2055 Gari Tata Scandal.
Since the 40s, cars have really been driving autonomously. Autonomous driving now does not only work on motorways, but also everywhere in the cities, in all weathers, day and night. If you need a vehicle, you can call one. In the city, it takes no more than five minutes for a car to arrive at your door. It drives from the nearest location on its own, takes the passengers to their destination by itself, and then continues on to the next job.
Fewer and fewer cars are sold to private individuals. So, the total number of cars is decreasing. In the past, cars were parked most of the time in the street in front of the house. Today they are permanently in use. And in total fewer units are needed. With the decreasing demand the car industry, which has just been able to cope with the switch to electric drive, faces an even bigger problem. In the mid-40s, a wave of mergers takes place. Car manufacturers are taken over by the new brand of autonomous car rental companies.
Vehicle manufacturers who relied on car rentals in time are becoming modern mobility providers with their own hardware production. Other mobility providers are buying vehicle manufacturers to extend their value chain.
A high availability of vehicles is crucial for this new business. Mobility providers must therefore offer a large pool of cars. At the same time, they need a strong presence nationwide because even for trips between cities only the distance booked can be billed. Fierce competition then leads to a concentration of mobility providers with some of the largest company mergers of all time.
In 2050 the mobility market is dominated by only a small number of providers. One of them is Gari Tata, which emerged from the fusion of the online platform GariGari and Tata Motors. Gari Tata has 1.6 billion customers worldwide, of which 900 million are permanent subscribers. The company owns almost 100 million cars. Today customers spend only 5% of their income on mobility. Yet, the revenue of Gari Tata approaches the gross domestic product of a large EU member state.
Like all mobility companies, Gari Tata offers various plans, either with a fixed term or a monthly time of notice, with fixed range quotas or usage based. There are different categories from small cars to sports convertible. As usual in the industry, the tariff system includes bonus programs, cross-sellings, and combined tariffs including communication, infotainment and mobility services, so called CIM-flatrates. Most customers have usage-based tariffs. Billing is done automatically, based on time and kilometers via the user's mobile device, the smart button, an earring, a bracelet, e-paper, nili or glasses.
In 2052, the San Diego Megaplex Urban Professional magazine tests the performance of several mobility providers. All tested companies show deviations between the measured distance and the billed distance. The deviations range between 1% and 3%. This is not surprising, because a tolerance of 3% is permitted in most countries. Billing deviations are regularly measured and published by many public and private institutions. This correction factor is then taken into account by price comparison platforms. Only Gari Tata stands out with a discrepancy of 4%. This is surprising, because the test laboratories of the monitoring agencies would not certify the service with such a high deviation. So, Urban Professional publishes the test result of Gari Tata as a statistical outlier.
There are constantly reports on the quality, the performance and the cost of mobility providers worldwide. As early as 2053, Gari Tata's service again shows an above-average discrepancy in a comparison made by Mumumi (Mumbai Municipal Minute – news by the minute). After several press reports, the Indian Mobility Authority has TÜV Bangalore conduct intensive laboratory, road, and simulator tests. It turns out that Gari Tata's calculations on the test stand and in the simulator are correct. Only the road tests are wrong under certain conditions. After further investigations, the assumption is made that the accounting algorithm actually makes a distinction between test and real conditions.
Gari Tata seems to use different mileages depending on the setup. Real customers are charged a mileage up to 6% higher. Apparently, the billing system compares customer profiles and account names with external databases to identify test users. Even in case of freelance testers using the account of family members, no inconsistencies are noticeable. The billing software evidently goes to great lengths to distinguish real driving from test drives and to conceal the different calculations.
After a crapstorm in the media, Gari Tata explains that different mileage figures apply only to examinations, as real distances cannot be measured during laboratory tests on the test stand. The Indian traffic authority accepts the explanation and stops the investigation after a successful retest.
Consumer watchdogs however are not so easily turned away. Gari Tata's explanation has obvious gaps, as not only laboratory tests are affected. Independent testers are increasingly successful in proving the incorrect billing in a reproducible way.
In early 2054 the deviations suddenly vanish. Apparently Gari Tata has turned off the manipulation with a worldwide software update. The deviation only remains in a few isolated simulators missing the software change. Regulatory authorities in several countries become aware of the problem due to this obvious intervention. They soon start investigations. There are inquiries into the company, searches, interrogations, and seizure of evidence. The media report in detail. The number of new subscriptions collapses.
In mid-2054 Gari Tata admits to the manipulation: the software service provider of a supplier to the Malaysian private customer subsidiary of the group had developed an invoicing algorithm that optimized customer lifetime value. The selection of the software provider by this supplier was based on a cost-benefit analysis without the employees of Gari Tata having been notified of any unauthorized manipulation. Unfortunately, the objectionable software component of the subsidiary company later found its way into the operating environment of vehicles worldwide.
The elaborate measures taken to conceal their fraud by manipulated billing and a subsequent deletion of logs from software updates make the explanation implausible. The turnover falls by 10%.
In most regions, there are always several companies competing for the mobility budget of customers. The service is so much standardized that their offers differ mainly in price and service. That makes switching easy. So, customers with short contracts switch to other providers.
Consumer lawsuits and reclamations are filed against the company in over 150 countries.
Further investigations follow. It turns out that the company was involved in the manipulation at many levels. Those in charge and others who just knew about it are to be found on the GT Holding Executive Board, in product management and sales, in development and maintenance, and among suppliers and regional subsidiaries. In about 100 countries prosecutors file charges. Sales again fall by 20%.
Gari Tata makes its profits around the world keeping their earnings in countries with favorable tax conditions. The group has issued corporate bonds to distribute profits to shareholders without having to pay high income taxes on financial transfers. This practice has been going on for several years now. Bonds amounting to one year's turnover are offset by untaxed assets around the world of 120%.
In 2055, Gari Tata's has to repatriate foreign assets to make up for dwindling earnings. This is done at great loss. It is not done fast enough either. So, the holding can no longer service all its loans. The share price plummets.
Bonds become overdue and payable. A forecast shows a significant shortfall of tax-adjusted assets compared to overall liabilities. In at least 50 countries, the company is sentenced to fines. These fines amount to 80% of an annual turnover adding to the liabilities. The share price crashes when investors lose their confidence that Gari Tata will be able to pay its debts. Due to the disruptions the service quality suffers causing extraordinary contract terminations by existing customers. Totals revenues drop to 50% of pre-crisis levels.
In early 2056, the holding company declares bankruptcy. Many regional companies follow. Operations are discontinued. All customers switch. The sale of the vehicle fleet proves to be sluggish.
A few years later Gari Tata is removed from the company register.
The head of the Indian Mobility Authority is under investigation for illegally accepting benefits. 80 more employees of the agency are dismissed.
In over 50 states, more than 300 Gari Tata employees are convicted of fraud, about 150 of conspiracy, 99 of organized crime, and three in Bhutan of deliberate damage to the gross national happiness index.
In more than 70 countries around the world, connections between tax amnesties and Gari Tata lobbyists are revealed. But only two ministers have to resign.
Consumer watchdog INGOs, independent NGOs, uncover similar optimizations of other mobility providers. It looks like all major providers optimize customer lifetime values at the expense of their customers. It turns out that the other providers are just a bit more cautious than Gari Tata when manipulating measured distances. And they seem employ better algorithms to differentiate testing conditions from real customers.