The REAL Benefits of Fleet GPS
-by Kent Senior

FIVE years ago global positioning systems (GPS) were the new toys on the block. Now they’ve become critical to business success for many operators. Currently there are more than 2.5 million units in fleet service, and according to a study by C.J. Driscoll & Associates, this number is expected to expand to 5.8 million units by 2009.

Such explosive growth isn’t surprising considering that 73 percent of operators report they are either extremely satisfied or very satisfied with their systems. The fact that many fleets achieve a payback in less than one year and experience an ROI of two to ten times after implementing GPS into their vehicles doesn’t hurt, either.

Nor is the GPS of today the same GPS of 5 years ago. Now GPS is only one component of a larger technology known as “telematics.”

The term was coined by combining the words telecommunications and informatics. Telematics technology integrates wireless communications, vehicle monitoring, and vehicle diagnostic devices along with global positioning and routing capability into a unified system of fleet management. There are as many different configurations of telematics systems as there are telematics vendors, but all provide operators unprecedented control over cost, safety, and risk factors.

PASSIVE VS. ACTIVE
Telematics systems come in two flavors. “Passive” systems store information onboard the vehicle. At the end of the day or when the car returns to the garage, the driver either turns in a memory stick or else the data downloads automatically when the vehicle approaches its parking space. “Active” systems, however, are becoming the solution of choice for most fleet operators. Active systems employ a wireless network to transmit data in real-time, allowing operators to track and route their vehicles efficiently, keep an eye on the ongoing mechanical performance of their fleet, and to monitor their drivers’ performances.

LOCATION, LOCATION, LOCATION
In the limousine business, knowing the fastest route through traffic is critical if you want to keep your clients happy and stay competitive. Telematics technology, of course, takes the guesswork out of routing. Many systems provide the dispatcher with a map detailing the position, speed, heading, and status of every vehicle in the fleet. They not only calculate the quickest and fastest course to and from a pickup or destination, many interface with weather and traffic services to continuously update a vehicle’s route to avoid delays due to accidents, congestion, and poor road conditions.

Increased client satisfaction is just the first pay-off. Efficient routing reduces miles traveled, which yields direct savings in fuel consumption, not a bad thing with gas prices at record highs and rising higher. Less unnecessary miles traveled also cuts down on automotive wear and tear, reducing maintenance costs and extending the life of the vehicle. Productivity is enhanced as well, since the time savings realized by routing efficiency may allow drivers additional trips per shift.

For many companies the application of global positioning technology results in the reduction or elimination of overtime. Operators can verify arrival and departure times and locations and cross-check the data with employee timesheets, ensuring that reported hours reflect actual trips.

Being able to pinpoint exactly where your vehicles are also comes in handy in billing disputes, such as when answering claims of a late pickup or drop-off—it’s difficult arguing with satellite data. Additionally, incontrovertible trip information protects drivers wrongly accused in accidents and defends the company from fraudulent claims against its vehicles.

Some telematics systems allow operators to create virtual “geo-fences.” These are electronic boundaries defining the area in which a vehicle may travel. Typically, an alert is sent to the fleet dispatcher when a vehicle crosses a geo-fence. This is helpful in identifying unauthorized after-hour or weekend usage, in determining whether the vehicle is being used for personal errands or for moonlighting, and in locating the vehicle should it be in an accident or stolen.

VEHICLE DIAGNOSTICS AND MONITORING
According to some estimates, fleet operators could save $2,000 per vehicle each year by installing a telematics system with remote diagnostics capability. Such systems interface wirelessly with the computers onboard most modern vehicles and provide warning of mechanical or electrical difficulties. Catching problems early improves fuel economy, minimizes breakdowns and vehicle downtime, and often lowers the cost of repairs.

Engine performance isn’t the only thing that may be monitored remotely. Vendors can configure telematics systems to keep track of vehicular speed, braking history, wheel angle, seat-belt use, accelerator position, and velocity change—important data in the event of an accident, allowing risk factors to be identified and fault to be fairly assigned. Some systems capture each time a passenger door is opened, providing additional verification of pickups and drop-offs. Many systems routinely check for unnecessary idling, a major consumer—and waster—of gas. One operator created a report for each driver in the fleet so they could see idling records. It wasn’t long before idling times decreased dramatically, saving thousands of dollars in fuel and extending the functional lifetimes of the vehicles—while reducing greenhouse gas emissions. Some companies have reported reductions in fleet idling times by as much as 25 percent.

