Rethinking the Fleet Experience in a Software-Defined Vehicle Era with Lee Coleman

Lee Colman, Consulting Projects Director at SBD Automotive, explores how AI, over-the-air updates, and seamless HMI design are reshaping vehicle experiences. He emphasizes the missed opportunity in excluding large fleet buyers from cockpit and software design conversations. The episode discusses challenges and innovations around digital personalization, data consent, and collaboration between OEMs and fleet operators to enhance user experience and future vehicle value. Voice interfaces and predictive services emerge as key areas for growth.

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Transcript

Angela Simoes:

Welcome everyone to another episode of the Mile Marker podcast. My name is Angela Simons. I'm your host, and today's guest is Lee Coleman, consulting projects director at SBD Automotive. Lee leads SBDs Automotive consulting team and join the company in 2013. Prior to joining SBD, he held strategic product management positions at fleet management and telematics companies, connectivity, r and d roles at Nissan and product definition roles in the telecom sector. Since joining SBD Lee has applied SBDs collective experience as well as his own to numerous client projects ranging from OEM partner selection, tier one, market entry solution commercialization and program launch engagements. Welcome Lee.

Lee Colman:

Thank you, Angela. Great to be here with you.

Angela Simoes:

Thank you. And from the Ridecell side, we have Mark Thomas, EVP of Strategic Alliances and Marketing. Welcome, Mark.

Mark Thomas:

Thank you.

Angela Simoes:

So we did give a bit of your background in our intro, Lee, but why don't you give us just a little bit more context around what you're working on in your role right now and any immediate observations you're seeing as you're talking to clients.

Lee Colman:

Yeah, sure. So I guess I'm lucky enough to work or the company's lucky enough to work with a bunch of different OEMs all the way from low volume sports car makers all the way up to the largest volume manufacturers and everything in between really. So seeing a of variance and variety in projects as most of the world is, I'm sure at the moment in this sector, we're looking at a lot of AI specifically what that can do for customer experiences, how to improve the intelligence of any customer touchpoint. Examples of that would be support destination or even things like behind the scenes like cyber intrusion detection.

Angela Simoes:

Oh interesting. 

Lee Colman:

We're not as involved in the kind of factory automation side of things. Ours is more about the user experiences and the tech that supports those other hot areas for us are software-defined vehicle and over-the-air updates, almost every car program is at some point on the journey to that. And so we support with tech selection and again, user experience. And I guess another really big part for us is how to make non-intimidating hmis as I would call them. I think as the rush to provide content in the car has been on, they can feel a little intimidating. So we are providing quite a bit of support to clients to make things just a little bit more seamless for the end user.

Angela Simoes:

Got it. So with all of those things I think specifically or especially AI and software defined vehicles with over the air updates, in our pre-conversation you had mentioned that how large fleet buyers rental and leasing companies really don't ever have a say in the vehicle design, especially the digital experience. And now with AI on board and cockpits kind of really going really digital with the digital dashboard and everything being touch screen and things like that. Why do you think that disconnect still exists? I mean, yes, you can go on a website and somewhat customize your vehicle as a consumer, but if you're a fleet company and you're buying a large number of vehicles, I mean, I think you should have some input on what you need those vehicles to do. So why do you think that still exists and what do you think could happen to make OEMs a little more open to having some feedback in that regard?

Lee Colman:

Yeah, it's a really good point, and it's something that's been on my mind recently. I can't think of another industry where there's such a disconnect between the buyers at that volume. In some markets that's 30 or even 50% of the OEM stock that's going to large fleets and the product definition that goes into that product, there's an awful lot of support going on or attention going on to commercializing the data and to hooking up into ecosystems. I guess like commercial vehicles are the primary target for that. The traditional kind of sale elements have been around segments, trims, price points, and of course residual value. Those are very, very long established conversations between the OEMs and the fleet buyers. But I think when we look at product development and product design, it's not enough to focus around API integration and the data that needs to flow between the large fleet buyers and the OEMs.

There needs to be a sharper focus on what the end user of those vehicles needs as well as what the business needs. Where I do think there are good relationships emerging is in the LCV sector, like commercial vehicles where there's an established ecosystem with return on investment from after sales fleet services. Yes. Particularly things like fleet telematics, tell me where my vehicles are so that I can remotely dispatch to them and that kind of thing. Seeing that partly crossover into the passenger car space a little bit with passenger vehicle health monitoring by some of the larger fleets with a focus on uptime and managing maintenance costs, but really things like self-service rentals where users can find, unlock, start their vehicles. Those are kind of just in their infancy.

