A guide to vehicle tracking
As costs continue to fall on GPS vehicle tracking systems, business owners are reaping the benefits. The cost of vehicle tracking equipment has dropped considerably over the last five years and the return on your GPS investment can be as low as a few months.
This technology can be of considerable benefit to your business offering you increased productivity and reduced costs but you need to ensure you make an informed decision before entering into any long-term contracts.
Track-IT have put together this guide to simplify and explain what technology is available to businesses at present. We will also point out the factors that need to influence your decision and the questions you need to ask before committing to a lease agreement or purchase of tracking equipment. Following this guide will maximise the benefits to your business and minimise the risk.
Vehicle tracking is a technology that allows you to see your vehicles locations on a computer screen along with information on where they have been, what time they were turned ON/OFF, how fast they are going and a host of other features. This is made available by using a combination of GPS (Global Positioning System) technology, the mobile phone network, the internet, digital mapping and specialised tracking software.
The US Government is kind enough to allow us to use their GPS satellites that orbit the Earth. Each of these satellites is transmitting information to Earth which we can pick up with a GPS receiver (see diagram). With information from at least three satellites in the sky the GPS receiver can calculate its position on the surface of the earth to 5 – 20 feet. The receiver needs a direct line of sight with the satellite which is why GPS typically doesn’t work indoors and accuracy suffers slightly in built up areas where tall buildings along narrow streets impair the receivers’ view of the sky.
Once the receiver has calculated its position in latitude and longitude this information is stored in the tracking system located within the vehicle. The tracking system is also recording other information such as when the ignition is turned ON/OFF and in some cases when other events take place such as PTO ON/OFF. Every few minutes the tracking system sends the location and event information back to a remote server at a secure location using the mobile phone network. Your computers then access this information via the internet and it is overlaid on a digital map of the area allowing you to see where the vehicle is now at street level accuracy. Contradictory to popular expectation you do not see a flashing red dot moving along the street like in the movies.
Before the mobile phone network was well established the only way to get real-time information back to the remote server was to send it via the satellites, which was the equivalent to have a tracking system and satellite phone in each vehicle which made the technology very expensive. Now, with mobile phone towers so prolific, it is far more cost effective to get the information from the vehicle to your computer, which is why there has been a large price drop in recent years and a corresponding surge in demand. The GPS industry has built up to meet the demand as business owners nationwide began to realise the benefits of making their fleets more efficient and more productive.
Dispatch and allocate new jobs to the nearest vehicles – if your business involves dealing with jobs that come in during the day, such as a courier who needs to pick up a parcel of a plumber that has to deal with a leak, knowing where the nearest vehicle is can save fuel and time. With the price of fuel as high as it is, saving one litre is likely to pay for the tracking system for the day and saving time allows for either an increase in productivity or a reduction in wages.
Provide transparency to your team's whereabouts – time theft is one of the greatest costs to British industry. Knowing where your mobile workforce is, what time they start and finish work and managing their breaks on the road can have a significant impact on your bottom line. While paying the same wages many companies see a significant increase in productivity that often coincides with the installation of the tracking system.
Improved health and safety – knowing the location of a workers vehicle can be of significant benefit if that person were to require immediate attention. Panic buttons can be fitted to vehicles that when pressed alert the office or a designated mobile phone of the emergency and the exact location of the vehicle.Good workers can be rewarded - People that work hard don't like the idea of a slack colleague earning just as much as them while putting in less time and effort. It discourages your good workers from working hard. With evidence you can reward the people that are working harder and are more likely to keep them motivated.
Control and reduce your overtime costs – one of the greatest returns you may get on your vehicle tracking investment would be a reduction in overtime. Many companies see a significant drop in overtime claims by employees after the installation of the tracking system, often with a corresponding increase in productivity.
Confirm ETA's and offer enhanced customer service – a lot of the incoming and outgoing phone calls in an office are between you, your customer and your driver/worker trying to establish when they will arrive on-site. With the vehicle location at your finger tips you can answer the customers query within seconds, providing a superior customer service and saving yourself time and money on calls to your driver and then back to the customer.
