Tantalum CEO Talks What’s Working (And What’s Not) In The Connected Automotive Ecosystem

One might have to squint, but they can certainly see it coming — for real (not just hype) in some press release, interview, film or TV show.

The push to bring connected vehicles to more consumers — vehicles that can enable their own fuel payments, parking arrangements, restaurant reservations and other such tasks — is significant. It’s advanced enough (even if still in early stages) that one can see how cars and trucks outfitted with the latest software, integrated with the latest payment and commerce tools (including voice-assistant technology), can one day become actual extensions of consumers’ homes, which are also getting smarter.

If one can see that, they can probably see this as well: The rise of connected vehicles, to be followed by the spread of autonomous cars and trucks (at least, according to most observers), will bring drastic changes to the automotive industry. Those changes, of course, have already started.

In a new PYMNTS interview, Ozgur Tohumcu, CEO of Tantalum, a provider of connected car technology, took Karen Webster on a long drive through this emerging ecosystem, and discussed what ongoing trends mean for the future.

New Platform

Tantalum recently made news in the connected vehicle world. In collaboration with HARMAN and AT&T, the company helped launch a platform designed to make most vehicles that were manufactured since 1996 into connected automobiles via LTE. The platform enables such tasks as roadside assistance, parking reservations and payments, driving feedback and a virtual mechanic feature.

“This is a big achievement for us,” he said, “especially the payments part.”

According to Tohumcu during the interview, Tantalum serves as the “merchant of record” for the transactions done via the company’s connected vehicle platform, with JPMorgan as the acquiring bank partner. Payment services firm Paymetric and software company SAP are also involved with the platform, as an example of the participation and complexity required for this emerging ecosystem of connected vehicles.

Parking, of course, is a strong place to start — a good way to win over drivers and show the appeal of the platform. Tohumcu said drivers, using voice recognition (more about that in a bit), can use the platform to “find parking at a garage we have an agreement with.” Upon arrival, the gate opens after a driver’s license plate is recognized, then payment is later added to that driver’s stored payment card account. “All you have to do in the whole user experience is to find parking through voice recognition,” he said.

Roadside service and what Tohumcu called a “accident management concierge service” are both early features of the connected vehicle platform as well. “We will add insurance in early 2019, and repair and maintenance,” he told Webster.

OEM Changes

Appealing digital services are not all that is required during this shift to connected, then autonomous, vehicles. Automotive manufacturers are in a new spot now. They must figure out how to work with newer technologies to bring those (ideally) seamless payment and commerce experiences to drivers — drivers trained by the likes of Amazon and Uber to expect little transactional friction, no less.

That’s a relationship question as much as it is a technology question. Yes, original equipment manufacturers (OEMs) are indeed focused on connected cars, with an increase of public activity coming within the last year, along with a strong focus on electric and autonomous vehicles. However, such a focus is requiring OEMs to rethink how they have been doing business for decades, as well as their “end relationship to customers,” Tohumcu said.

For instance, the data collection conducted via connected vehicles promises to tie drivers more closely to OEMs than dealerships. “You are cutting dealerships out of the equation,” he said, and OEMs are having to decide what software to install in their new models.

“The industry is going through a massive transition,” Tohumcu said. “It’s almost like a perfect storm.” By that, he wasn’t speaking in a negative sense, but describing the size of the business opportunity as the ecosystem changes.

Voice assistance and recognition will likely play a significant role in this emerging automotive ecosystem. The reason is obvious: No one wants drivers to take their hands away from the steering wheel — at least, not until autonomous vehicles take to the roads. However, getting there is easier said than done. Some OEMs will want, or try, to create their own software and systems, though a much more pragmatic path seems to be integrated with the technology that is already out there.

The Role of Voice

After all, PYMNTS has reported that nearly a third of consumers own a voice-controlled assistant, technology that also promises to play a big role in the 2018 holiday shopping season (further adding to its popularity). Moreover, the smart speaker installed base is expected to near the 100 million mark by the end of 2018, representing close to 2.5 times the installed base at the end of last year.

Consumers’ increasing use of smart speakers and voice assistant technology makes it more likely that consumers will want to use the same tools and brands inside their vehicles, which in turn promotes seamless transactions. OEMs cannot “keep cars as a closed environment anymore, which is what car companies did for years,” Tohumcu said. That means OEMs will likely go for integration deals with the likes of Amazon, Google and Microsoft — all of which are familiar to consumers, either via their payment and commerce activities at home or through their work.

“Google is a little bit too consumer-centric, so that might help Microsoft, which is a little bit more enterprise,” Tohumcu said when asked how battles over automotive operating systems might play out. “People will want to see the brand and user experience they use outside the car inside the car, and that applies to voice assistance as well.”

In fact, that would help connect a vehicle to the driver’s increasingly smart home, allowing them to, say, set the web-connected thermostat while 10 minutes away from pulling into the garage. Familiarity and integration promote the ideal that a connected vehicle can become an extension of the home.

Commerce, of course, will be a big part of any successful ecosystem. One challenge there, as discussed by Webster and Tohumcu, is the relative difficulty of signing up local businesses to in-vehicle systems. The ability to order a restaurant meal from the vehicle, then quickly pick it up, stands as an example of desirable commerce.

In addition, commerce inside vehicles needs to become much more personalized than it is now. To illustrate that goal, Tohumcu discussed how commerce systems inside high-end vehicles — those costing perhaps $80,000 — have been known to offer drivers 50-cent discounts off such products as donuts and coffee. The technology must be able to determine “who the actual driver is” and tailor the commerce capabilities around that knowledge, he said.

Autonomy Rising

So, what’s next, then? That would be autonomous vehicles.

Tohumcu said that “level four” autonomy — generally, a car or truck operates on its own, depending on road type or geographic area, with humans ready to take the wheel if needed, but otherwise riding as a passenger — will have been introduced by all automotive brands, at least in some models, no later than 2022. China will play an even bigger part in bringing about that future, Tohumcu said, partly because testing the technology in that country often comes with fewer regulatory hurdles.

That’s the real game-changer. According to PYMNTS research, consumers are not only willing to buy such vehicles (more than half of consumers said they would), but 20 percent would shop more, given the new free time they would have while being driven to their destinations. The PYMNTS Digital Drive Report also found that 66 percent of commuters who make mobile order-ahead purchases today would do so more often if commerce was available in their vehicle — another promising sign for how the emerging automotive ecosystem could benefit commerce.

That future requires a lot of work and thinking, of course. New business relationships are certain to crop up, and companies will learn what works for real and what sounded better on paper. However, a new ecosystem is being created, and some of the outlines are becoming clear.