Platform Innovation // Blog

Car Manufacturers Need to Open Up Their APIs

Soon, car owners will demand car software platforms. Car manufacturers will have to open up their API to third party developers, or lose to competitors who make that move first. 

Every year more and more devices are becoming “smart”. Today’s consumers are buying smart TVs, smart speakers, and even smart dishwashers and smart refrigerators.

However, the level of sophistication and connectivity varies widely across these devices. Smart TVs and smart speakers connect directly to app marketplaces. However, smart refrigerators and microwaves connect to other devices such as phones and TVs in order to stream videos or share data.

Currently, cars are closer to the latter model, but not for long. With the richness of data and customer interaction cars offer, they will soon fit into the former category. No one has yet successfully built a platform that connects these apps with consumers through the vehicle, but it’s clear that the demand is there. Already there are numerous car-related apps that provide car owners with services they want.

For example, Turo, Getaround, and Zipcar are car-sharing apps that connect car owners to borrowers through a marketplace. Viper Smart Start is an app that offers remote locking, unlocking, and engine start. And Fuelly and Car Minder Plus are maintenance and fuel tracking apps that drivers use to get the most mileage out of their cars.

Opening Up the Vehicle

Many of these apps and services are still in early stages. Why? Because a huge customer pain point is still unsolved.  All of these apps use clunky work-arounds for the fact that the cars themselves cannot yet be connected to the app. Instead, drivers connect through their phones. This lack of connectivity is a big problem for consumers, with issues ranging from simple inconvenience to more critical issues like vehicle security.

For example, in order for Zipcar to work well, it need to grant access to its cars to verified drivers without having to arrange in-person pick up and drop off. If drivers could remotely lock and unlock the car through an app, the problem would be solved. But they cannot, and in response Zipcar uses a card system, not unlike hotels, to lock and unlock cars. This process makes joining Zipcar difficult. Zipcar has to mail each new customer a keycard, which can take a week or more to arrive.

Additionally, this approach creates serious safety problems. Consumers use the keycard to unlock the door, but the keys to the engine remain inside the car at all times. If that seems like a security risk, that’s because it is. Zipcar has been dealing with car theft for years.

By contrast, Viper Smart Start can remotely lock and unlock your car. The catch? You need professional installation, which can be time consuming and inconvenient – and it could void the car’s warranty. By installing this hardware, you are essentially ‘jailbreaking’ your car. Buyer beware.

Finally, car owners who want to keep track of maintenance and fuel information must manually enter their data into their phones for Fuelly and Car Minder Plus to crunch the numbers. Alternatively, users must buy expensive plug-in hardware devices that then connect to the phone. The process could be automated and made more accurate if the car itself was sending information to whichever apps the owner wants to use.

The Platform Approach Will Win

Given the growing popularity of car-service apps, it’s clear that consumers want these services. Car manufacturers can either build all of these apps themselves or open up their API to third-party apps.

General Motors has mostly taken the former approach by launching proprietary apps for everything from car sharing to fuel services. However, it’s unlikely that one company will build and offer every service that consumers will want. That would be like one company building all the apps on your iPhone. Instead, the company that opens up its vehicle APIs to third-party developers and service providers will win by providing the most value to consumers.

Car manufacturers that open their APIs to apps in a safe and secure way will have a significant advantage over their competitors.

This pattern has already played out in other industries where value has shifted from hardware to software. And there’s little reason to believe the auto industry will ultimately be different.

Take the example of smart phones at the start of the century. Spec wise, Blackberries were a great phone, and their proprietary apps were well reviewed, especially Blackberry Messenger. Yet, once Apple and then Android opened their app stores to third-party developers, Blackberry couldn’t compete, because consumers didn’t want to be limited to Blackberry’s suite of products. Eventually, Blackberry was forced to open its own app store, but it struggled to gain traction in a market that had already left it behind.

The car industry will soon tell a parallel tale. The first car manufacturers that open their APIs to apps in a safe and secure way will have a significant advantage over their competitors.  Car specs alone won’t sway consumer decisions. In the very near future, if a car can’t connect to an app or service, it won’t connect with the everyday driver.

Car manufacturers face an existential choice: be a Blackberry or be a Google. For those who choose the latter, Applico can help get you there, fast. Contact us for a consultation.

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