Increase your teams efficiency – having visibility of your workforce allows you to allocate jobs more efficiently, minimising the risk of them being paid wages whilst not actively working on a job that is providing an income for the business. Using the vehicle tracking systems you can see how much time your driver/worker is spending in transit versus on-site. If you’re an engineering company you want your workers on-site for the greatest possible portion of the time, but if you’re a courier you want the driver spending as little time on-site as possible with the largest amount of pick-ups and drop-offs. A good tracking system will allow you to measure what proportion of time people are spending driving versus stopped.
Control personal vehicle usage and eliminate moonlighting – many companies have a policy of allowing a moderate amount of personal usage outside of work hours, along as it is not excessive. However, there are often some drivers that misuse this policy and use the vehicles excessively, possibly moonlighting, increasing your fuel, leasing and maintenance costs. In April 2007 the tax laws regarding personal usage of tools of trade vehicles will change. The employee’s taxable benefit for having access to a vehicle in personal hours will increase from £500 to £3500. The cost to the company is the National Insurance contribution you have to make on the additional £3000, unless you can PROVE that the employees do not use the vehicles outside of work hours. Vehicle tracking can prove this and the saving to the company is likely to be greater than the cost of the tracking system!
Improve your route planning – vehicle tracking can be used to analyse the routes taken by drivers and highlight areas of improvement. The main benefits of this are savings in fuel and time. With the price of fuel as high as it is, saving one litre is likely to pay for the tracking system for the day and saving time allows for either an increase in productivity or a reduction in wages.
Improve your customer invoices and response to disputes – if a customer raises concerns about an invoice relating to time on-site you can provide evidence easily as to how long your vehicle was on their premises and how many miles and how long it took to get there. This can save you money in unnecessary credits and give your customers confidence that you are not overcharging them. BE AWARE – this is a double-edged sword – if you are overcharging your customers, using this tool will get you into a spot of bother.
Reducing the average speed of your vehicles - as an example, if you get your vehicles to slow down and stay within the speed limits, this relates directly into fuel consumption, maintenance and accidents that could save up to 20% on your monthly running costs. The additional benefit of reducing speed is that your drivers may well keep their licenses for a while longer! And you can reduce your insurance liability. You may find that servicing and maintenance costs will reduce, however this will only be evident over time. It might take a year for you to really see the difference on your bottom-line, but it has to come if you are driving fewer miles and at the legal speed limits.
Lower insurance premiums - contact your insurance provider and request a discount when you can show them your vehicles are now driving slower, driving fewer miles and you are reducing the risk of accidents. You will also be able to see the location of your vehicle if it is stolen. If the insurance company will not give you a reduction, shop around. There are insurance companies that will offer a discount, once you can show an improvement.
Let employees take vehicles home at night - If an employee is paying £100 a month to drive a vehicle to and from work, he can sell one of his cars if he can take the company vehicle to and from work. This gives the employee a £100 a month raise and it cost you £0. We recommend you make this an option for current employees and a requirement for new employees. In exchange for saving the employee £100 a month you should charge them a restricted use fee of about £7 per week. This helps offset your cost of fuel and the GPS system that gives you the confidence to let them take the vehicle home. The company will also benefit by not needing a parking area, won't be paying wages for driving from the employees home to the first job or from the last job to the employees home.
Tax reductions – as of April 2007 the government increased the taxable benefits to drivers who have access to their work van for private use from £500 to £3,500, which may cost them up to £100 /month from their own pocket, depending on their annual income. In turn the business with have to pay the NI contribution on the £3,500. The government have also put the responsibility on the business to prove that the driver does not use the vehicle for personal use, so you can no longer just have a declaration signed stating there is no personal usage – it needs to be proven. One option is for drivers to drive back to the office on a Friday afternoon and sign the keys over for the weekend and have the driver find their own way home and back again Monday morning. A better idea is to introduce vehicle tracking as a means of proving to the tax man that your drivers don’t use the vehicles outside of work hours – but beware, this is a double-edged sword – it may also prove that your drivers are using the vehicles, in which case they will have to pay the additional tax and the business will have the pay the NI contribution on that taxable income. Speak to your accountant for the details but typically the amount of money you save the business on additional NI contributions is more than what the tracking system costs, leaving you to add other benefits straight to your bottom line.
