MetroMile Gives Away Driving Sensors for Free as It Expands Pay-Per-Mile Insurance Service

MetroMile, a company that promises to lower insurance costs for low-mileage drivers by charging by the mile, launches today in Washington state. It's also giving out 10,000 of its Metronome devices, which can be plugged into cars to monitor driving, and introducing a mobile app for people to track their own habits.

The startup was co-founded by Climate Corporation's David Friedberg and is backed with $14 million from some of the same investors, Index Ventures and NEA. Climate Corporation helps provide crop insurance by predicting weather, and was just bought by Monsanto for $930 million.

The two companies tie into the same trends of turning analog activities into digital ones via monitoring them and crunching data. (However, Friedberg continues to run Climate Corp and his co-founder Steve Pretre runs MetroMile.)

The Metronome device is quite similar to those from Automatic and Best Buy-backed Zubie, which plug into the "on-board diagnostic port." But instead of making judgments about whether people are driving well, MetroMile simply counts miles. Then the app spits out information about how expensive each trip was based on the local cost of gas.

Also, the MetroMile device includes a free wireless plan, like some of Amazon's Kindle readers. It plans to make the money back on other services, starting with insurance and, later, things like repairs. It's interesting to see some of the same technology being combined with very different business models.

MetroMile, which works with insurance partners to underwrite its plans, said its service only makes economic sense for people who drive fewer than 10,000 miles per year. Cost varies based on the person and type of car, but people generally pay between 2 cents and 6 cents per mile, and $15 to $40 as a monthly base rate. The average MetroMile customer in Portland saves $400 per year, the company said.

The insurance service is now available in Oregon and Washington, and the Metronomes will be given away in those areas and San Francisco as well, where the company is based.