In May of this year, Google was granted a U.S. patent for how wearable devices can detect if the wearer is driving or simply a vehicle passenger. Android Police spotted the official patent documents, which include the algorithm Google would use.
Being a patent, the wording is broad and applies to wearable devices in general. With Google Glass now refocused on vertical markets, it's more likely that Android Wear watches would be the first devices that could benefit from the patent.
By knowing if an Android Wear smartwatch or other wearable device is being used by a driver, Google could limit the amount of touchscreen interaction for safety reasons. In that case, perhaps the only way to use the watch would be through voice commands and audio feedback.
Since a vehicle's passenger isn't required to keep their eyes on the road, there's no need to provide the same limitations to them. In fact, it would be downright annoying for the smartwatch to detect travel movement and reduce functionality for someone who's along for the ride.
The technology that Google outlined in the patent, of course, isn't quite new but it would be an improvement.
There have long been mobile apps that detect when you're in a moving vehicle and reduce on-screen functions or read incoming messages aloud. The problem is that it's more difficult to tell if the smartphone is being used by a driver or a passenger; it's easier with a wearable device since the driver's movement can be seen as they steer or shift the car.