Can Telematics Technology Help Improve Driving Behavior?

Serguei Netessine, Operations, Information and Decisions, The Wharton School; Vivek Choudhary, INSEAD; and Masha Shunko, Foster School of Business

Abstract: Technological innovation is changing the landscape of many industries, and automotive telematics devices are perhaps the most disruptive technology for the auto insurance industry and most automotive manufacturers have plans to develop telematics. Moreover, a number of startup companies use telematics devices in various applications. Despite the massive growth in this area (nearly 140 million users by 2023), however, little is known about implications of this technology for drivers and for the society in general. Ideally, we would expect that telematics devices would give users feedback on their driving habits and incentives (through insurance discounts) for safer driving: a key goal of telematics devices is to give users feedback on their driving in order to decrease incidents of speeding, accelerating, harsh breaking etc. and, ultimately, to reduce the number of accidents. We want to study the effect of two types of feedback (self-reference and social-reference), which have been shown to be effective in other settings. In addition to that, we will study effect of Nudges on drivers to improve feedback-seeking behavior. Nudges have been found to be very effective as a costless intervention. We will conduct these experiments with approximately 500 actual drivers.

Michelle Eckert is Marketing and Communications Coordinator for the Mack Institute, where she works to engage students, researchers, and corporate partners in opportunities for collaboration. Michelle received her B.A. in Art from Valparaiso University in 2007. Her background includes two AmeriCorps terms of service working to teach mathematics, computer literacy, and job readiness skills to out-of-school youth in Philadelphia, focusing particularly on promoting access to post-secondary education.