For OnStar and Other Connected-Car Tech, the Age of Innocence Is Over
Reports on manufacturing, labor and earnings with clear, practical context. Drives a Tesla Model 3 RWD; family hauler is a Volvo XC60.
In the mid-1990s, General Motors introduced OnStar, a revolutionary connected-car technology that promised safety and convenience. Yet, as vehicular technology has advanced, so too have concerns over privacy and data exploitation. This article explores how OnStar's journey from a benign service to a data-driven tool reflects broader trends in the automotive industry.
When General Motors launched OnStar in 1996, it marked a new era in automotive technology. Initially available as an option on select Cadillac models for $895, plus installation and a subscription fee, OnStar was designed to enhance driver safety. The system, equipped with a cellular modem and GPS, could summon help after an accident and provide turn-by-turn directions. Over time, OnStar evolved, offering remote diagnostics and other features. However, this innovation soon became a subject of debate as privacy issues emerged.
By 2002, OnStar was transitioning from an analog to a digital network, improving data transmission. Despite these advancements, early adopters faced issues as analog services were phased out in 2008. In 2011, OnStar proposed changes to its terms, including data collection and sharing clauses. Public backlash ensued, with Senator Chuck Schumer urging the FTC to investigate, prompting OnStar to retract those changes. The controversy highlighted growing concerns over data privacy and corporate transparency in connected-car technologies.
The introduction of OnStar's Smart Driver program in 2015 allowed users to receive detailed driving assessments. This data, intended for insurance discounts, soon became contentious. By 2022, the discontinuation of 2G networks left many vehicles without connectivity. In January 2025, the FTC accused GM of collecting detailed driving data without proper disclosure and selling it to third parties. A settlement included a five-year ban on sharing data with consumer reporting agencies. This case underscored the broader implications of data use in modern vehicles.
The legal battles continued as GM filed to dismiss a class-action lawsuit in April 2025. The company argued that drivers had no reasonable expectation of privacy on public roads. This defense sparked debates about privacy rights in the digital age. Currently, GM offers a basic OnStar package with new vehicles, while premium services range from $9.99 to $79.99 monthly. These developments reflect the growing complexity of balancing consumer benefits with privacy concerns in connected-car technologies.
The evolution of OnStar mirrors the broader trajectory of the automotive industry, where technological advancements often outpace regulatory frameworks. As vehicles become more connected, the potential for data collection increases, raising questions about ownership, consent, and usage. Automakers must navigate these challenges while maintaining consumer trust. The ongoing dialogue about privacy and technology in cars is a critical aspect of the industry's future, influencing how companies design and implement new features.
As the automotive industry continues to innovate, the lessons from OnStar's journey serve as a cautionary tale. The balance between technological progress and privacy rights is delicate and requires careful consideration by all stakeholders. Moving forward, transparency and consumer protection should be at the forefront of discussions about connected-car technologies. As vehicles become more integrated into our digital lives, the need for robust privacy frameworks becomes increasingly urgent.
About Priya Nair
Reports on manufacturing, labor and earnings with clear, practical context. Drives a Tesla Model 3 RWD; family hauler is a Volvo XC60.
