Fleet of the future: revolutionary tech developments changing the fleet management sector

1
Fleet management of the future

From driverless cars to big data, tech innovations are predicted to revolutionise fleet management – with ever more bottom-line benefits likely to follow. Industry insiders tell us what leaders should be gearing up for…

The fleet management sector is undergoing seismic change. Technological developments are already enabling the ways that businesses operate, monitor and control the use of company cars and vans to evolve and improve at an unprecedented rate. Telematics, for example, can allow those at the helm of companies to quickly and easily view a vehicle’s precise location at any given moment or compile accurate records of business mileage.

And gone are the days when drivers had no option other than to manually fill in an inspection form before taking a vehicle on the road. These details can now be quickly completed – and submitted – using apps downloaded onto handheld devices such as smartphones or tablets.

But functions like these are predicted to be only the tip of the iceberg as the sector rapidly takes advantage of technological advancements. Particularly, the evolution of technology is placing an increasing amount of data at the disposal of the companies that invest in it. And the common consensus is that the rewards, particularly the financial benefits, of utilising this ‘big data’ effectively are potentially huge.

Some industry experts believe that the next decade within the fleet management sector will be largely defined by the methods companies employ to ensure that this information is put to effective use.

Gerry Keaney, chief executive of the British Vehicle Rental and Leasing Association (BVRLA), which represents the interests of the £20bn sector nationally, says: “Technological advancements will continue to generate the most important developments within the fleet sector for many years to come. These developments are going to transform fleets in terms of both their efficiency as well as the cost savings that they can make.

“And these innovations are taking many different forms and will affect everything from the way managers operate their fleet to the vehicles that are used in it. Indeed, the evolution of driverless cars has the potential to revolutionise how workers utilise their time getting between destinations.”

Fleet management: mapping the road ahead

GE Capital – one of the world’s largest suppliers of vehicle leasing and fleet management services – surveys 250 senior industry professionals on a quarterly basis to assess what is happening within the fleet sector. As part of this, it asks participants what their “fleet vision for the future” comprises.

Gary Killeen, fleet services commercial leader for GE Capital UK, explains: “We’ve discovered that fleet decision-makers envisage some of the ways that cars provided by companies will change – with greater interest in shared company car schemes and more use of pool cars. The impetus for these developments is likely to come from continuous efforts to make each company car as productive as possible. Of additional interest is that some alternatives to the company car are perhaps being given more consideration than in the past.

“While it appears a public transport-only travel policy is not considered viable, alternative travel methods such as rail and air, as well as home working and ongoing advances in teleconferencing technology, may have a greater part to play in organisations meeting important objectives such as minimising their carbon footprint and reducing fuel costs.”

Entrepreneur Richard Bunn is founder and managing director of Bedfordshire-based van leasing business White Hot Vans. He established the company after working across the fleet sales, daily rental, contract and hire, and leasing departments of the Ford Motor Company.

Bunn says that cutting costs and carbon emissions will define the next decade within the fleet sector. “Both the car and van markets for manufacturers are driven by innovation in space and connectivity, as well as the all-encompassing requirement to reduce emissions and improve fuel economy,” he points out.

“It is demanded by government but expected by fleets as a way of future-proofing their tax position. In the commercial vehicle market, the latest vans have greater cubic capacity but with no increased footprint. A business can downsize and reduce costs as well having lighter engines with reduced emissions for the same output, and I expect this to gain momentum in the future.”

Bunn adds that pure electric vehicles – those which are entirely powered by a rechargeable battery – are still “far from mainstream in terms of purchase consideration” for most commercial organisations. This owes much to the charging infrastructure they require and anxieties about their range. But the situation is evolving.

In the meantime, hybrid vehicles – which combine petrol or diesel engines with battery-powered motors – are expected to gain a stronger foothold in fleets nationwide.

Selwyn Cooper, head of business sales at Volvo Car UK, concludes: “Cost reduction and value for money will remain the biggest drivers of fleet policy in the future. And this will remain the case even as the economy continues to grow. But alternatively fuelled vehicles that emit extremely low levels of CO2 and deliver high levels of fuel economy will become an increasing part of the modern fleet mix.”

For more information visit
bvrla.co.uk
iod.com/carrental
gecapital.co.uk
whitehotvans.com

Connected and driveless cars

Cars that drive themselves might once have been the stuff of Hollywood – but they’re now fast becoming reality. In July, business secretary Vince Cable unveiled a £10m plan to allow three cities the chance to test-run driverless cars.
The BVRLA’s Gerry Keaney says: “The next step is a car that takes over driving in traffic jams, inching itself along at low speed. Within five years or so it should be possible for cars fitted with the right kit to park themselves in multi-storey car parks. From that point, the future becomes harder to predict.”

The BVRLA believes that fully autonomous driving on standard roads is still probably 15 years away and is dependent on a complete overhaul of the regulatory system and major improvements in mapping. But California-based technology giant Google has expressed its intention to pioneer these self-driving vehicles.

