The Business of Hacking

Written by Will Overstreet, VP of Strategic Partnerships

How and why should a traffic company get involved in cyber security? At GRIDSMART, we pride ourselves on being entrepreneurs and outsiders within the traffic industry. We always think several moves ahead, a strategy that hockey legend Wayne Gretzky described best. He said, “I skate to where the puck is going to be, not where it has been.” For the transportation industry and local municipalities, that puck is cyber-crime, and they need to be skating to build out their cyber defense today.

At GRIDSMART, as we work hard to develop new products to defeat cyber criminals, I’m struck by the fact that hackers are driven by the same principles and market forces as any successful business: low risk and high return. Any industry or investment that is low risk and has the potential for generating high returns will have rapid growth and increase in the number of entrants into the market.  Right now, the hacking industry meets these conditions.  An organized crime syndicate in a former communist country or an ISIS terrorist cell can set up offices with internet access and hire few individuals with basic computer knowledge to steal social security numbers, credit cards, or hold hostage a city’s IT systems for ransom with very little to no risk of ever being prosecuted.

If we compare hacking to other illegal activities where the risk of being arrested, having product stopped by customs agents, and the potential for meeting a violent and early demise is much more likely, hacking is a pretty palatable option.  It is no wonder that there are now approximately 4,000 ransomware attacks per day, with the average ransom increasing from $300 to $1,000 in the last two years.

A Different Kind of Brand Reputation

As more entities have entered the industry, brand reputation has become increasingly more important.  For instance, on the dark web there is a rating site that allows individuals to rate their experience on whether the hacker met their obligations once the ransom demands were paid.  Talk about honor among thieves.

Value Based Pricing

Hackers have become more sophisticated in their pricing by using an estimated cost of what the victim would pay out in damages and recovering the data on their own.  The hacker then sets the ransom demand at a price that is lower and likely more attractive than any other alternative. However, value- based pricing does not mean cheap.  Uber found this out when they paid a hacker $100,000 to delete the files he had stolen rather than announce that they had been hacked.

Creative Marketers

Hackers are by nature entrepreneurial and are always looking for new ways to grow their business.   Recently, a group of hackers tried a new way to increase their market share by simply changing the terms of their ransom demand.  The initial victim, in lieu of having to pay money, could email the virus to two of their friends.  Hopefully, that friend doesn’t make your next year’s Christmas card list.

Why Traffic and Smart Cities are attractive as lucrative targets.   

  1. The industry has Access to Capital. A city’s budget is larger than most businesses and the amount a city spends relative to the cyber threat is a fraction of what businesses with similar size budgets spend.
  1. Traffic Cabinets are Connected. As traffic cabinets go online, they become higher value targets because of the increased potential to break in to a city’s network, access individual citizen personal data, driver licenses, tax payments, property records, social security numbers etc., or infect other utility systems and services.
  1. Traffic Hacks are Impactful. How much could a hacker reasonably charge a city if the signals at all the major intersections were in flash for a week?  What would the total cost be to the city and local economy?  How many car wrecks might there be and how many people would be hurt?  Who would answer the questions from the press and respond to complaints and phone calls from citizens?
  1. Connected Vehicles Increase the Potential. If hackers penetrate the traffic department or a traffic cabinet, could they then infect any vehicle passing through the intersection?

After adding up the reasons why a traffic department and cities are attractive targets, it doesn’t take a Nostradamus to predict that hackers represent one of the biggest threats they will face. Several incidents have already occurred, yet the threat is still being largely ignored or downplayed.  The danger is that by the time local governments realize where the puck is going to be, the damage will be done. That is why GRIDSMART is so committed to staying ahead of the bad guys. We are reexamining virtually everything we do from developing software, to updating our products and developing new products and services, all in an effort to reduce the risk for our company and our customers.

We encourage all of our partners to do the same because if traffic departments and cities do not invest in cyber security, they’ll have a big target on their backs and pretty soon, they’ll need to consider a new strategy, deciding how much money to put aside to pay for ransom demands and legal fees.

Upcoming Cyber Security Webinar – Is the Threat Real?

Join us for GRIDSMART Webinar Wednesday on March 7th at 1:30 pm EST. We’ll discuss strategies and techniques to keep your networks secure, close vulnerabilities, and lower your risk of being victimized by hackers.


