Communitech photo: Anthony ReinhartView from the ‘Loo: IMS leads way to safer, smarter, greener driving Anthony Reinhart July 24, 2014 Communitech, Small to Mid Size, View from the ‘Loo Photo: Christopher Dell, Director of Product Management for Intelligent Mechatronic Systems, holds a device that plugs into any car and can, among other things, gather data about driver behaviour. If you threw out the term “connected car” back in 1999, blank stares are most often what you’d get back. These days, everyone’s talking about the rapidly expanding world of connected devices – known as the Internet of Things – and how smart technology is revolutionizing our lives, including how we interact with our cars. While the rest of us plodded along unwittingly back in ’99, a University of Waterloo engineering professor, Dr. Otman Basir, was honing his vision for safer, smarter and greener driving. Spurred to action by a serious car accident in his family, Dr. Basir assembled a top-notch team of fellow experts and founded Intelligent Mechatronic Systems (IMS), a Waterloo-based company that now boasts a staff of more than 100 and a product array that speaks to that vision. Today, blank stares have given way to widespread attention and keen consumer interest in how technology from companies like IMS can make driving safer, smarter and greener for all of us. Eager to find out more, I sat down recently with Christopher Dell, IMS’s Director of Product Management, and Stephanie Frisina, Public Relations and Events Specialist for the company. Q – When you say IMS is a “connected-car company,” I’m guessing people grasp that term a lot quicker than they did back in 1999. CD – Absolutely. In 1999, if you had said ‘we’re a connected-car company,’ people had no idea what it meant. Through things like usage-based insurance, things like what Google is doing with Android Auto, and Apple with CarPlay, people are starting to understand it, and automotive OEMs (original equipment manufacturers) are adding more technology in as well. So, it’s becoming a lot more prevalent than it has been in the past. SF – We’re really about driver behaviour. Q – Can you give me an example of a common component of cars today that can be traced back to IMS? CD – One of the first things we commercialized was occupant detection technology that was licensed to some of the auto manufacturers. It detects whether a person is in the passenger seat so it knows whether to deploy an airbag or not. That’s one of the early things that we pioneered back in the early 2000s. Now it’s pretty commonplace, but at the time it was cutting-edge, detecting whether it is your groceries, your spouse, your pet on the front seat, and whether or not to deploy the airbag. Q – How has the connected-car field evolved to where it is now? CD – Today it’s about driver behaviour. Over the last 15 years we’ve evolved from focusing on the major car brands to focusing on some of the first industries that are deploying connected-car technology. Probably the biggest one that we, as consumers, are hearing about is usage-based insurance. It’s a great example, where you’re taking information about how the driver is behaving and information about the vehicle, and then using that to revolutionize the insurance industry. That’s probably our biggest area of investment and our biggest area of focus today, as the first area to adopt connected-car technology. Q – I can see that being a great benefit, because it’s telling you what kind of driver you’re dealing with so that you can adjust the insurance rate accordingly. But has it been a tough sell for the industry in any way, since it could mean lowering premiums for certain drivers? CD – The first thing is, insurance companies are driven by actuaries. It’s all about risk and risk mitigation, and so, actuaries love data. When you see our technology and all the data it can provide, they get very excited; they want all that data. But it’s really about how we filter out what data is relevant to them so that they can get down to determining whether this person is riskier or less risky than what they might think they are, and whether they should offer them a discount based on that driving behaviour. I think there are some things in the industry, as well, that they’re trying to shake out, in terms of what information we should be collecting and what information we are allowed to collect. Q – Privacy is another part of the whole connected-device debate. How do you deal with those issues? CD – The first thing is, usage-based insurance is optional, and people who are looking to obtain a discount are very much focused on opting into it and opting into the technology. The regulators have a certain degree of control over what information gets collected as well, and making sure that privacy is being adhered to. That’s very important, because the last thing we want to do is do anything that harms the consumer experience, or the perception around it. So, we’re only collecting the information that we need and that we’re allowed to collect, and using that information and passing it along to the insurer. Q – Is this something that consumers can use for themselves; for example, parents who don’t want their teenage child driving aggressively or to places they don’t want them to go? CD – Yes, that’s a great example. Using the same base technology, we have a program called IMS Young Drivers Intelligence, and it’s exactly like that. It’s aimed at getting parents and teens to have an objective conversation around their driving behaviour. We’ve all seen the statistics in terms of fatality rates with young drivers. This really allows the parent to deploy the technology, and we provide the new driver and the parent an application where they can see their driving behaviour. It allows them to have an objective conversation around, ‘You know what? That was a risky behaviour,’ or ‘We noticed a couple of events; let’s have a discussion about it.’ A great example: We were working with someone in the industry, and they had a teenage driver and they were testing out the technology. The parents said ‘Hey, we want to talk to you about your driving, because we noticed there were these three braking events in rapid succession.’ So, the son sat down with his parents and said, ‘Well, actually, Mom, that wasn’t me driving that. That was you.’ And so, one of the things our technology allows you to do is have an unemotional conversation about it. We always encourage that open dialogue and that open conversation about it, because it’s a much more effective way to coach the driver and provide constructive feedback in terms of what they may or may not be doing. Q – With everyone jumping on the connected-device trend now, where is IMS situated in relation to its competitors? Did you get a big head start, and have you had to change tack now that this trend is accelerating? CD – We’ve been focused on usage-based insurance as that first vertical since 2005, but we knew that’s market No. 1 of multiple markets for us to go after. We’re always investing in the future, because we know usage-based insurance is the current thing, but that there are four or five other markets coming beyond that. So, we continue to make investments in those areas as well. The pace of innovation, though, with the broader connected-car market has increased significantly, with things like the autonomous vehicle generating interest. And obviously, major companies are involved in it – not just the likes of a Ford or a GM or a Chrysler, but now all of a sudden Google. Q – How does usage-based insurance work? CD – What the insurer gets – or, if we were deploying this as a young drivers program – the parent would actually receive a little device like this , and they would plug it into the OBD-II port in their vehicle – the onboard diagnostic port. Every vehicle since 1996 has one of these ports. It’s normally located in the footwell of the driver compartment, and inside (the device) is an accelerometer, so it can detect motion. It has a GPS, so it can detect location, and it has cellular connectivity as well. And so, it’s tracking vehicle health, vehicle dynamics, RPM, speed, events that are happening with the car in terms of braking or acceleration, and it sends it up (to the cloud). Then our technology basically analyzes it, and it can do all sorts of things. If there’s a geo-fence that’s been established, (the device) can alert a parent or a fleet manager that a vehicle has crossed a defined threshold. If there’s a harsh-braking or acceleration event, it can detect that and provide notification. It uses that information to create scores aimed at a driver to improve their driving behaviour, and an insurance carrier would use some of that score to determine a discount, as well. SF – If I say, ‘Oh, Mom, I’m driving to my best friend’s house close to the University of Waterloo,’ then my mom could get a text message that says, ‘Your vehicle has left Waterloo.’ And then you can go on a map and see that Stephanie actually went to downtown Toronto. That’s how the geo-fencing works. You get a notification. CD – There are all sorts of implications for the technology in terms of how you apply something we’ve done in one space that can apply in a variety of other verticals. For example, those geo-fences – fleet companies that have five vehicles to 500 see that as an opportunity to manage where their drivers are going. Are they taking side trips? Are they taking the company truck that they’re allowed to take home to do side jobs on the weekend? All of a sudden they’re able to have visibility into what’s going on, and manage that asset. SF – People are using it for response times as well. So, if you have 30 vehicles in a certain area, you can be more efficient because you can see where the car is located, and then you can get there a lot faster if you send the right person. So, you’re saving money and you’re saving time. It’s really about the human experience; making people’s lives safer, easier and more energy efficient. CD – Also, because we’re plugged into this diagnostic port, we can determine fuel usage. So, we can give tips on how somebody can be more fuel efficient, and detect how much idling they’ve done. We had a customer, and our product manager was meeting with them. They pulled up our portal where you can see all the vehicles, and they said, ‘We noticed this one vehicle was sitting there idling for 60 minutes.’ And the guy said, ‘Yep, yep, I know.’ And it cost $4 in fuel costs if you added it all up. It was actually the owner’s vehicle, and he said, ‘I knew I was idling, and I knew it cost me money, but I didn’t have a way to articulate what the cost is.’ It’s all about going back to safer, smarter, greener. How can we make that into tangible examples? How can we cut down on fuel costs? How can we make the driving experience safer by giving parents coaching tools, or incenting them through insurance discounts? Q – Does IMS have other locations beyond Waterloo? CD – We have a location in Chicago and we have a number of people located in a number of jurisdictions; for example, we have somebody located in the U.K. looking after our U.K. and European operations. And we have sales folks throughout the U.S. Our innovation teams, our research and development teams, product and marketing teams are all based in Waterloo, and the majority of our company executives are based in Waterloo. Q – Why Waterloo and not someplace else? CD – I think there are a number of factors. The pool of resources we can access – you can’t measure that; it’s very difficult to measure whether you can get that elsewhere. We have co-ops from the University of Waterloo and from Conestoga College, and being able to be so close and get some of those high-calibre resources, and participate in that overall process, is great. We have a very strong university relationship. Our CEO is a professor at the University of Waterloo, and we’ve brought on a number of PhDs who have gone through programs at the University of Waterloo. We have relationships with other universities as well, but I would say that the University of Waterloo is probably our strongest relationship. It’s one of the top engineering schools not just in Canada, but North America, and having that at our back door is fantastic. SF – These are intelligent transportation system experts, world renowned. They have PhDs in this area. As we said, in 1999, no one had ever heard of a connected car. A car was this metal box on wheels. And now it’s become something so familiar to you; it really connects to your digital life. Q – How have you found the Communitech experience thus far? SF – I think the company really appreciates having close connections with the companies Communitech puts us in touch with. We also appreciate being part of the community and supporting businesses that, like ours, were started on the vision of one person. These are invaluable things that Communitech contributes to our organization. CD – Experienced developers, designers, engineers, product managers – Communitech helps facilitate access to these resources, and that’s one of the advantages. We see it in terms of people we recruit and people who go on to other areas, and we’re able to draw from that. Communitech becomes a lot of that core fibre that allows people to really connect. SF – And it’s cool. There’s some really cool stuff going on here, and being just down the street, it rubs off on you. Q – Where is IMS looking to go in the future? CD – This is the fun one. There are a number of different areas. Some of our technology, the same technology we use from a usage-based insurance perspective, or from a young driver’s perspective, can really transform how we do things. Road-usage charging, for example – today, you go through the 407 and there’s these big gantries and they take pictures of your licence plate. We can use this same machine-to-machine technology that we’ve got, that you plug into the car, to do the road-usage tolling. It opens up all sorts of doors for government organizations, because they don’t have to deploy capital-cost-heavy technology. They can provide one of these little devices, and the end user can go in and see their actual driving and relate it back to actual mileage taken, and trip data, as one example. That’s an area we’ve been working on with the Department of Transportation in Oregon, on deployment of that. That’s really exciting, not just from a North American perspective but from a global perspective, because they’re really looking at what’s happening in Oregon as setting the stage for what’s happening in the U.K., or Ontario, or in other markets. That’s one particular area where we see a transformation that will occur, and we’re right there investing and being ready to capitalize on it. The other thing is, those major automotive brands – the Fords, the Hondas, the GMs – you’ll start to see a lot more coming out from them as well, and I think when that happens, the consumer experience, the consumer expectation around what you can do with it, will start to really explode. I think that’s really exciting, where things like geo-fences and driver scoring are commonplace, and everybody’s aware of it. That really helps us in terms of that vision of making not just individual drivers, but networks of drivers, much more efficient and much more safe, and adding the smarts to it. Q – Could this lead into traffic flow management as well, to reduce bottlenecks? CD – We’ve actually done a traffic intelligence solution that’s done exactly that, where it’s looking at driving behaviour and, much like Google Maps does from a crowdsourcing perspective, using the same technology to plot out through the Greater Toronto Area where people are driving and where some of those bottlenecks are. That’s Step 1; we are already there today. The next step is, how do you feed that information back, so that if you know there’s a traffic jam on the DVP, you can exit and reroute it? And if the systems eventually get smart enough, they automatically tell you that and communicate that back, and do it in a way that not everybody gets off at the same exit. That’s where the next generation comes in. Think of the benefits around traffic congestion, fuel economy, how much time people spend commuting. There are huge productivity gains to be had. Anthony Reinhart is Communitech’s Director of Editorial Strategy and senior staff writer. View from the ‘Loo looks at the issues, people and events that shape Waterloo Region’s technology sector. It will appear bi-weekly through the summer.