132 matthes@in.tum.de

  23. References • A. Reich, N. A. Krämer, and R. Lenninger, “Fahrzeugdaten-management standardisierter zugang als basisfür neue geschäftsmodelle,” ATZelektronik, vol. 13, no. 2, pp. 42–47, Apr. 2018, issn: 2192-8878 • W. Schladofsky, J. Mitic, A. P. Megner, C. Simonato, L. Gioppo, D. Leonardos, and A. Bröring, “Business modelsfor interoperable iotecosystems,” in Interoperabilityand Open-Source Solutions forthe Internet of Things, I. PodnarŽarko, A. Broering, S. Soursos, and M. Serrano, Eds., Cham: Springer International Publishing, 2017, pp. 91–106 • McKinsey & Company, “Monetizing car data – new service business opportunities to create new customer benefits,” McKinsey & Company, Tech. Rep., 2016 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  24. Backup 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  25. ISO 20078 Schematic 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  26. NEVADA - Neutral Extended Vehicle for Advanced Data Access 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  27. Potential Measures - Legal 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  28. Potential Measures - Legal 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  29. Potential Measures - Economic 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  30. Potential Measures – Economic/Business Model 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  31. Potential Measures – Technology 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  32. Potential Measures - Social 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

  33. Images • Slide 1 • Office 365 Logo: https://videotron.com/vtrn/images/products/fr_final/hebergement/office-365/office-365_grande.png.pagespeed.ce.JEPHsH9Nzk.png • Google Maps Logo: https://upload.wikimedia.org/wikipedia/commons/thumb/4/48/GoogleMaps_logo.svg/2000px-GoogleMaps_logo.svg.png • The Weather Channel Logo: https://www.programmableweb.com/sites/default/files/styles/article_profile_150x150/public/icon_weatherchannel.jpg?itok=zgiyZden • MDM Portal Logo: https://www.mdm-portal.de/resources/images/mdm_logo_de.png • BMW Logo: https://upload.wikimedia.org/wikipedia/commons/thumb/4/44/BMW.svg/2000px-BMW.svg.png • Mercedes Benz Logo: https://upload.wikimedia.org/wikipedia/commons/thumb/9/9e/Mercedes-Benz_Logo_2010.svg/1024px-Mercedes-Benz_Logo_2010.svg.png • VW Logo: https://upload.wikimedia.org/wikipedia/commons/thumb/a/a1/Volkswagen_Logo_till_1995.svg/768px-Volkswagen_Logo_till_1995.svg.png • Audi Logo: https://upload.wikimedia.org/wikipedia/de/thumb/1/15/Audi_logo.svg/1280px-Audi_logo.svg.png • Slide 6: • Vimcar: https://blog-media.vimcar.com/uploads/2017/03/20170547/2014_12_15-Header-624x390.png • AliExpress: https://de.aliexpress.com/item/OBD2-Scanner-AUTOPHIX-OM126-Multi-language-OBD-2-Diagnostic-Tool-Fault-Code-Reader-OM126-with-I/32815099736.html • Amazon: https://www.amazon.de/Vgate-Interface-Diagnose-Android-Windows/dp/B00OY0X8IS/ref=sr_1_4?ie=UTF8&qid=1550158678&sr=8-4&keywords=obd2+dongle 190218 Koch Opportunities and Barriers for Advancing the API Economy within the Automotive Industry

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