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April 21, 2019
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African e-commerce startup Jumia’s shares open at $14.50 in NYSE IPO

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Pan-African e-commerce company Jumia listed on the New York Stock Exchange today, with shares beginning trading at $14.50 under ticker symbol JMIA. This comes four weeks after CEO Sacha Poignonnec confirmed the IPO to TechCrunch and Jumia filed SEC documents.

With the public offering, Jumia becomes the first startup from Africa to list on a major global exchange.

In an updated SEC filing, Jumia indicated it is offering 13,500,000 ADR shares, for an opening price spread of $13 to $16 per share, representing 17.6 percent of all company shares. The IPO could raise up to $216 million for the internet venture.

Since the original announcement (and reflected in the latest SEC docs), Mastercard Europe pre-purchased $50 million in Jumia ordinary shares.

The IPO creates another milestone for Jumia. The company became the first African startup unicorn in 2016, achieving a $1 billion valuation after a funding round that included Goldman Sachs, AXA and MTN.

There’s a lot to breakdown on Jumia’s going public. The company is often dubbed the “Amazon of Africa,” and like Amazon, Jumia comes with its own mixed buzz. Jumia’s SEC F-1 prospectus offers us more insight into the venture, and perhaps any startup from Africa, thus far.

About Jumia

Founded in Lagos in 2012 with Rocket Internet  backing, Jumia now operates multiple online verticals in 14 African countries. Goods and services lines include Jumia Food (an online takeout service), Jumia Flights (for travel bookings) and Jumia Deals (for classifieds). Jumia processed more than 13 million packages in 2018, according to company data.

Jumia’s original co-founders included Nigerian tech entrepreneurs Tunde Kehinde and Raphael, but both departed in 2015 to form other startups in fintech and logistics.

Starting in Nigeria, the company created many of the components for its digital sales operations. This includes its JumiaPay payment platform and a delivery service of trucks and motorbikes that have become ubiquitous with the Lagos landscape. Jumia has extended this infrastructure as an e-commerce fulfillment product called Jumia Services.

Jumia has also opened itself up to Africa’s traders by allowing local merchants to harness Jumia to sell online. The company has over 80,000 active sellers on the platform using the company’s payment, delivery, and data-analytics services, Jumia Nigeria CEO Juliet Anammah told TechCrunch a previously.

The most popular goods on Jumia’s shopping site include smartphones, washing machines, fashion items, women’s hair care products, and 32-inch TVs, according to Anammah.

Jumia an African startup?

Like Amazon, Jumia brings its own mix of supporters and critics. On the critical side, there are questions of whether it’s actually an African startup. The parent for Jumia Group is incorporated in Germany and current CEOs Jeremy Hodara and Sacha Poignonnec are French.

On the flipside, original Jumia co-founders (Kehinde and Afeodor) are African. The company is headquartered (and also incorporated) in Africa (Lagos), operates exclusively in Africa, pays taxes on the continent, employs 5,128 people in Africa (page 125 of K-1), and the CEO of its largest country operation (Nigeria) Juliet Anammah is Nigerian.

The Africa authenticity debate often shifts into questions of a Jumia diversity deficit, which is of course important from Silicon Valley to Nairobi. The company’s senior management and board is a mix of Africans and expats. Golden State Warriors basketball player and tech investor Andre Iguodala joined Jumia’s board this spring with a priority on “diversity and making sure the African culture is in the company,” he told TechCrunch.

Can Jumia turn a profit?

The Jumia authenticity and diversity debates will no doubt roll on. But the biggest question—the driver behind the VC, the IPO, the founders, and the people buying Jumia’s shares—is whether the startup can generate profits and ROI.

Obviously some of the world’s top venture investors, such as Jumia backers Goldman, AXA, and Mastercard, think so. But for Jumia skeptics, there are the big losses. The company has generated years and years of losses, including negative EBITDA of €172 million in 2018 compared to revenues of €139 that same year.

