Is Your Car Going to Spy on You?

James Greiff is an editor for Bloomberg View. He was Wall Street news team leader at Bloomberg News and senior editor for Bloomberg Markets magazine. He previously reported on banking for the St. Petersburg Times and the Charlotte Observer.
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To repair America's crumbling roads and bridges, several states and the federal government are toying with the idea of charging drivers by the mile, using data sent from black boxes in every vehicle. It's a laudable idea, in principle. But supporters are going to have to give more thought to the privacy issues raised by mandating devices capable of plotting your car's location and reporting on how you are driving it.

The objective is to find a way to augment the money raised by the federal gasoline tax, which has been stuck at 18.4 cents a gallon since 1993. Meanwhile, many U.S. roads are in subpar shape and more than a fifth of our bridges have outlived their useful life or are deemed structurally deficient. The national Highway Trust Fund, underfunded by the gas tax, is being kept alive only through Congress largess and will be broke by 2015.

Since it's virtually impossible to increase anything called a "tax," states such as California and 17 others along the I-95 corridor are studying whether to put black boxes in cars and charge a user fee that would be earmarked for improving our roads.

Some argue that this would unfairly penalize drivers who bought cars that get better fuel economy. That's true, but it's not persuasive: the downside of improved efficiency is that people tend todrive their cars more, putting added wear and tear on the nation's highways. A user charge makes up for this additional travel, one of the reasons Bloomberg View's editorial board supports the concept. Fees also would offset what might be called the Tesla cost -- vehicles that don't run on oil-based fuels skirt taxes at the pump while using the nation's roads for free.

A more significant hurdle is the privacy issues. Perhaps predictably, those on the far left and right -- that would be the American Civil Liberties Union and the Tea Party -- are up in arms against the plan. Others may not see why this is such a big deal: After all, we drive around with location services running on our smartphones, use GPS navigators that pinpoint our coordinates, and buy gas with credit cards that leave an electronic record on information networks and bank databases

The difference with the other technologies that reveal our whereabouts is that they retain user choice: You can turn off your mobile phone or the location-service function, consult a road map or buy gas with cash. If the public is going to accept black boxes in their cars, the designers will have to give a comparable level of control to consumers.

So supporters of the mileage-tax concept should ditch any plans to have the boxes do more than count the miles, such as sending signals on how a car is driven -- hard braking, fast acceleration, excessive speed and aggressive cornering.

It's clear why this might information would be valuable: It could help insurers set rates adjusted for risk, and could make it easier for the police to monitor traffic violations and catch criminals. But it's a step too far, in that it runs afoul of that well-known foundational American principle: What we do and where we go in our cars is our business and nobody else's.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
James Greiff at jgreiff@bloomberg.net