Uber Movement smart city data service exploits regulatory flaws

Uber has launched a new business unit – Movement – to offer its data to local authorities to assist city planning, though questions around data monetization and user consent could be raised.

While Uber has been celebrated by the general consumer, the company has found a fair few critics as well. From taxi drivers, to government tax men and privacy advocates, the internet brand has its fair share of tricky moments, and plenty of need to gain favour from local authorities. The latest move ticks a couple of boxes for the team; generating new revenues while aiding city planners with one of the more interesting promises of smart cities, easing congestion in cities which are getting busier and busier.

“Uber trips occur all over cities, so by analysing a lot of trips over time, we can reliably estimate how long it takes to get from one area to another,” the company said on its blog. “Since Uber is available 24/7, we can compare travel conditions across different times of day, days of the week, or months of the year – and how travel times are impacted by big events, road closures or other things happening in a city.”

Data is fast becoming the commodity of the digital era, though many companies are struggling to find adequate use cases for the data they are collecting. For some this may be due to a lack of analysis technologies, i.e. they are collecting data but done know what to do with it, though for other it may be due to regulatory restrictions.

The latter is most likely to be the reason telcos are struggling to monetize data which has caused friction in the industry.  Many telcos around the world have seen profits eroded due to OTTs offering similar voice and messaging services for free, though the data which they have collected on customers throughout the years could be seen as a valuable resource to replace lost revenues.

Although many of the telcos are potentially sitting on huge treasure troves of data, current regulation has restricted how this insight can be monetized, or dictated how consent must be obtained from the user to monetize it. In some cases, this can lead to a legislative labyrinth which can prove to be complicated and expensive. For value added services, consent must be obtained from the user, though when the data is anonymized, it does not.

While the OTTs may be able to offer similar services to the telcos, they are currently held accountable to a different set of rules. Yes, as part of the terms of use for some OTTs, the user allows the use of his/her data for commercial benefits as the offered service from the OTT is free, however Uber charges customers while also collecting data, which could potentially complicate the matter further. In this sense, it is not the traditional OTT model and not too dissimilar from a phone contract, as telcos charge for the service while also collecting data on the user. One problem which may arise is the fact OTTs and telcos play by different rules on how data can be monetized.

“The OTTs and telcos are not operating under the same regulations currently when it comes to location data and how it can be monetized,” said Angus Finnegan, Head of Communications at law firm Taylor Wessing. “This is likely to change in the near future as we are expecting new rules from Europe to bring OTTs in line with telco regulations.

This is certainly an interesting use-case for the data which Uber collects, though having a look through the terms and conditions on the website, there does not seem to be an option for users to opt-out but continue to use the Uber taxi services. Nothing has been said yet, but regulators may find issue with Uber strong arming users into this scheme, and essentially monetizing each one twice.

“It’s an interesting question which hasn’t been addressed by rule makers currently where the data is anonymized,” said Finnegan. “Consumers are fast understanding the value of their data, even where anonymized, and it remains to be seen as to whether users will grow to expect greater transparency over its monetization”.

“Anonymizing data largely addresses privacy requirements, though it will be interesting to see if user expectations develop in light of the pace of change in the telco market.”

Why there are still numerous questions to be raised around the scheme, this is hardly unusual for the Uber brand, which has is slowly evolving into an ever turning carousel of legislative precedent. Considering the relationship between Uber and its customers is moving away from the traditional OTT model (i.e. data in exchange for free services) it would hardly be surprising to see a whole new sub-segment of regulations appearing down the line.