To be fair to Jumia, most startups (e-commerce startups in particular) rack up losses for years before getting into the black. And operating in a greenfield sector in Africa—where it had to create much of the surrounding infrastructure to do B2C online sales—has presented higher costs for Jumia than e-commerce startups elsewhere.

On the prospects for Jumia’s profitability, two things to watch will be Jumia’s fulfillment expenses and a shift to more revenue from its non-goods-delivery services, which offer lower unit costs and higher-margins. Per Jumia’s SEC F-1 index (see above) freight and shipping make up over half of its fulfillment expenses.

So Jumia has not turned a profit but its revenues have increased steadily, up 11 percent to €93.8M (roughly $106.2 million) in 2017 and up again to €130M (or $147 million) in 2018. If the company boosts customer acquisition and lowers fulfillment costs—which could come from more internet services revenue and platform investment with IPO capital—it could close the gap between revenues and losses. This reflects the equation for most e-commerce startups. With the IPO Jumia will have to publish its first full public financials in 2019, which will provide a better picture of profitability prospects.

Jumia’s IPO and African e-commerce?

There’s is, of course, a bigger play in Jumia’s IPO. One connected to global e-commerce and the future of online retail in Africa.

Jumia going public comes as Africa’s e-commerce landscape has seen its share of ups and downs, notably several failures in DealDey shutting down and the distressed acquisition of Nigerian e-commerce hopeful Konga.com.

As for the big global names, Alibaba has talked about Africa expansion, but for the moment has not entered in full.

Amazon  offers limited e-commerce sales on the continent, but more notably, has started offering AWS services in Africa.

And this week, DHL came on the scene launching its Africa eShop platform with 200 global retailers on board, in partnership with MallforAfrica’s Link Commerce fulfillment service.

Competition to capture Africa’s digitizing consumer markets—expected to spend $2 billion online by 2025, according to McKinsey—could get fierce, with more global entries, acquisitions, and competition on fulfillment services all part of the mix.

And finally, the outcome of Jumia’s IPO carries weight even for its competitors. “Many things, like business decisions and VC investments across Africa’s e-commerce sector are on on hold,” an African e-commerce exec told TechCrunch on background.

“Everyone’s waiting to see what happens with Jumia’s IPO and how they perform,” the exec said.

So the share-price connected to NYSE ticker sign JMIA could reflect not just investor confidence in Jumia, but investor confidence in African e-commerce overall.

News Source = techcrunch.com

How to stop robocalls spamming your phone

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No matter what your politics, beliefs, or even your sports team, we can all agree on one thing: robocalls are the scourge of modern times.

These unsolicited auto-dialed spam calls bug you dozens of times a week — sometimes more — demanding you “pay the IRS” or pretend to be “Apple technical support.” Even the now-infamous Chinese embassy scam, recently warned about by the FBI, has gained notoriety. These robocallers spoof their phone number to peddle scams and tricks — but the calls are real. Some 26 billion calls in 2018 were robocalls — up by close to half on the previous year. And yet there’s little the government agency in charge — the Federal Communications Commission — can do to deter robocallers, even though it’s illegal. Although the FCC has fined robocallers more than $200 million in recent years but collected just $6,790 because the agency lacks the authority to enforce the fines.

So, tough luck — it’s up to you to battle the robocallers — but it doesn’t have to be a losing battle. These are the best solutions to help keep the spammers at bay.

YOUR CARRIER IS YOUR FIRST CALL

Any winds of change will come from the big four cell giants: AT&T, Sprint, T-Mobile, and Verizon (which owns TechCrunch).

Spoofing happens because the carriers don’t verify that a phone number is real before a call crosses their networks. While the networks are figuring out how to fix the problem — more on that later — each carrier has an offering to help prevent spam calls.

Here are what they have:

AT&T‘s Call Protect app, which requires AT&T postpaid service, provides fraud warnings, and spam call screening and blocking. Call Protect is free for iOS and Android. AT&T also offers Call Protect Plus for $3.99 a month which offers enhanced caller ID services and reverse number lookups.