Mark Thomas:

So if the rental car companies could design the car, tell us what you think it would look like.

Lee Colman:

That's a great question. I mean, I'm trying to imagine a world where the rental company actually has a say or any of the fleet companies have a say in what kind of cockpit they want their users in. Is it to enable brand identity from the OEM? Do the lease and rental companies care about that, or is it more important to have something that's really easy to use and perhaps an environment where the fleet company themselves, whether it's rental or lease, have a little bit of real estate to themselves? What would it be like to be greeted when you enter that car with the brand that you are actually getting the car from rather than the OEM? Maybe there's a help menu in the cockpit to help me with things like just going off rental, certainly seeing what kind of credit I might be accruing, loyalty points, that kind of thing. But even things like upselling, software enabled services, wifi, streaming media, even a DAS, those could be a win-win for the fleet, the OEM and of course the end user at the moment, that's completely neglected.

Mark Thomas:

I remember learning that the rental cars typically with a passenger vehicle, the person sets the seat to their configuration and it stays there. So most of the rental cars now have manual seat adjustments because the motors just aren't designed to be adjusted by every single driver and fit every single time. So maybe potentially even beefing the car up, making it a bit more hardened for scenarios that aren't necessarily what a passenger would be doing.

Lee Colman:

Yeah, it is a great example. I think even just finding the controls can be hard and the brands aren't going to want to homogenize that unless it's safety related. The brands do of course want to differentiate, but I think there are certain things, especially in the digital part of the cockpit where the due respect ought to be given to the scale of the buying that's going on and the kind of user experiences that the lease or the rental company wants to offer to the driver.

Angela Simoes:

So this kind of goes back to the software defined vehicles and that's what makes all of this possible. What we're talking about, what could be done, how realistic do you think that is that it'll actually happen and do you see any of it happening already?

Lee Colman:

Yeah, so I think there are green shoots of that starting to happen. Like I say, behind the scenes with APIs, we are seeing collaboration and the fleets having a much larger and louder voice on access to data and configurability. I want to pull this to make my business work better. So can I configure the API to pull the parts that I'm interested in? I think having a vehicle spec though, or vehicles designed with fleets in mind with some distance away from that, I think as a user of fleet vehicles myself and supposed to be an industry expert on HMI to be able to get into any car and use it, you would hope. But I had an experience on a work trip a couple of weeks ago. I was in Italy, got a rental at the airport, and I used to be kind of looking for a segment upgrade or to go from a volume manufacturer to a premium manufacturer.

If I've got loyalty with a rental company, now I get kind of anxiety about which brand am I going to be given because what kind of learning curve am I on when I get into that vehicle, especially if I'm not familiar with the brand, am I going to be able to find my way out the car park to the hotel or wherever I'm going? I was getting sent the wrong way up one way streets by this vehicle a couple of weeks ago, so as many do I resorted to mirroring my phone and the OEMs lost me by that point, it could be a great opportunity for a brand experience as a, but that goes out the window if I'm having to resort to CarPlay or Android Auto. So I think there's a great opportunity for car companies to address that seamlessness aspect, work with occasional users or new users and reduce that learning curve. I think that is an overall trend in the industry anyway. If you

Mark Thomas:

Look at the car as another consumer electronics device in the smartphone world, there's essentially two platforms.

And so the question is, is the world willing to accept having to learn 10 different platforms because each OEM has their own approach. It certainly didn't look that way with the phone division with Microsoft and their third platform Windows phone certainly being an abject failure. So the question is why would consumers accept multiple different operating systems and experiences in the car when they rejected it in phones and even Windows and Mac is another classic example of PCs have two different interfaces and one or the other, maybe both. I just think that historical precedence says that they're chasing the wrong approach.

Lee Colman:

I think it's a really interesting point of debate. I think where the car companies have been getting that wrong in recent years is just overloading the systems and making them just too complicated For sure. Yeah, and forgetting who the target demographic is. Sometimes the fact of the matter is that at the moment, many brands are actually selling cars to older members of the buy in public and they're targeting digital natives with the services that looks great on advertising, but it doesn't work out so well. When you're trying to get up that learning curve, that's obviously going to improve over time. But I think that lesson come a little bit too late. If you look at initial quality surveys of users getting into cars, the number one complaints tend to be around usability, pairing, phones, those simple things. So I think there's been that acknowledgement in the industry that the user experience has to become more seamless. I honestly don't think we're going to go to A or B, Microsoft, apple, Android or iPhone in the car industry. There's way too much creativity. There's way too much brand history if you like. I think there are too many brands in the world and we will see consolidation, but they need to differentiate somehow. And if you look at the best copper experiences, they do have some brand DNA in them. The car companies are working really hard to underscore that and make it seamless.

