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Ridesharing Privacy and Auto Insurance
Ridesharing services have made getting across town as easy as the push of a button. They can be more convenient than public transportation because drivers come directly to you, and ridesharing can be a less expensive option than traditional taxis as long as you don’t go when surge pricing exists.
That said, privacy is becoming more of a talking point and rightly so. How do ridesharing apps use your information? And are there other industries like auto insurance that might use the same technology to learn more about you?
Do the benefits outweigh the costs or privacy risks?
When things work well, ridesharing has a lot of benefits. People don’t have to worry about getting a designated driver or buying a car if they don’t need vehicular transportation as often. It makes it easy to get a ride to or from an airport or get around an unfamiliar city.
When you’re requesting a ride during a popular part of the day such as rush hour, late at night, during a major event in your city or on a holiday, you face two problems: one a lack of available drivers, meaning your wait could be a long time until you’re able to secure a ride. And two, if you’re lucky enough to receive a ride, you’ll pay a lot for it. Both of these factors can offset the benefits ridesharing delivers.
These occasional factors might also pale in comparison to your privacy. Have you ever stopped to wonder how Uber or Lyft store your data, and does it run a risk to you?
Is your information safe with ridesharing apps?
Think about the information you must provide when you use these apps. First, you must verify your identity by linking your email address or social media account. Then, you must enable GPS so drivers can find you. You must also provide a facial picture (so the driver can identify you) and payment information.
Here’s where things become tricky. Normally, when you enable an app to have access to your GPS, you do so until you shut down the app’s activity. However, how many times do you do this after a ride from Uber or Lyft?
Unless you go in and manually kill the app’s activity directly after the ride or change the app’s location settings, the app has the ability to track you wherever you go. This could be a data treasure mine for companies who want to study your behavior by examining your activities.
In addition, what if someone hacks into Uber or Lyft’s software? If hackers are able to do this, they would have access to all of your personal information, your payment method and your GPS location. While this may not ever happen, instances of cybercrime continue to rise, as there’s a hacker attack every 39 seconds.
Furthermore, hackers have become more sophisticated in employing ransomware. This demand locks access to a specific computer or server until the victim complies by paying, normally in the form of Bitcoin. Hackers have been able to create data breaches in Baltimore, Equifax and many others. If they can hack them, why couldn’t they hack into a ridesharing company? While users don’t need to be paranoid, people should be cautious using any service that uses personal data.
On the other side of the equation, how do the ridesharing apps handle your information? According to Norton, one provider did an event where they posted real-time information on who was using their platform. So, viewers at the party were privy to where a rider was coming from and where they were going.
Uber also stores your behavioral data to better understand your needs. In essence, this is to make the app more beneficial to you by knowing where you want to go and when you require service to help you get the most out of its use.
Of course, Uber also shares aggregate information (a pool of anonymous data) sent to third parties for industry analysis. One of those industries that could use this data in unique ways is auto insurance.
Auto insurance companies want to cash in
One of the unique factors of ridesharing apps is the technology they employ. Uber’s platform uses a combination of GPS, gyroscope and accelerometer data. This allows the company to monitor a driver’s performance using metrics such as acceleration, speed relative to the limit in the area, rapid braking, length of the drive and time of day.
Some insurance companies are doing the same thing, using telematics to help them develop better risk profiles for prospective drivers.
For example, Root Insurance has a prospective customer download the app and then drive around for a few weeks to a month. During this time, Root collects data on the driver’s behaviors to build a risk profile. Along with how you drive, when you drive is an important consideration as well as how far you drive. During this collection period, Root provides drivers a score with suggestions on how to improve it. If, after the trial period ends, the driver meets the requirements and their driving score is high enough, Root will welcome them with a quote.
This data has the ability to transform the auto insurance industry because it gives providers more data to gauge a driver’s specific behaviors. Using this information will help them build more accurate risk profiles and create pricing models that better reflect that risk.
And these insurance companies have ridesharing apps like Uber to thank for that.
How to protect your privacy
Meanwhile, on the consumer end, there are a couple of ways to protect your privacy more when using these apps. The first of which is to disable the app after using it. You could also uninstall the app if you use ridesharing infrequently.
Alternatively, you could also change the permissions of the app to only allow location access when using it. This means once you stop using the app (manually closing it), it won’t track your location anymore.
All told, having specific data might seem concerning at first, especially if it falls into the wrong hands. However, one ironic element of ridesharing apps is they can predict risk better. In turn, auto insurance companies can employ this data. If you’re a safe driver, you could end up paying far less for car insurance. In some cases, this lower cost for insurance could give you more incentives to drive than to be picked up.