Sprint lets customers block or restrict calls through its Premium Caller ID service. It costs $2.99 per month and can be added to your Sprint account. You can then download the app for iOS. A Sprint spokesperson told TechCrunch that Android users should have an app preinstalled on their devices.

T-Mobile doesn’t offer an app, but provides a call screening to alert customers to potentially scammy or robocalled incoming calls. (Image: Farknot_Architect/Getty Images)

T-Mobile already lets you know when an incoming call is fishy by displaying “scam likely” as the caller ID. Better yet, you can ask T-Mobile to block those calls before your phone even rings using Scam Block. Customers can get it for free by dialing #662# from your device.

Verizon‘s Call Filter is an app that works on both iOS — though most Android devices sold through the carrier already have the app preinstalled. The free version detect and filter spam calls, while its $2.99 a month version gives you a few additional features like its proprietary “risk meter” to help you know more about the caller.

There are a few caveats you should consider:

  • These apps and services won’t be a death blow to spam calls, but they’re meant to help more than they hurt. Your mileage may vary.
  • Many of the premium app features — such as call blocking — are already options on your mobile device. (You can read more about that later.) You may not need to pay even more money on top of your already expensive cellular bill if you don’t need those features.
  • You may get false positives. These apps and services won’t affect your ability to make outbound or emergency calls, but there’s a risk that by using a screening app or service you may miss important phone calls.

WHAT YOU CAN DO

You don’t have to just rely on your carrier. There’s a lot you can do to help yourself.

There are some semi-obvious things like signing up for free to the National Do Not Call Register, but robocallers are not marketers and do not follow the same rules. You should forget about changing your phone number — it won’t help. Within days of setting up my work phone — nobody had my number — it was barraged with spam calls. The robocallers aren’t dialing you from a preexisting list; they’re dialing phones at random using computer-generated numbers. Often the spammers will reel off a list of numbers based off your own area code to make the number look more local and convincing. Sometimes the spoofing is done so badly that there are extra digits in the phone numbers.

Another option for the most annoying of robocalls is to use a third-party app, one that screens and manages your calls on your device.

There are, however, privacy tradeoffs with third-party apps. Firstly, you’re giving information about who calls you — and sometimes who you call — to another company that isn’t your cell carrier. That additional exposure puts your data at risk — we’ve all seen cases of cell data leaking. But the small monthly cost of the apps are worth if it means the apps don’t make money off your data, like serving you ads. Some apps will ask you for access to your phone contacts — be extremely mindful of this.

The three apps we’ve selected balance privacy, cost and their features.

  • Nomorobo has a constantly updated database of more than 800,000 phone numbers which lets the app proactively block against spammy incoming calls while still allowing legal robocalls through, like school closures and emergency alerts. It doesn’t ask for access to your contacts unlike other apps, and can also protect against spam texts. It’s $1.99 per month but comes with a 14-day free trial. Available for iOS and Android.
  • Hiya is an ad-free spam and robocall blocker that powers Samsung’s Smart Call service. Hiya pulls in caller profile information to tell you who’s calling. The app doesn’t automatically ask for access to your contacts but it’s an option for some of the enhanced features, though its privacy policy says it may upload them to its servers. The app has a premium feature set at $2.99 per month after a seven-day trial. Available for iOS and Android.
  • RoboKiller is another spam call blocker with a twist: it has the option to answer spam calls with prerecorded audio that aims to waste the bot’s time. Better yet, you can listen back to the recording for your own peace of mind. The app has more than 1.1 million numbers in its database. The app was awarded $25,000  by the Federal Trade Commission following a contest at security conference Def Con in 2015. RoboKiller’s full feature set can be found on iOS but is slowly rolling out to Android users. The app starts at $0.99 per month. Available for iOS and Android

You may find one app better than another. It’s worth experimenting with each app one at a time, which you can do with their free trials.