Mark Thomas:

Look, again, let's go back to phones. Android, Samsung makes an Android. HTC makes it under. So there's an example where you differentiate on the form factor, you differentiate on the performance, you differentiate on some of the experiences that are inside, but you don't necessarily have to differentiate on the underlying technology platform that users are getting comfortable moving around.

Lee Colman:

And actually I think for that reason, one of the big pushes or one of the big innovations at the moment is on personalization, make the experience tuned into what I like to do. If I prefer a voice interface, give me that. If I like to have a visual interface that's projected onto the screen or gives me augmented reality, give me that, but allow me to turn it off. If that's not my preference, if I'm not interested in using certain features, then don't present them to me. So I think we're definitely going that direction. Will the, I think there's a lot more innovation and design coming out of the car makers now in this sort of battle for who's got the best seamless HMI and I don't see it becoming homogenous or a ubiquitous winner. There'll certainly be trends though, and it's going to be interesting to see what users pick. I think that's another big thing actually. Not necessarily among the fleet owners first or the fleet users first, but the constant cloud connectivity and the ability to decide what data you want to pull from the vehicle during its life gives options and opportunities to understand what are people using in the car, what do they not like? What transitions don't they like? You can even detect a customer drivers, driver's mood from their facial expression, hook that up to what the HMI is doing. And you're onto something in terms of,

Angela Simoes:

Or you can pick up if the driver is cursing at the vehicle.

Lee Colman:

Exactly.

Mark Thomas:

It's funny, but doesn't this bring up the whole concept of how do you manage consent? You've got the OEM, you have the rental car company, then you have the renter. There's a whole flow of consent that has to really managed in order to activate and take advantage of that contextual information.

Lee Colman:

Yeah, yeah, absolutely. And I think the argument is getting settled with the end user is the one who has to consent by law or just by good practice. The interesting question there becomes, well, is the relationship between the end user of the vehicle and the OEM or is that interesting part in the middle, the fleet or lease operator? And of course the answer is it's the owner of the vehicle, the lease company or the rental company has the contract with the end user. And so I think the needs, the ultimate answer has to be, well, it's the end user that must give consent. And the winners here are going to be those companies that make it as easy as possible to give consent, to alter consent and to revoke consent. And that's all got to be done in a really, really easy way. I think that the problem, the industry, not just this actually the whole all sectors face when handling data is there isn't a uniform best practice to that.

And so we are presented with these consents. It might be in a rental agreement that I sign at the airport, it might be on a lease agreement that I can just approve on my phone or it might even be via the hedge unit in the vehicle if I've got a seamless OEM function. And that's all got to be handled in a way that puts the user first. I think once we get over that there are some real opportunities for the industry that the fleet managers and owners and the OEMs, when we think about lifetime value of service and what the car makers are trying to do is commercialize services. Well, if the shop window for those services is the rental company or the lease company, work with them, don't work against them, put everything in the consumer's best interest, and there are going to be some win win-wins out there for those that really get that right and seamless.

Angela Simoes:

You mentioned the anxiety that you feel when you go to rent a car and all of us here have rented cars before, so I think we can absolutely identify, and it makes me think what could be the solution for that? I mean, let's say there is a three minute tutorial that you watch when you get in the vehicle and it shows you here's how you turn on the air and here's where the windshield wipers are and here's where just basic operations of the vehicle. Here's cruise control. And at some point AI could be applied in forecast. It's going to be rainy for the next three days, so make sure you know how to turn the windshield wipers on and off, that kind of thing. And perhaps baked into that tutorial could be the consent portion, right? Where this vehicle has these services, do you agree to have them on while you're driving the vehicle? And yes, no, yes, no, yes, yes, whatever. Again, that could take maybe five minutes and is the person willing to sit there and do that or are they in a hurry and they just bypass the tutorial and they get going? So that could be an issue too, but that could be one solution. I don't know of anyone that's doing that right now, but

It's something to consider

Mark Thomas:

The new interface voice and ai. And so just not having to look at the screen while you're driving and try to figure out which is the intermittent wipers, being able to have LLM that's optimized for that vehicle that says turn on wipers, obviously that would be great. AI says the wipers go on when it starts raining anyhow, so maybe that's a bad example and the lights go on when it's dark, but having that voice interface may actually cut the Gordian knot.