Proof of parking ticket validity – it has been suspected for sometime that parking officials target commercial vehicles with a company logo as they are less likely to know where their vans were and for how long. Using the tracking system you can within seconds prove whether the charge is valid as it will show you exactly where the vehicle was at the time of the alleged offence and how long it was parked there. Saving money on one fraudulent parking fine could well pay for your tracking system for two months!
There is a wide range of vehicle tracking suppliers available in the UK and all will claim to be the best! The truth is there is no ‘best’ vehicle tracking supplier, but there will be a supplier whose products and services meet your specific requirements, are reliable, well established, and offer good support at the right price. This chapter is about explaining what to look for in a tracking system and what factors need to be considered whilst making a decision. DO NOT assume that all tracking systems are the same and just choose based on price! Below are the areas that consideration before making a decision.
Features – the tracking system needs to be able to do what you require of it. If all you want to do is see what time your employees arrive at a job site in the morning you have a very basic requirement that many tracking systems can fulfil. You don’t need the top-end system with 101 functions and 30 second position update rate. Conversely, tracking systems can incorporate mobile data solutions that include job despatch, messaging, driver identification, satellite navigation and a host of other functions that may be of benefit to your business when integrated with your tracking system. Qualify and quantify each benefit and prove to yourself and others in your business that there would be a return on each of these benefits and that they are not just a ‘nice to have’.
Reliability – it is more difficult that you would expect to deliver a continuous tracking service day-in day-out. Some tracking systems are inherently unreliable, for a variety of reasons. The best way for you to establish whether a product is reliable is to speak to existing customers, but the catch is that the customer list that a sales rep will give you will only be the happy ones! They are not about to supply you with a list of disgruntled customers who will tell you their product is rubbish. Therefore we strongly urge people to just get a few units to start with and prove that it is reliable. If a sales rep pushes too hard for you to sign up your whole fleet, and starts to offer significant discounts for you to do so, you should be concerned that they don’t have faith that you will want to expand the technology across your fleet once you’ve tested it.
Customer support – technology is never perfect and vehicle tracking is no different. You will have problems with some of your units over time, which is to be expected, but you need to know that you have the support there when needed. A good way to check that someone answers the phone when you need assistance is to phone your prospective tracking companies technical support line several times before deciding to sign up. There are numerous tracking companies that put all of their resources into selling or offer a lower price by cutting costs on the support side of the business and often you won’t know this until after you have entered into a lease. Nothing is more annoying than having someone take your money and then not be interested in helping you when it goes wrong.
Hidden Costs – there are a number of potential hidden costs with a tracking system, such as:-
- Installation fees
- Monthly subscription fees
- Annual software licence fees
- Separate mobile carrier fees for GPRS data transfer
- Polling Fees (when you want to discover where a vehicle is right now)
- Callout fees for repairs even if under warranty
- Deinstall/Reinstall fees when you want to move the hardware from one vehicle to another
- Software update fees
- Additional software user fees
Ask your sales rep for all of the potential costs of their tracking systems - in writing! That way if you suddenly start receiving surprise invoices you are on solid ground to contest them.
Warranty – it is prudent that you assume you are going to have a problem with your tracking system at some stage through its life. Having the units under warranty for the term of the lease is advisable to ensure there are no sudden costs associated with hardware faults. Make sure the sales rep clarifies as to what extent the warranty covers this fault i.e. does it cover the engineers’ time to site or just the repair cost?
Financial Stability of the Tracking Supplier – there are a rapidly increasing number of tracking companies entering this high growth industry, and almost as many are failing to survive in a very competitive environment. When a sales rep visits you in his shirt and tie to show you this great tracking interface on the computer in your office, the whole thing may be run by two guys from their garage in Birmingham and you wouldn’t know it.