DRIVER BEHAVIOR
It seems to be human nature that people change how they act when they know they’re being observed. The simple installation of a telematics system in fleet vehicles often by itself results in an improvement in driver performance and road habits. Studies demonstrate that monitored drivers are up to 30 percent less likely to be involved in accidents than unmonitored drivers.

Speeding is the driving behavior most widely tracked by fleet operators—it wastes gas, reduces vehicle life, and increases the probability of accidents, generating workers’ compensation claims and driving up insurance rates. Most telematics systems allow managers to set customized parameters to trigger alerts when their vehicles exceed a specified mph. The identification of habitual speeders allows prudent operators to take corrective action before an accident actually happens. Interventions may include holding documented discussions with at-risk drivers about their driving history, having them attend safe- or defensive-driving courses, or the separation of repeat offenders. This saves lives and money. Many insurers offer discounts to companies that monitor and manage the on-road behavior of their drivers. As an added benefit, some fleets reported lower vehicle maintenance costs because drivers stopped racing over curbs, bumps, railroad tracks, and other hazards.

PRIVACY ISSUES
Several recent decisions make it clear that the courts consider on-the-road behavior to be a public venue and that drivers have no expectation of privacy in a vehicle. The most visible recent challenge on privacy grounds was in New York City, when the New York Taxi Workers Alliance (NYTWA) opposed Taxi and Limousine Commission (TLC) requirements that all taxis install GPS devices, claiming that the installation violated the rights of owners and operators by invading their privacy. The U.S. District Court, however, disagreed. In September 2007, Judge Richard M. Berman concluded that any invasion of privacy was outweighed by the public interest in providing safe and efficient service to passengers. The NYTWA appealed the ruling, but in March 2008 withdrew the complaint “with prejudice”—the suit cannot be brought again.

POSITIONING, NOT GLOBAL
Although owners have the right to install GPS tracking in their fleets with or without the knowledge or consent of their drivers, prudent companies will introduce the technology in such a way that employees come to view it as a personal benefit rather than as an imposition by Big Brother. Successful implementation depends on positioning telematics as a method for creating efficiencies and cost savings, of improving overall operations, not as a tool for reprimanding employees for stopping at Starbucks for a take-out coffee.

Human resources professionals recommend that operators follow a policy of aggressive communication when installing telematics in their fleets in order to fast-track a successful roll-out:

• Publicly announce the implementation. Hold individual and group meetings with drivers and supervisors to ensure everyone understands why the system is being installed, what it will do, and how it will affect them. Strengthen the message with follow-up e-mails, postings on the company website, and articles in company publications such as employee newsletters. Train all employees in how to use the system.

• Accentuate the positive. Emphasize how drivers benefit from the system, explaining how it protects them in the case of an accident or a spurious accusation of tardiness or failure to arrive, and enables them to make more money through efficient routing and dispatching.

• Be straightforward about privacy issues. Most people dislike being watched, but they hate being watched secretly. Explicitly inform drivers that their on-road behavior will be monitored and that the information will be used to evaluate driving habits and adherence to fleet standards—again, not to penalize minor infractions but to identify areas in need of improvement.

• Draft a formal policy explaining the telematics system and include it in the company employee handbook and in new-hire orientation materials. Have drivers sign and date a copy of the policy to document that they have read and understand it.

• Create a driver incentive program to reward them for adhering to or exceeding fleet goals for reducing idling time, fuel use, and unsafe road practices. Reinforce the idea that saving the fleet money means dollars to the driver through publicly sharing savings and profits generated by the new telematics system.

Even operators who have done their homework should be prepared for a certain amount of resistance and hostility from employees, particularly from those with something to hide. These, thankfully, soon depart the company to avoid discovery or after their illicit behavior comes to light. Unfortunately, a few good employees may leave as a matter of principle. The majority, however, come to accept the system once their paychecks begin to grow or when a fellow driver is successfully defended by GPS data in a billing dispute or accident investigation. Studies demonstrate that most fleets begin to enjoy the positive results of implementation within a year of roll-out.

It appears to be only a matter of time before some form of GPS technology becomes standard in all fleets. Forward-looking operators determined to remain competitive should start investigating telematics options without delay. LD