WHAT YOUR PHONE CAN DO FOR YOU

There are some more drastic but necessary options at your disposal.

Both iOS and Android devices have the ability to block callers. On one hand it helps against repeat offenders, but on the other it’s like a constant game of Whac-a-Mole. Using your in-built phone’s feature to block numbers prevents audio calls, video calls and text messages from coming through. But you have to block each number as they come in.

How to block spam calls on an iPhone (left) and filter spam calls on Android (right).

Some Android versions are different, but for most versions you can go to Settings > Caller ID & Spam and switch on the feature. You should be aware that incoming and outgoing call data will be sent to Google. You can also block individual numbers by going to Phone > Recents and tapping on each spam number to Block and Report call as spam, which helps improve Google spam busting efforts.

iPhones don’t come with an in-built spam filter, but you can block calls nonetheless. Go to Phone > Recents and tap on the information button next to each call record. Press Block this caller and that number will not be able to contact you again.

You can also use each device’s Do Not Disturb feature, a more drastic technique that blocks calls and notifications from bugging you when you’re busy. This feature for both iOS and Android block calls by default unless you whitelist each number.

How to enable Do Not Disturb on an iPhone (left) and Android (right).

In Android, swipe down from the notifications area and hit the Do Not Disturb icon, a bubble with a line through it. To change its settings, long tap on the button. From here, go to Exceptions > Calls. If you want to only allow calls from your contacts, select From contacts only or From starred contacts only for a more granular list. Your phone will only ring if a contact in your phone book calls you.

It’s almost the same in iOS. You can swipe up from your notifications area and hit the Do Not Disturb icon, shaped as a moon. To configure your notifications, go to Settings > Do Not Disturb and scroll down to Phone. From here you can set it so you only Allow Calls From your contacts or your favorites.

WHAT THE REGULATORS CAN DO

Robocalls aren’t going away unless they’re stamped out at the source. That requires an industry-wide effort — and the U.S. just isn’t quite there yet.

You might be surprised to learn that robocalls aren’t nearly as frequent or as common in the Europe. In the U.K., the carriers and the communications regulator Ofcom worked together in recent years to pool their technical and data sharing resources to find ways to prevent misuse on the cell networks.

Collectively, more than a billion calls have been stopped in the past year. Vodafone, one of the largest networks in Europe, said the carrier prevents around two million automated calls from reaching customers each day alone.

“In the U.K., the problem has been reduced by every major operator implementing techniques to reject nuisance calls,” said Vodafone’s Laura Hind in an email to TechCrunch. “These are generally based on evidence from customer complaints and network heuristics.”

Though collaboration and sharing spam numbers is important, technology is vital to crushing the spammers. Because most calls nowadays rely in some way on voice-over-the-internet, it’s easier than ever to prevent spoofed calls. Ofcom, with help from privacy regulator the Information Commissioner’s Office, plans to bring in technical solutions this year to bring into effect caller authentication to weed out spoofed spam calls.

The reality is that there are solutions to fix the robocall and spammer problem. The downside is that it’s up to the cell carriers to act.

Federal regulators are as sick of the problem as everyone else, ramping up the pressure on the big four to take the situation more seriously. Earlier this year, the Federal Communications Commission chairman Ajit Pai threatened “regulatory intervention” if carriers don’t roll out a system that properly identifies real callers.

One authentication system would make call spoofing nearly impossible, known as Secure Telephone Identity Revisited and Signature-based Handling of Asserted Information Using Tokens — or STIR/SHAKEN. The system relies on every phone number having a unique digital signature which, when checked against the cell networks will prove you are a real caller. The carrier then approves the call and patches it through to the recipient. This happens near-instantly.

The carriers have so far promised to implement the protocol, though the system isn’t expected to go into effect across the board for months — if not another year. So far only AT&T and Comcast have tested the protocol — with success. But there is still a way to go.

Until then, don’t let the spammers win.

