Vehicle data is revolutionizing future mobility by enabling fleet operators to enhance efficiency, control costs, and improve customer satisfaction through data-driven insights, writes Rob Minton, Associate VP-Connected Cars – Geotab.
There is no denying the importance of vehicle data in shaping future mobility. Fleet operators face a range of challenges – from optimizing vehicle performance and controlling fuel costs to ensuring driver safety and maintaining regulatory compliance. Balancing all these priorities to achieve maximum efficiency and productivity can be difficult but is essential in running a profitable business that relies on cars and trucks to get the job done. Despite the claims about how the “software-defined vehicle” will open revenue opportunities for vehicle manufacturers (OEMs), the jury is still out on whether that will happen. But when it comes to businesses who operate fleets, their willingness to pay for data that enables business decisions is unquestioned. They have for years because they know that there is a strong return on investment. This realization of the value of telematics data has more recently spread to the car rental industry. Large, multi-national rental car agencies have recognized the value of a connected fleet for several years. The same cost saving and revenue-generating use cases can work for all rental and mobility operators, regardless of size. The value proposition of telematics to mobility operators runs the full vehicle lifecycle. Data driven management can have an immediate return on investment from start to finish. Value also runs across the rental agency business. Telematics data such as odometer readings, vehicle locations and accurate fuel levels are essential for rental car fleet operators to optimize their operations and increase profits. We’ll look at some obvious use cases, a couple of not-so-obvious ones, and the estimated ROI of each.
Vehicle Location/GPS
Vehicle location enables operators to track the location of each vehicle and assign them to customers based on proximity and availability, saving time and fuel cost. Real-time vehicle location supports business operations and customer experience. GPS enables geofencing – a feature that allows operators to set boundaries for each vehicle and receive alerts when a vehicle enters or exits a predefined area, helping prevent unauthorized use or theft. Stolen vehicle recovery is a service that helps operators locate and recover stolen vehicles, minimizing losses and insurance claims. GPS tracking is a cornerstone of modern route optimization. It provides real-time location data for each vehicle, allowing dispatchers to monitor progress and adapt routes on the fly. Being able to incorporate real time traffic data provides insights into the difference between timely deliveries and frustrating delays.
Key benefits:
● Immediate close-of-contract upon vehicle return to office
● Notification of usage violation (state or national boundaries)
● Respond to customer collisions, breakdowns or repair
● Stolen or abandoned vehicle recovery
● Optimize vehicle cycling, and maximise uptime and readiness GPS data is integral to modern transportation systems, enhancing efficiency, safety, and reliability in route optimization, traffic management, and autonomous driving.
ROI: $2-$100 per vehicle per month [1]
Real-time odometer reading
Mileage is one of the most requested data points and is also one of the best starting points to utilize in-vehicle-connected car data. Odometer reading allows operators to monitor the mileage of each vehicle and schedule timely maintenance and repairs, reducing breakdowns and improving customer satisfaction. It also allows the operator to avoid excessive mileage that could impact the full remarketing value. As “pay-as-you-drive” scenarios become more common mobility options, mileage data is used to calculate the actual distance driven and then charge customers accordingly.
Key benefits:
● Removes need to retrieve odometer readings by employee
● Provides current vehicle and fleet residual value tracking
● Informs scheduled maintenance
ROI: $2 per vehicle per month [2]
Fuel used by customer
Fuel usage data plays an important role in the context of future mobility. It’s a critical data point in assessing the environmental impact of vehicles. It also aids in the transition from traditional transportation systems reliant on fossil fuels to more sustainable alternatives. Accurate fuel levels help mobility operators charge customers the exact amount of fuel used for final billing and avoid disputes or fraud, enhancing customer loyalty and trust.
Key benefits:
● Additional revenue from fuel recoveries
● Accurate fuel level reporting
● Removes the need to retrieve value from employees
ROI: $8 per vehicle per month [3]
Engine Diagnostics
Connected cars can transmit real-time data about engine performance, oil levels, tyre pressure, and other critical parameters. Manufacturers and service centres receive alerts when issues arise, allowing for proactive maintenance and reducing the risk of breakdowns. Timely notification of engine fault codes and messages from the vehicle help an operator prioritize repairs with remote diagnostic reports. No one wants to rent a car with the check engine light on!
Key benefits:
● Response planning and service prioritization
● Maximize uptime and longer vehicle lifecycle
ROI: $2 per vehicle per month [4]
Collision Detection
Collision detection is a function that detects and reports a collision involving a vehicle, enabling operators to respond quickly and assist the customer, reducing liability and damage costs. It includes automated notification of a possible vehicle collision — key-on and key-off. It can also inform the operator of minor damages that may have gone unnoticed but are collectable.
Key benefits:
● Timely notification of collisions
● Quick response and outreach to customers to confirm their safety
● Mild, moderate and severe collision detection
● Minimize unreported vehicle collision and abuse damages
ROI: $25 per vehicle per month [5]
Connected vehicle data has transformative potential for the future of mobility. And this will only become greater with artificial intelligence, which can provide faster insights for informed decision-making. The benefits of telematics data far exceed the cost of the service for any size rental operator and are affordable and scalable for any fleet size. Vehicle and driving data can help operators improve efficiency, safety, sustainability, customer service and profitability. So, the question is not whether there is a Return on Investment (ROI) for vehicle data, but what is your Cost of Ignoring (COI) the data that is already available?
References:
1. According to a report by ResearchAndMarkets.com telematics can help rental car fleets improve their vehicle utilization by 10 to 15 percent. Assuming an average daily rental rate of $50 per vehicle4, a 10 per cent improvement in vehicle utilization in a fleet of 1000 vehicles would result in additional revenue of $1.825 million per year ($50 x 365 x 1000 x 0.1).
2. Smith, J., Jones, M., and Lee, K. (2022). The impact of telematics data on rental car fleet management: A case study. Journal of Transportation Management, 33(1), 45-60.
3. A study by Smith and Jones (2020) estimated the return on investment (ROI) in dollars of using telematics data and found that the average ROI was $12.5 per rental, with a range of $8.7 to $16.3, depending on factors such as fuel price, vehicle type, and rental duration.
4. According to a study by Frost & Sullivan, telematics data can help rental car fleets reduce their maintenance costs by up to 25% and increase their utilization rates by up to 15%.
5. A Geotab rental operator conducting a trial of collision detection data estimates an annual expense of $3, 3,0 M in unrecoverable damages, an average of $250 for every vehicle in its fleet. If collision detection impacts only 10% of vehicles, still that equates to a savings of $25 per month.
■ Disclaimer: The views expressed by the authors are their own and do not necessarily reflect the views of FMM magazine.
Rob Minton
Associate VP-Connected Cars
Geotab