The vast majority of tracking is provided on leases of 3 – 5 years where the tracking company uses a lease broker (Shire Leasing most likely). The lease broker finds a funder to take on your contract (e.g. The Royal Bank of Scotland) and you pay the funder on a monthly or quarterly basis for the duration of the contract. The tracking company receives all of their money in one lump sum once the installations are complete. Therefore, if the tracking company collapses the funder still requires their payments for the duration of the lease, even though you’re not getting any tracking!
You should credit check your tracking supplier and find out a bit about their history. You need to be confident that they are going to be in a position to provide you with the service that you’re paying for the duration of the lease.
The other option, if you have access to cash, is to purchase the hardware and pay a monthly subscription fee. This way you avoid committing yourself to long-term leases, but be aware that the hardware will be of no use to you if your tracking company collapses, so you still need to be prudent.
Demonstration Login – a tracking company should have a live demonstration fleet with which to show you the product and its features. They should also be able to leave you with the login details so you can play with it once the annoying sales rep has gone. Log onto it as often as you can and make sure there are no issues and put pressure on the system by selecting a lot of vehicles at once and running a report over months at a time. Many systems are unstable and will crash if you do this. If they won’t leave you with a login then they probably don’t have a great deal of confidence in their system.
Real-time vehicle tracking – this means that you can see where you vehicles are right now. This tracking will also include historical tracking which stores all of your data for a set period of time. How you access this data will vary between tracking companies – the best systems will be stable enough for you to run a report immediately while other systems will require that you be emailed the report.
Update rate – this is the frequency at which the vehicle location and information is sent to the host server via the cell phone network. Vehicle location and information will usually be updated automatically when an event takes place that the vehicle is monitoring, such as ignition ON/OFF or doors OPEN/CLOSED. Unless you are analysing routes very closely you shouldn’t need high update rates, as most of the information used is at the locations where the vehicle is turned on and off. If you need to know where a vehicle is right now you can always poll the vehicle (see Polling/Pinging below).
Polling/Pinging – this function allows you to find the vehicle location immediately by clicking a button. Use this if you don’t want to wait for the next timed update. The most common use for this function is when directing drivers to a destination from your computer and need to closely monitor their progress.
Customer Sites/POI (Points of Interest) – with most tracking systems you can enter your own site information either as a radius around a post code or as a drawn boundary. When a vehicle is within the area the location information shows the site name instead of the address i.e. Instead of displaying 12 Wilson Street, Fulham, London the tracking system would show Track-IT. This makes it easier to see what places the vehicle has been to but also allows you to run reports on how often and for how long a vehicle has been to that site. This can be a great tool for monthly invoicing to a customer that has multiple visits.
Geofencing – this is similar to a Customer Site/POI but is designed to create an action when the vehicle moves in or out of a designated area. There may be certain areas that if your employees were entering or exiting you would like to be alerted, or have an email sent to you. If you pay your employees from when they leave home you can put a geofences around their postcode and run reports for the week on when they left and arrived home each day. This is great for cross-checking their timesheets. Other companies use it to alert customers automatically via email that one of their vehicles has just arrived on site.
It’s an exciting time for fleet owners as they realize the advantages of GPS vehicle tracking; and we here at Track-IT promise to keep our eyes on new technologies as we bring you the best of the GPS tracking industry. Thousands of small to medium sized business owners have already helped their fleets and employees become more productive. By saving one hour a week or adding one extra service call a week, a fleet owner can realize a return on investment in as little as two months. But beware! If you do nothing else make sure you do these three things before signing any contracts:
- Credit check your potential tracking supplier. Most of them are in awful financial condition.
- Make sure businesses in your industry that are using it are happy with it.
- Get a list of all potential costs in writing.
Please feel free to browse our GPS vehicle tracking products at www.Track-IT.co.uk or phone us on 08707 60 55 61. We would love to share our knowledge with you.