Cybersecurity 101 - TechCrunch

News Source = techcrunch.com

African e-commerce startup Jumia files for IPO on NYSE

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Pan-African e-commerce company Jumia filed for an IPO on the New York Stock Exchange today, per SEC documents and confirmation from CEO Sacha Poignonnec to TechCrunch.

The valuation, share price and timeline for public stock sales will be determined over the coming weeks for the Nigeria-headquartered company.

With a smooth filing process, Jumia will become the first African tech startup to list on a major global exchange.

Poignonnec would not pinpoint a date for the actual IPO, but noted the minimum SEC timeline for beginning sales activities (such as road shows) is 15 days after submitting first documents. Lead adviser on the listing is Morgan Stanley .

There have been numerous press reports on an anticipated Jumia IPO, but none of them confirmed by Jumia execs or an actual SEC, S-1 filing until today.

Jumia’s move to go public comes as several notable consumer digital sales startups have faltered in Nigeria — Africa’s most populous nation, largest economy and unofficial bellwether for e-commerce startup development on the continent. Konga.com, an early Jumia competitor in the race to wire African online retail, was sold in a distressed acquisition in 2018.

With the imminent IPO capital, Jumia will double down on its current strategy and regional focus.

“You’ll see in the prospectus that last year Jumia had 4 million consumers in countries that cover the vast majority of Africa. We’re really focused on growing our existing business, leadership position, number of sellers and consumer adoption in those markets,” Poignonnec said.

The pending IPO creates another milestone for Jumia. The venture became the first African startup unicorn in 2016, achieving a $1 billion valuation after a $326 funding round that included Goldman Sachs, AXA and MTN.

Founded in Lagos in 2012 with Rocket Internet backing, Jumia now operates multiple online verticals in 14 African countries, spanning Ghana, Kenya, Ivory Coast, Morocco and Egypt. Goods and services lines include Jumia Food (an online takeout service), Jumia Flights (for travel bookings) and Jumia Deals (for classifieds). Jumia processed more than 13 million packages in 2018, according to company data.

Starting in Nigeria, the company created many of the components for its digital sales operations. This includes its JumiaPay payment platform and a delivery service of trucks and motorbikes that have become ubiquitous with the Lagos landscape.

Jumia has also opened itself up to traders and SMEs by allowing local merchants to harness Jumia to sell online. “There are over 81,000 active sellers on our platform. There’s a dedicated sellers page where they can sign-up and have access to our payment and delivery network, data, and analytic services,” Jumia Nigeria CEO Juliet Anammah told TechCrunch.

The most popular goods on Jumia’s shopping mall site include smartphones (priced in the $80 to $100 range), washing machines, fashion items, women’s hair care products and 32-inch TVs, according to Anammah.

E-commerce ventures, particularly in Nigeria, have captured the attention of VC investors looking to tap into Africa’s growing consumer markets. McKinsey & Company projects consumer spending on the continent to reach $2.1 trillion by 2025, with African e-commerce accounting for up to 10 percent of retail sales.

Jumia has not yet turned a profit, but a snapshot of the company’s performance from shareholder Rocket Internet’s latest annual report shows an improving revenue profile. The company generated €93.8 million in revenues in 2017, up 11 percent from 2016, though its losses widened (with a negative EBITDA of €120 million). Rocket Internet is set to release full 2018 results (with updated Jumia figures) April 4, 2019.

Jumia’s move to list on the NYSE comes during an up and down period for B2C digital commerce in Nigeria. The distressed acquisition of Konga.com, backed by roughly $100 million in VC, created losses for investors, such as South African media, internet and investment company Naspers .

In late 2018, Nigerian online sales platform DealDey shut down. And TechCrunch reported this week that consumer-focused venture Gloo.ng has dropped B2C e-commerce altogether to pivot to e-procurement. The CEO cited better unit economics from B2B sales.

As demonstrated in other global startup markets, consumer-focused online retail can be a game of capital attrition to outpace competitors and reach critical mass before turning a profit. With its unicorn status and pending windfall from an NYSE listing, Jumia could be better positioned than any venture to win on e-commerce at scale in Africa.

