Telematics systems are naturally sold off the back of the savings they generate, but it’s hard to put a finger on exactly how much money a business can expect to rake back by using one.
Having an idea of how much you’re actually spending in the first place is difficult. If you’ve taken the time to figure it out then chances are you’ll think your business is shelling out too much, and that there are costs to be recouped.
“Typically, you’re looking at fuel savings of 10-25%, sometimes it’s a lot higher [with a telematics system],” says Giles Margerison, sales director at TomTom Business Solutions.
Bracknell Forest Council’s operations director and deputy chairman of fleet association ACFO, Damian James, reckons you’re looking at a similar amount: “I’ve heard anywhere between 10% and 50%. Conservatively, I’d say 10% as a minimum but that depends on what you do with it.”
And that’s the catch. Buying into a telematics package can cut a fleet’s fuel spend by a huge sum, but it requires consistent input from the business. James continues: “After companies install systems there seems to be a drop in mileage generally, once people realise they are being monitored. Over time that fades, unless someone’s managing the data that comes through. It’s a bit like driver training – you see a big improvement immediately afterwards but the usual habits creep back in, then you do a repeat session and it improves again. For me, it’s about having the resource to manage that data.”
Margerison claims that most companies don’t necessarily know what they’re spending on fuel – it’s only when they sit down and think about it that it becomes a problem. “You need to understand the feeling around fuel bills,” he says. “Do you think it’s about right or do you sit down and think ‘crikey, that’s a lot’? The vast majority of businesses don’t know. As long as some private mileage is claimed, they generally don’t mind.
“HMRC doesn’t have to do a lot of digging to find problems, though. If they see Monday and Friday fill-ups with 10 miles of private mileage, it’s pretty obvious.”
The private mileage issue, and the fact that a company car can and usually will be used for personal trips, is crucial when it comes to what a business is paying for. It is something that a properly implemented telematics programme can help with, but it’s also an area that can prove contentious with drivers.
According to Chris Chandler, principal consultant at Lex Autolease, firms need to tread carefully when they’re introducing such a programme: “In a car it can be more contentious with drivers, but there are ways round it. Company cars have a private use element, so there can be a more negative reaction to having that installed. You can have a button just to log private journeys in detail that the driver can press to show where the last business journey ended and where the next one started.”
He continues: “With private mileage you have no control on expenses whatsoever. If you pay business mileage at its flat value then it is in the driver’s interest to drive efficiently.”
Once you’re keeping an accurate eye on a fleets’ fuel spend it’s possible – and advisable – to dangle a carrot in front of those employees willing to drive more economically. James reckons the simplest way to create that incentive is to split the savings with the most economical staff: “Rewarding drivers is about giving them something they value. Maybe splitting the saving percentage with the driver. Obviously, you can’t do that with public sector fleets, but for others, if you save 20% you could give 5% to the driver.”
Margerison agrees that the carrot is better than the stick when it comes to getting drivers to play ball: “If you punish the bad guys they won’t share that and they’ll probably try and criticise the system, so it’s bad karma. Positive engagement works better. You can do it as easily as buying a cheap cup and crowning the top driver at your monthly meeting.
“The second part of that is to say to them, ‘look, we’ve got to manage the fuel costs – if you work with us on the fuel side, we won’t have to cut wages’. There’s also money – have a staff do or offer individual incentives for savings. Some of them can just go straight to those drivers – for example, a 5% salary increase at your next review.”