Earlier this year, Chris Urmston – director of Google’s self-driving car project – wrote in a blog that the technology giant is in the process of building “about 100 prototype vehicles”. Many analysts believe that driverless cars will develop naturally from ‘connected’ vehicles, which are also in a rapid state of evolution. It was also announced this year that Google has joined Apple, Microsoft and other tech companies in forging alliances with major car manufacturers to integrate mobile technology into their vehicles.

From a fleet perspective, the usefulness of connected cars lies in their ability to collect information about their own operation and then make that data available for management use. A connected car could book itself in for a service or report on its own fuel consumption performance in all kinds of different driving conditions and measure this against an ‘idealised’ driving style.

Electrical Vehicles 

One of the biggest costs of running a fleet is fuel use. It can cost a quarter of the price to refuel an electric vehicle (EV) compared to a conventionally powered car or van. Unsurprisingly, these vehicles are increasingly entering the ranks of fleets nationwide. The term EV refers to a vehicle powered, in part or in full, by a battery recharged from the electricity supply.

In addition to pure-electric cars and vans it also refers to those hybrid vehicles which use both petrol or diesel engines in conjunction with battery-powered motors. It is widely thought that if the government is to halve its carbon emissions by 2025 from what they were in 1990, the uptake of EVs needs to be greatly accelerated.

Latest figures from the Society of Motor Manufacturers and Traders (SMMT) show that 1,897 ‘pure-electric plug-in’ vehicles were registered in the 12 months to the end of May 2014 – up 121 per cent from 858 vehicles in the previous year.

Over the same period, 15,138 petrol-electric hybrid vehicles were sold, representing a 50 per cent rise from 10,095 the previous year, while 2,695 diesel-electric hybrids were sold – up from 903. In the year to the end of May, a total of 1,058,974 vehicles were registered (948,666 in 2013) meaning that the total registrations of EVs are still less than two per cent of the overall market.

Before a company deploys EVs, it is first necessary to understand what function that vehicle will fulfil. Any anxieties concerning the range of pure-electric vehicles – which can be around 100 miles on a single charge – can then be addressed.

It is also possible at this point to compare whole life costs (WLC). The government provides a range of taxation benefits and upfront grants for the purchase of EVs and lower-emitting vehicles. This funding includes the Plug-in Car Grant, which enables businesses purchasing a qualifying ultra-low emission car to receive a grant of 25 per cent towards the cost of the vehicle up to a maximum of £5,000.

These fiscal incentives – plus the new charging infrastructure and vehicles coming onto the market – look certain to make the deployment of EVs across fleets more attractive than ever.
smmt.co.uk

EV in focus Volvo V60 plug-in hybrid R-Design swedish multinational manufacturer supercharges the exec market

Volvo broke new ground in the EV sector earlier this summer. The launch of its V60 Plug-in Hybrid R-Design model established – by common consensus – the premium executive EV in its class.

The car has an on-the-road price of £51,675 but its fuel efficiency results in there being huge savings for company car drivers. Emitting just 48g of CO2 per kilometre it is also the only car in its class to be eligible for the government’s £5,000 Plug-in Car Grant.

The R-Design’s low emissions also mean that it has a benefit-in-kind tax value of just five per cent. In effect, this means that any company buying it acquires a ‘premium sportswagon’ for ‘supermini’ money.
The vehicle also attracts tax relief in the form of a 100 per cent first-year allowance. And that’s before the savings on fuel bills during the car’s lifetime are factored into the equation. Consequently, businesses buying outright pay £37,340 after the £5,000 grant and write off the full cost of the car against taxable profits in the year of purchase. Company car drivers on the 40 per cent income tax rate then pay £86 per month for the R-Design.

Selwyn Cooper, head of business sales at Volvo Car UK, says: “Fleet managers are going to increasingly face the challenge of offering company cars that employees will actually want to drive. People can buy this car with their hearts and their minds because it underpins all the rational arguments concerning ownership and usage, the environment, taxation and running costs.”
volvocars.com/UK

Apps: the future analytics at your fingertips will revolutionise sector

The availability of apps – the applications or programs that can be downloaded onto mobile devices such as smartphones and tablets – has burgeoned alongside the technology that supports them.

Over the past five years, apps have been developed to enable users to do everything from reporting roadside accidents to testing a driver’s eyesight or finding petrol stations in unfamiliar cities.

Many companies report that those apps developed to allow vehicle checks before a fleet vehicle is taken on the road are particularly useful. And the consensus is that such apps will play an increasingly important role in the future of the fleet management sector.

The BVRLA’s Gerry Keaney says: “Apps are going to become an integral part of the driving experience generally. Many of the latest app-based telematics solutions now combine driver assistance features such as mileage capture and route optimisation, with fleet manager functions such as fuel optimisation and asset tracking.”