News Source = techcrunch.com

Over a quarter of U.S. adults now own a smart speaker, typically an Amazon Echo

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U.S. smart speaker owners grew 40 percent over 2018 to now reach 66.4 million – or 26.2 percent of the U.S. adult population – according to a new report from Voicebot.ai and Voicify released this week, which detailed adoption patterns and device market share. The report also reconfirmed Amazon Echo’s lead, noting the Alexa-powered smart speaker grew to a 61 percent market share by the end of last year – well above Google Home’s 24 percent share.

These findings fall roughly in line with other analysts’ reports on smart speaker market share in the U.S. However, because of varying methodology, they don’t all come back with the exact same numbers.

For example, in December 2018, eMarketer reported the Echo had accounted for nearly 67 percent of all U.S. smart speaker sales in 2018. Meanwhile, CIRP last month put Echo further ahead with a 70 percent share of the installed base in the U.S.

Though the percentages differ – the overall trend is that Amazon Echo remains the smart speaker to beat.

While on the face of things this appears to be great news for Amazon, Voicebot’s report did note that Google Home has been closing the gap with Echo in recent months.

Amazon Echo’s share dropped nearly 11 percent over 2018 while Google Home made up for just over half that decline with a 5.5 percent gain, and “other” devices making up the rest. This latter category, which includes devices like Apple’s HomePod and Sonos One, grew last year to now account for 15 percent of the market.

That said, the Sonos One has Alexa built in, so it may not be as bad for Amazon as the numbers alone seem to indicate. After all, Amazon is selling its Echo devices at cost or even a loss to snag more market share. The real value over time will be in controlling the ecosystem.

The growth in smart speakers is part of a larger trend towards voice computing and smart voice assistants – like Siri, Bixby and Google Assistant – which are often accessed on smartphones.

A related report from Juniper Research last month estimated there will be 8 billion digital voice assistants in use by 2023, up from the 2.5 billion in use at the end of 2018. This is due to the increased use of smartphone assistants as well as the smart speaker trend, the firm said.

Voicebot’s report also saw how being able to access voice assistance on multiple platforms was helping to boost usage numbers.

It found that smart speaker owners used their smartphone’s voice assistant more than those who didn’t have a smart speaker in their home. It seems consumers get used to being able to access their voice assistants across platforms – now that Siri has made the jump to speakers and Alexa to phones, for instance.

The full report is available on Voicebot.ai’s website here.

News Source = techcrunch.com

Taxing your privacy

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Data collection through mobile tracking is big business and the potential for companies helping governments monetize this data is huge. For consumers, protecting yourself against the who, what and where of data flow is just the beginning. The question now is: How do you ensure your data isn’t costing you money in the form of new taxes, fees and bills?  Particularly when the entity that stands to benefit from this data — the government — is also tasked with protecting it?

The advances in personal data collection are a source of growing concern for privacy advocates, but whereas most fears tend to focus on what type of data is being collected, who’s watching and to whom is your data being sold, the potential for this same data to be monetized via auditing and compliance fees is even more problematic.

The fact is, you don’t need massive infrastructure to now track/tax businesses and consumers. State governments and municipalities have taken notice.

The result is a potential multi-billion dollar per-year business that, with mobile tracking technology, will only grow exponentially year over year.

Yet, while the revenue upside for companies helping smart cities (and states) with taxing and tolling is significant, it is also rife with contradictions and complications that could, ultimately, pose serious problems to those companies’ underlying business models and for the investors that bet heavily on them.

Photo courtesy of Getty Images/chombosan

The most common argument when privacy advocates bring up concerns around mobile data collection is that consumers almost always have the control to opt out. When governments utilize this data, however, that option is not always available. And the direct result is the monetization of a consumer’s privacy in the form of taxes and tolls. In an era where states like California and others are stepping up as self-proclaimed defenders of citizen privacy and consent, this puts everyone involved in an awkward position — to say the least.

