Black boxes in our cars

It was a sunny late spring afternoon during my freshman year in college in 1998. I was traveling back to New York on the Greyhound bus, and next to me was a man in his twenties who turned out to be an MIT graduate student.

The conversation eventually brought us to one of my ideas. He seemed interested, and I was happy to talk to a future engineer. The idea was my first attempt at a far fetched business plan:

1 Create a black box which would record the vehicle's speed, pedal presses, steering wheel position, and its position and orientation in space for the past five minutes while the car is in motion.

2 Create a computer system which would pull the data from such a box and recreate in three dimensional space the path of the car based on its final position.

3 Show the auto insurance companies how they can recreate the scene of a car accident and hopefully decrease their lawyer costs using such a system.

4 Convince insurance companies to offer insurance rate discounts to customers willing to have such a black box installed in their car (as it is done with LoJack).

5 Get the auto manufacturers to preinstall a black box inside their vehicles as a feature. (At that time I was not sure what benefits would auto makers get from doing this)

6 Lobby congress to make a black box in all new cars standardized and mandatory. This was necessary for the next step to happen.

7 Have the black boxes in each car broadcast their current (last 5 seconds) data into the [specialized?] cell phone towers.

8 The data would be fed into a powerful "chess-brain" computer. Such a computer would be capable of monitoring traffic patterns and sending "traffic-jam ahead" warnings to approaching vehicles.

9 End result: Implement self-driving cars. If the car (or the "chess brain" computer behind it) knows the current actions and positions of all the surrounding vehicles, proper adjustments in speed and directions as well as changes in overall route can be made on the fly. The traffic would always move in the most optimized fashion possible.

I knew then that the biggest things missing from this plan were the immediate incentives for drivers to give up their ideas of privacy and the clear financial incentives for the insurance companies. Thanks to Slashdot I found these missing pieces of the puzzle: Pay-as-you-drive car insurance. A black box with an additional feature of tracking its location via GPS allows the insurance company to bill you based on the level of danger of the roads you take. The amount of driving will of course be taken into account as well.

Our Managerial Accounting professor always emphasized the importance of eliminating what she called "peanut butter costing" in order to separate true profit making parts of the business from the money loosing ones. Pay-as-you-drive insurance allows the insurance companies to implement such a system and clearly assess liability potential for each driver. Drivers on the other hand will be lured by potential savings.

Given this key incentive, I can't wait for someone to implement my plan... I know the gears are already turning - Progressive is working on it.

More information, discussion on the topic, and the current state of affairs here:

Slashdot Discussion 1
Slashdot Discussion 2
Slashdot Discussion 3
Slashdot Discussion 4
October 5th, 2006 (~8.5 years later): Pay as you drive GPS enabled insurance launches in UK Since Reuters link is dead, here is the company: Norwich Union
Clarion DRC-3 DriveEye Camera captures 20 seconds of video before and after the accident jolt (as does Fujitsu DREC1000)