Some industry analysts believe that apps will ultimately allow black boxes to be scrapped altogether. This owes much to: the constantly increasing processing power that’s embedded in modern smartphones and tablets; their improved battery life; and their ability to automatically collect location and motion data while running in the background, transmit this to a cloud server, and do so reliably across an entire fleet.

App in focus: wejo Fleet developer says apps will soon be standard fittings

British app developer wejo understands that ‘duty of care’ is now of paramount importance to every company operating a fleet. Earlier this summer, it launched a free app, wejo Fleet, which runs on drivers’ smartphones linked to an online employer dashboard.

It uses the phones’ GPS, gyroscope and other sensors to collect driving performance data, which is then analysed by “a suite of proprietary algorithms” before relaying that information to the dashboard.

The app gathers more than 10 different kinds of data, which are analysed to give each driver a score, allowing employers – who may not have a dedicated fleet management role or training – to see, at a glance, how safe their staff are behind the wheel and take remedial action if necessary.

Wejo chief executive Richard Barlow says: “Further ahead, the future is apps running not on smartphones but on 4G-enabled connected cars directly.

They will be seen as commonplace a part of a car’s features as sat-nav, with apps coming as standard when leasing or buying a car.”
wejo.co.uk

Telematics: the future

Rapidly improving technology will enhance decision-making. Companies operating car and van fleets are increasingly investing in telematics. In short, these fleet management systems can help firms cut costs, improve productivity and manage their vehicles more efficiently.

Telematics can facilitate everything from a ‘nearest vehicle’ search to information on the current status of that car or van – and whether it’s being used inappropriately – as well as timesheet reports. And this, in turn, leads to improved customer service as well as helping organisations fulfil their duty of care obligations. Telematics frequently uses Global Positioning System (GPS) technology fitted via ‘black boxes’ in vehicles to relay the desired information back to authorised users.

Derek Bryan, European sales director at telematics company Fleetmatics, says: “Directors now expect technology to meet their needs for more analysis, insight and clarity into the day-to-day running of their fleet. GPS fleet tracking has gained widespread popularity and is emerging as an essential business tool. Once fleet owners install GPS tracking systems in their vehicles, they discover how important the technology is in streamlining and improving their entire operation in ways never imagined.”

One of the key challenges surrounding the use of telematics will be to ensure that the large quantity of data that’s generated is used effectively. “Wherever you look in the fleet sector, people are promising or demanding more data,” says Ashley Sowerby, managing director of fleet software company Chevin Fleet Solutions.

“Manufacturers are talking about connected cars, insurers about on-road behaviour, and service and maintenance providers about finding the best value prices for all kinds of workshop jobs. This information needs to be formatted into reports that actually tell decision-makers what is happening on their fleet.”

Bryan agrees with this sentiment, adding: “Future developments will revolve around providing satisfactory answers to questions raised at board level. In this arena, the demands are for a lot more information and insights to support quick economic decisions. Thanks to the rapid evolution of technology, telematics is meeting the challenge.”
fleetmatics.co.uk
chevinfleet.com

Vehicle rental: the future 

Flexibility will be key for commercial fleets, say industry leaders.

Vehicle rental companies are anticipating that their role will evolve in the future. They fully expect to become travel management consultants with expertise surrounding sustainable mobility solutions.

Neil Cunningham, general manager of car-hire giant Hertz UK and Europe (off-airport), explains: “We’re anticipating that electric vehicles, hybrids, and car sharing models will have an enormous impact on the future of the industry. Fleets are increasingly looking for choice and flexibility in terms of sustainable travel and mobility solutions, with environmental issues and pollution levels increasingly front of mind.

“Additionally, advances in telematics and big data mean that car sharing networks including our own hourly car rental service Hertz 24/7 – which provides access to a fleet of low-emission vehicles – can be used to cut down on fleet size, while also reducing overhead costs and the company’s environmental footprint.”

With rising fuel prices as well as the cost of servicing, road tax, and insurance, many companies that don’t have dedicated fleet managers are already turning to the rental companies to manage their commercial fleets more effectively.

Adrian Bewley, director of business rental at Enterprise Rent-A-Car, says: “Many factors will impact how companies use car hire in the future. Technology, globalisation and the mitigation of risk and corporate responsibility will all have a growing impact on how businesses keep their employees mobile.

“Organisations are turning to car hire companies to offer a broader range of flexible solutions that embrace a much wider range of needs. This has already resulted in the evolution of daily rental into a range of flexible short- and longer-term contracts, as well as solutions such as rental-on-demand car sharing to ensure mobility.”
hertz.co.uk

About author

Ben Rooth

Ben Rooth

Ben Rooth is an award-winning freelance business journalist who has interviewed everyone from Prime Ministers to the chief executives of FTSE 100 listed companies. Over the past 20 years, he’s filed stories from destinations as diverse as Kabul, in Afghanistan, and Palm Springs, in America.

1 comment

Post a new comment

Time limit is exhausted. Please reload the CAPTCHA.