Angela Simoes:

No, I think that's a great point. Or even being able to connect, let's say you did want to connect your phones for whatever reason, and changing the car that I drive, it's a pain to switch between my phone and my husband's phone. You got to dig deep into the settings and then switch, right? And that's not even tied to the user. So you can change the user very easily, but the connection of the phone is deep in there and it should be tied together. So those are the kinds of things that still have to be solved too. And I don't know if that's, is that the OEM specific thing? What software system did they bring in and is it two separate softwares? Says I have no idea. But yes, that whole experience has a long way to go for sure.

Lee Colman:

I think the technology's there to make a really good job of that. If you look in the China market where we do a lot of our research, facial recognition is really well accepted there because of the security and the personalization of services. But some in the west find that quite intrusive. I don't want to be recognized, I don't want to be targeted by ads or whoever it might be. But if you think about the user experiences that enables, I get into the car, it recognizes my face, whatever brand it is, I bring my digital footprint with me and it knows my preferences. It's like a minority report in your car.

Angela Simoes:

I certainly understand that for passenger vehicles, individual use, but I mean for a fleet vehicle, we've talked a lot about safety and in cabin monitoring on the show. And

As a driver of a company vehicle, I'm thinking more like a FedEx driver or somebody that's driving a branded vehicle, not necessarily the pharmaceutical rep that is given a car by the company and it's essentially their personal car, but a delivery vehicle or a technician vehicle or something like that where there's been more acceptance, I guess, of knowing that you're being monitored because it's part of your job is to drive safely and not be distracted. And so with fleet vehicles specifically, the facial recognition might not be such a big deal. I don't know. I dunno anyone's doing it, so I dunno if it has been a big deal or not, but I think some companies have found a way to make it a little more comfortable and acceptable. I dunno if you've had those conversations with folks.

Lee Colman:

This is exactly the kind of thing that hops over sectors. If you are used to identifying yourself on the phone to your bank with your voice, print, hello, this is my voice, is my password, that's a trusted entity. And you start to feel like you can trust that as a way of identifying yourself. Imagine getting into a vehicle that was operated by a bank, someone that you trust, you might feel confident doing that. So I think this is the kind of technology biometrics, facial recognition that can hop over industry segments or industry sectors possibly from something with high trusts like banking into automotive and lease and rental. That might be long term. I think in the short term, it's those traditional interfaces, but maybe having familiar branding, okay, I'm renting this car or leasing this car. I remember signing the agreement with these guys, this brand. I'd like to see a bit of that in the car, please. Where do I go if I need help? Where do I go if I want to buy something extra where that this car has wifi in it, my friend told me How do I get that going? I'm prepared to pay a monthly for that if it's on lease, just make those things more seamless.

Lee Colman:

That’s what I'm talking about with the consumer gets what they want. The OEM maybe gets a slice of that, but the lease company or the rental company gets an upsell as well.

Angela Simoes:

I am just thinking about the last time I rented a vehicle with my family and you're in a town you don't know so well and your kid says, I'm hungry. And you think, okay, well, I don't know where the nearest five guys burgers and fries is, right? So to your point, a service in a rental vehicle where you could look up a place, maybe voice activated to your point mark, right? Voice activated, Hey, car, look up the nearest burger joint and order a cheeseburger and fries. And not only does it order it for you, but it pays for it for you. And then when you're done with the rental, it's almost like a hotel. You get the itemization because you've added things to your room as you've stayed there, whether it's at the bar or the concession store or things like that. That could be something too. Whereas as part of the rental structure or platform, you can start adding all these services and at the end you get your bill. That would certainly make things more convenient.

Mark Thomas:

So the question is, do people want to replicate the things that they can already do on their phone? So I know buying a wifi plan in a car, well, I have a wifi plan on my phone. It's like, oh, hey, get a Netflix subscription for your car screen. It's like, I have one, it's in my phone. And so in every consumer electronics revolution, the solutions that succeed in the next screen are things that are differentiated from the things that you can do in the previous screen. So MapQuest was how we all got around with our pc, and then Google Maps had the brilliant notion of having GPS in the blue dot, and it was way more useful. Instagram took over MySpace because the cameras are on our phones and they weren't really easily connected to the PCs. So the question then becomes, what is the thing that the car knows about, that your phone doesn't know about, and those become the services that are most likely to be monetized.

