Friday, October 4, 2013

The Value Chain of Stolen Cars

On a Personal Note

What made me come up with this post is the fact that during my stay in Ramallah, two vehicles have been stolen from me -- these are the vehicles -- so in case you hear anything, please leave me a note...

Mitsubishi Pajero 2.8TD, unique feature: you honk by pushing a small green button
Suzuki DR350, unique feature: speedometer is shattered

Experiences with Palestinian and Israeli Police

When my car was stolen, Ramallah police was very friendly and welcoming, but disappointing on a professional level, to say the least. My car was stolen in front of a bank, with a security camera pointing at it. I reported the case to the police just two hours after the incident, including hinting at the existence of the security camera. Overall, I have visited the police station six times on six different days to follow up on the case. Each time I was received with very welcoming words and offered coffee and cigarettes, I was being redirected to higher ranking officials who spoke good English, just to find that there was no file on the case available, and that I had to tell my story from scratch. After telling my story for the sixth time, I gave up and went myself to the bank to find out that the police did not pass by to check the video footage.

Since I am driving Israeli number plates, and I wanted to claim my vehicle registration fees back, I also had to report to the Israeli police station responsible for Ramallah -- which is located inside the settlement of Sha'ar Binyamin (where, by the way, I was surprised to find about half of the cars parked in front of the huge Rami Levy supermarket to have Palestinian number plates). The Israeli police had much less staff to handle many more cases, still it took only 30 minutes to have my printed report done, of course without much of welcoming words, no coffee and no cigarettes offered. They assured me that if the vehicle was to cross any checkpoint, it would be stopped and confiscated -- How would that work? I could imagine they have cameras to automatically detect all number plates crossing the checkpoints and compare them with a stolen vehicle database. But do they really? I never saw cameras at checkpoints.

Bottom line is, neither of the polices were successful in retrieving either of my vehicles.

The Value Chain of Stolen Cars

Those who break into cars are usually freelancers who receive an approximate 100$ per car upon delivery in one of the hubs in Hebron, Tulkarem, Qalqilia, Nilin and other places -- typically in Palestinian villages in C-Areas of the West Bank, off-limits for the Palestinian Authority, and mostly neglected by the Israeli civil administration.

The next stage of the value chain is either
  1. Selling the car to the insurance company of the theft insurance, who returns it to the owner. The insurance company saves the cost of paying the entire price of the car.
  2. In case the car has no theft insurance, and the owner finds some informed people, he can pay a tip of a few hundred shekels to get advice where to find the car.
  3. Otherwise, the car is disassembled and sold as spare parts to workshops in West Bank and Israel. The engine and chassis have serial numbers, so they need to be changed to avoid traceability.

The first value chain seems to work efficiently through middle men who take their cut of the business.

The second value chain, which was my case (no theft insurance), I was less fortunate. Regardless of several attempts and very helpful friends, both my vehicles did not show up anywhere.

The third value chain, i.e. the spare parts market, does not work efficiently at all. When I took my car to west bank workshops for repair, they would usually install used spare parts, but often I got the wrong spare parts, or long delays, or sometimes just lack of availability of parts.

Business Case 1: Solving Market Inefficiencies for Spare Parts

Business models like ebay.com or amazon's marketplace have proven to be very efficient in matching supply and demand for new and used items from a large number of suppliers, including spare parts for cars.

The e-business takes a small fee for the transaction, and facilitates the transfer of the money and the transfer of the goods, while giving buyer and seller trust and confidence through Paypal's insurance, and customer ratings.

The business model needs to be slightly adopted to be a B2B model (instead of B2C), and you might want to facilitate confidentiality on the supplier's side, by buying the most-demanded spare parts against cash, and store them in a warehouse for shipment on demand.

Business Case 2: Retrieving Stolen Cars

For retrieving entire stolen cars, you will probably need to take further efforts for confidentiality of your users. You can receive anonymous hints on where the stolen car is parked, you sell this hint to your client, and you will pass the money in form of Bitcoins anonymously, while taking your cut of the deal.



Also, you could tap the potential of smartphones for this. Imagine you have 1000 users of your smartphone app, that are driving around with their smartphones attached to their own car's windshield, and the camera activated, the smartphone could automatically compare all numberplates of all other vehicles with a list of stolen numberplates. Once it has a match, it will take a photo, and upload the photo along with GPS location to your server. You can sell this information to the victim of the theft, and pass on a part of the revenue to the smartphone user to give him an incentive.

Owners of surveillance cameras that are attached to a PC could also benefit from this scheme if they install the PC-version of that application.

Business Case 3: Preventive Action

Many modern cars make it very hard to be stolen, as all car parts that are connected to the main data bus have to receive data from an electronic key in order to be functioning. So short-cutting the starter circuit won't help. Many Palestinian car workshops can install a number-combination lock preventing the engine from starting.

Another approach to find the perpetrator is to install a GPS tracker, that will send you the current position of your car by SMS. They are available for as little as $40 or a bit more, for instance http://www.amazon.co.uk/Tracker-Vehicle-Theft-Protection-System-Black/dp/B003XDN58K


7 comments:

  1. in south africa i had a pet snake guarding my volkswagen. it worked.

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  2. Nice to know about the retrieving of stolen cars,actually i am interested in cars so much so this type of info is very special for me.I like it and very awesome work done on the blog,its very helpful.

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  3. Mister Franz, please keep sharing your ideas and experiences. Your blog is amazing and the info is very valuable. Thanks a lot.

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