Resolving the Misalignment between Consumer Privacy Concerns and Ubiquitous IS Design: The Case of Usage-based Insurance

Ubiquitous IS enables novel services and business models, yet require a careful balancing of consumer privacy concerns (PC) – induced by the provision of particular sensors and information types – with functional performance in order to maximize acceptance. For the exemplary case of Usage-based Insurance (UBI), this paper presents a design science approach to the mitigation of PC under parallel consideration of functional system performance. Based on long-term location trajectories from 1’600 vehicles, we assess the predictive power of emulated system designs that substitute location information, presumably the most privacy sensitive type of information in current UBI designs. We find that there are substantial grounds to challenge prevalent design paradigms in UBI and infer general insights from this example for IS researchers and IT professionals, who, when seeking to improve system privacy, often focus on privacy-enhancing technologies instead of considering the socio-technical context of ubiquitous IS.