Startup sells insurance based on how much you drive


"Our goal is to make every car a connected smart car," MetroMile CEO Steve Pretre said.

And it starts with a little black box that you plug it into the diagnostic port under your car's dashboard and connect to it with an app on your smartphone.

"And it's actually reading data on a second-by-second basis from the device itself," said Pretre.

Listing off every trip you take, it can tell you down to the penny how much each one costs you in gas. It watches your commute and gives you insights.

"So I know, oh if I actually left 15 minutes earlier, it's gonna save me 10 minutes a day and 50 cents a day in gas," Pretre said.

And if you forgot where you parked or your car was towed.

"The device itself has a GPS unit in it, and its own cellular modem, so it can show you that postiion of your car at any point in time," he said.

The company is MetroMile and the device is called a MetroNome.

Bloom: "How much does this thing cost?"
Pretre: "So the device itself is free."

MetroMile can make the device free because they're paying for it by selling something else -- car insurance that's priced not by the month or by the year, but by the mile

"By charging people on a per mile basis, if you for example, are taking BART or Caltrain to get to work during the week, only using the car on the weekends, we can save people 40 to 50 percent. It can add up to as much as $400 to $500 a year.

MetroMile's CEO says it's tailor made for people in cities, who drive less than 10,000 miles a year.

Depending on your driving record, you might pay 20 or 30 bucks a month, plus two to four cents per mile.

The MetroNome tracks how much you drive but not how you drive, setting it apart from devices like "Snapshot" from Progressive.

As per the company's commercial, with Snapshot you "just plug it in and it keeps track of your good driving habits, like how hard you brake, when you're on the road."

That sort of tracking is illegal in California, and so is Snapshot.

But pricing by mileage is legal; though MetroMile still needs state approval before it can start selling insurance here.

In the meantime, it's giving away those MetroNomes no strings attached.

The device will continue to be for free, and if we can save people money with the insurance or other services we develop, that's great," Pretre said.

MetroMile is already selling insurance in Oregon and Washington.

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