GM's On-Star planned on tracking and storing information on everyone connected to the system, even if they had dropped the service. When news got out there was wide-spread outrage. Sen. Charles Schumer, D-N.Y., described as "one of the most brazen invasions of privacy in recent memory."
Would he feel better if the government was doing the tracking instead of a private (sort of) company? With the growth of hybrids and electric cars, there have been proposals to switch highway funding from a gas tax to a tax based on miles traveled. But this cannot be done by simply checking the odometer like a water meter. It matters where you drove. If you are being taxed for driving on federally-funded roads then the government has to prove that you were actually on those roads instead of state roads.
There are also state gas taxes. Since these are collected at the pump, there is a good chance that the roads you used were in the same state as the pump. If you drive a long distance then you will probably buy gas in other states. There is no way to get that from odometer readings.
The proposed solution has been to monitor where you actually drive using GPS. Some pilot programs already exist for this. But these programs are tracking the same data that On-Star tracks. Even if they are not saving the same level of detail, that could easily be changed.
So why is it creepy for a private company to track your every movement but ok for the government?