Lee Colman:

Yeah, you're right. It's that confluence of what is mission critical in the vehicle is getting from A to BI need support at my destination. Well, who knows where I'm going? The vehicle should, because it's guiding you there, knows how far away you are. If you're in an ev, do you need support for charging? And what's the optimal way to do that? So that merging of what does the vehicle know about you and your plans, how is your digital life preferences? Do I want five guys or a McDonald's or

Angela Simoes:

Right

Lee Colman:

Or something and that knowledge, can it make more intuitive and seamless experiences for me, predict my needs before I've even used the voice interface. Ideally,

Angela Simoes:

I think for me too, as I think about it, it would be what services are better? So for example, the wifi in my husband's truck is way better than my hotspot ever has been. So would totally use that wifi over the wifi on your phone. The other thing that's kind of annoying is when you do connect to CarPlay, literally all your apps on your phone are now connected to the car. I don't necessarily need all of my apps on the phone. I just need a few key things. And so maybe, yes, I don't need another Netflix subscription or another podcast subscription, but if I can log into my account in the vehicle and it stays logged in, because I sure as heck don't want to log in every single time I get in that car. But if it can stay logged in, it's part of my profile as that vehicle's driver, then yeah, I, and if it was a better interface, and I would probably be okay with not having to connect my phone if the things that I needed when I was driving were there. And I guess you'd have to think about that, but that's what focus groups are for and research, right? R and d.

Lee Colman:

Yeah. I think the ramp up that we've got that's happening really quick is integration of large language models and being able to just talk to your car and get more intelligence out of it. You decide what you want it to be hooked up to in the rest of your life. That might be your TripAdvisor preferences, your payments, your music, whatever. But if there's something going on, like you were saying, mark, that's, I can't do all of this easily on my phone, especially while I'm driving. But if I just want to use different agents and back to them and get proper intelligence, so reserve me a parking spot and guide me to a restaurant, make that come on my phone while I'm on my way to my destination, that starts to make sense to use it. And the ability to update vehicles over the air with the latest models is really where the race is on. But it's got to be done in association with the rest of the experience in the vehicle. Really.

Mark Thomas:

You mean turning the jog dial to spell out the address and seeing the letters vanish? My gosh. Yeah. You've got to miss that. It feels like cracking a safe sometimes, doesn't it? You have to bring up a good point that potentially if I can just say, Hey, Audi, navigate me to Safeway on the marina then, and it puts it up, then it's going to be judged on the quality of the routing. Is it Apple maps quality? Is it WA quality? But certainly I'll use it. The discoverability becomes much, much easier and much greater. So that may end up switching around because you don't have to learn a new interface. You just use your voice.

Angela Simoes:

That's a great.

Lee Colman:

Point. I'm getting used to barking instructions to the smart home devices in my house while I'm doing the cooking or whatever. I think that's going to become second nature because of that. And I guess that's another illustration of a sort of segment hop over, like we were talking about biometrics earlier. If we get used to things in our homes, in other aspects of our lives, that can be helpful when we think in vehicle experiences.

Angela Simoes:

Well, it's certainly an area that has a lot of room for growth. It's exciting, especially given AI development. So let's wrap it up with, do you have any thoughts, Lee, on, given how this potential, where do you think we'll be on this journey by the end of the year?

Lee Colman:

So by the end of the year, that's not a very long way away.

Angela Simoes:

I know, right? We're already three months in, four months in,

Lee Colman:

Yeah, three months. I think we're going to see more things like collaborations between, if I can mention it, BMW and sixth where both brands are trying to help each other. I see that as being quite a collaborative thing where I can open A BMW app and rent a sixth car. That's the spec that I want. Both companies get something out of that. I think what's going to be absolutely fascinating is the way that many of those fleets run their business is on managing residuals. So predicting that devaluation of the vehicle and renting or leasing it to overcompensate for that so they dispose of the asset and still make a profit. If we think about the software defined vehicle, a ton of the value is going to be in software defined services, not necessarily the revenues that come from them, but what is enabled on the vehicle.

Could there be deals with fleet, large fleet buyers, but the OEM that say, right, I want this vehicle to be worth a decent amount when I dispose of it, so give me the magic updates and help my business. What does that do to the secondhand market? We've seen flooding of EVs as lease companies dispose of those. So there's some really interesting dynamics coming, but the winners are going to be those that get in front of that, map it out, model it, and really make sure that all parties are winning, not least the consumer pass on savings to them pass on good deals. But as we said at the beginning, this huge community of buyers need to be much more in the thoughts of the OEMs as they plan product and plan profitability from over-the-air services and SDV.

Angela Simoes:

Agreed. Well, thank you so much for your time today, Lee. This is a great conversation. I hope our listeners enjoyed it as well. And until next time, thanks so much for your time.

Lee Colman:

Thank you. Great to see you.