The marriage of smart cities and next-gen location tracking apps is becoming more commonplace.  AI, always-on data flows, sensor networks and connected devices are all being employed by governments in the name of sustainable and equitable cities as well as new revenue.

New York, LA and Seattle are all implementing (or considering implementing) congestion pricing that would ultimately rely on harvesting personal data in some form or another. Oregon, which passed the first gas tax in 1919, began it’s OreGo Program two years ago utilizing data that measured miles driven to levy fees on drivers so as to address infrastructure issues with its roads and highways.

Image Courtesy of Shutterstock

As more state and local governments look to emulate these kinds of policies the revenue opportunity for companies and investors harvesting this data is obvious.  Populus, (and a portfolio company) a data platform that helps cities manage mobility, captures data from fleets like Uber and Lyft to help cities set policy and collect fees.

Similarly, ClearRoad  is a “road pricing transaction processor” that leverages data from vehicles to help governments determine road usage for new revenue streams.  Safegraph, on the other hand, is a company that daily collects millions of trackers from smartphones via apps, APIs and other delivery methods often leaving the business of disclosure up to third parties. Data like this has begun to make its way into smart city applications which could impact industries as varied as the real estate market to the Gig Economy.

“There are lots of companies that are using location technology, 3D scanning, sensor tracking and more.  So, there are lots of opportunities to improve the effectiveness of services and for governments to find new revenue streams,” says Paul Salama, COO of ClearRoad . “If you trust the computer to regulate, as opposed to the written code, then you can allow for a lot more dynamic types of regulation and that extends beyond vehicles to noise pollution, particulate emissions, temporary signage, etc.”

While most of these platforms and technologies endeavor to do some public good by creating the baseline for good policy and sustainable cities they also raise concerns about individual privacy and the potential for discrimination.  And there is an inherent contradiction for states ostensibly tasked with curbing the excesses of data collection then turning around and utilizing that same data to line the state’s coffers, sometimes without consent or consumer choice.

Image courtesy Bryce Durbin

“People care about their privacy and there are aspects that need to be hashed out”, says Salama. “But we’re talking about a lot of unknowns on that data governance side.  There’s definitely going to be some sort of reckoning at some point but it’s still so early on.”

As policy makers and people become more aware of mobile phone tracking and the largely unregulated data collection associated with it, the question facing companies in this space is how to extract all this societally beneficial data while balancing that against some pretty significant privacy concerns.

“There will be options,” says Salama.  “An example is Utah which, starting next year, will offer electric cars the option to pay a flat fee (for avoiding gas taxes) or pay-by-the-mile.  The pay-by-the-mile option is GPS enabled but it also has additional services, so you pay by your actual usage.”

Ultimately, for governments, regulation plus transparency seems the likeliest way forward.

Image courtesy Getty Images

In most instances, the path to the consumer or tax payer is either through their shared economy vehicle (car, scooter, bike, etc.) or though their mobile device.  While taxing fleets is indirect and provides some measure of political cover for the governments generating revenue off of them, there is no such cover for directly taxing citizens via data gathered through mobile apps.

The best case scenario to short circuit these inherent contradictions for governments is to actually offer choice in the form of their own opt-in for some value exchange or preferred billing method, such as Utah’s opt-in as an alternative way to pay for road use vs. gas tax.   It may not satisfy all privacy concerns, particularly when it is the government sifting through your data, but it at least offers a measure of choice and a tangible value.

If data collection and sharing were still mainly the purview of B2B businesses and global enterprises, perhaps the rising outcry over the methods and usage of data collection would remain relatively muted. But as data usage seeps into more aspects of everyday life and is adopted by smart cities and governments across the nation questions around privacy will invariably get more heated, particularly when citizen consumers start feeling the pinch in their wallet.

As awareness rises and inherent contradictions are laid bare, regulation will surely follow and those businesses not prepared may face fundamental threats to their business models that ultimately threaten their bottom line.

News Source = techcrunch.com

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