POLICYSMART #10 Elaina Farnsworth on Intelligent Transportation Training

You have heard from Elaina Farnsworth, CEO of Mobile Comply, before on this POLICYSMART podcast, but in this episode she talks about the need for certification for intelligent transportation training and what that means for the next generation workforce. This is a follow up to the discussion we previously had with Elaina on issues around the workforce for the future.

Managing Technology Fears in the New Year

Fear is an expected part of life. It’s a key element of the human condition – fear of change, fear of the future and fear that others may discover our weaknesses. As transportation technology evolves at lightning pace, people, companies and the DOTs involved in the industry will experience fear as a result, often before considering the opportunity transformative technology brings.

Instead of living in fear, technology provides a chance for us all to make different decisions and create change rather than watching from the sidelines. For you and your business, there’s no longer an option to play it safe. You’re either in the game or you’re out.

In 2018, it’s time to ask yourself, how will you manage your fear?

At INTERSECT17 this past November, attendees heard from a father who not only lived through his greatest fear, but made a decision to turn tragedy into a force for good; a decision with the potential to save lives and forever change the world.

On Father’s Day weekend in 2016, Theodore “Teddy” Vagias, a successful businessman and CEO of the Mason Harriman Group, unintentionally became an advocate for autonomous and connected vehicles. That was when his 19-year old son Leo and Leo’s best friend, Sam, were killed in a car crash.

On Father’s Day both boys had worked all day at Leo’s grandparent’s diner. They used the proceeds from work to buy their fathers gifts. That night they went out to the basketball playoffs with college friends, but knew they had to be up early in the morning for their shift at the diner. Leo and Sam were planning to stay at Teddy’s house that evening and sometime after midnight the boys called and said they were only 15 minutes away. On that dark highway, they veered off the road into a wooded area and in the moment their lives ended, Teddy’s was changed forever.

Leo and Sam had been best friends since elementary school and were exceptional athletes. Leo was a freshman kicker on the University of Rhode Island’s football team and Sam was a wrestler at Rutgers, and they were training all summer for big seasons. Both boys were working together at the diner during the week and at Leo’s mom’s restaurant on the weekend. They were about to head back to school for their sophomore year when they died. No drugs or alcohol were involved in the crash. These were just good kids whose lives were lost in an instant.

On that day, Teddy’s worst fear became his new reality and in that reality, he made a choice. Rather than sitting on the sidelines and accepting what had happened, he decided to fight and influence governments, innovators and the entire intelligent transportation industry to move faster toward autonomous and connected vehicles, with a goal of zero fatalities on our nation’s roadways.

During his presentation at INTERSECT17 in Knoxville, he acknowledged that many industry people were already aligned with his mission. At the same time, he outed other groups invested in slowing the pace of innovation, either for the sake of old processes or their ongoing profit from the crash economy.

He asked the crowd to envision a clock much like the U.S. National Debt Clock, except this one counts the number of deaths on America’s roadways each year. As the clock ticks upward with the 100-people lost to crashes every single day, he suggested that audience members remember that each number has a face, is a mom or dad, a son or daughter and ultimately a heart that touches other hearts. He said, “Ask yourself a question. Who could you afford to lose?” letting the concept hang in the air and settle in to the minds of the attendees. “If you can’t, and you don’t want to, what would you do differently?” Vagias implored the group of transportation leaders to act saying, “In your mind, in your body, in your spirit, you have the innovation, the determination, the hard work, the free will, the love of man, to stop the clock and make the horrible dream go away.”

Too often, autonomous and connected vehicles are viewed from a business and process perspective without considering the true human cost of delaying these innovative technologies. Vagias asked the audience to lead in pushing a sense of urgency within the industry, because fear of the future cannot be the excuse that stands in the way of making sure everyone goes home at night.

“What I’m living through, I don’t ever want you to live through it,” he said. “But you have the power to make a difference, and I really hope you do.”

It’s time for us all to face our fears, whatever they may be, and make a difference for Teddy and every family that has lived through tragedy so that it never happens again. Autonomous vehicles are the end goal, but to get there we must each make steps toward a connected future and a vision of zero fatalities. Reach out to your congressman and demand improved infrastructure to implement vehicles of the future, or click here and go to the Federal Highway Administration’s page on Zero Deaths and pledge yourself or your company to one of these movements. Every second counts, and the clock’s still running.