Is Technology Benefiting or Hurting Fleets?
While distracted driving, higher repair bills and Big Brother become more worrisome, is there an upside?
May 30, 2012
More than previous years, the theme of technology and its benefits and disadvantages seemed to permeate the expo floor and classroom seminars at NAFA, the annual fleet conference and expo, held last month in St. Louis. The question was also posed to a panel of the heads of the major fleet management and leasing companies.
Why would fleet administrators even be worried about technology? In 2010, Nationwide Mutual Insurance Company conducted a study that about four in 10 accidents were a result of technological distraction. Indeed, the application of in-car technologies is only escalating. If you’re just now convincing your drivers to refrain from handling a cell phone in the car, the impulse to program a navigation unit while driving or fiddle with a gadget-riddled console may be just too great.
Repairs are another potential worry. A leasing exec on the panel mentioned an out-of-warranty radio repair that used to cost $200 can now be upwards of $2,000. When it comes to hybrid vehicles, it gets worse: The average price to replace a hybrid inverter assembly is $7,391, according to a survey by an aftermarket parts manufacturer. This is compounded by the fact that the shortage of qualified service technicians will negatively impact the price of repairs.
And when you’re ready to remarket your fleet, it’s getting harder to know which techie features will hold their value.
Some view technology through the lens of Big Brother, especially if you don’t want your vehicle to be tracked. On the roads, red-light and speed cameras, cashless toll roads and “smart” parking meters are on the rise. How far can technology go? A new regulation in France requires breathalyzers to be installed in every car!
However, the NAFA panel’s consensus was to view technology in fleets as a glass half full, in fact, almost full. And walking the show floor reinforced this view.
Auto manufacturers trumpeted technologies such as nine-speed transmissions, cylinder deactivation and start-stop systems that are boosting miles per gallon for a smaller premium than buying a hybrid. No, the internal combustion engine isn’t dead. Advances in materials technology, such as carbon fiber, are reducing the weight of vehicles and also positively impacting on fuel economy.
Technology has impacted safety with collision prevention controls such as adaptive cruise control and blind spot monitoring.
Oil life monitoring systems are elongating the preventive maintenance cycle. All these advancements have provided a net benefit to depreciation.
Outside of vehicle mechanics, technology allows the collection of data on almost every aspect of driving and fleet, and that data is actionable.
The constant need for the next generation of drivers to be connected, even in the car, gave the execs on the leasing panel pause. However, technology exists to combat distracted driving by disabling smart phones while driving, and these products were on display at the expo.
Technology used in car sharing is beginning to dramatically change the pool vehicle concept. Zipcar exhibited at NAFA for the first time with a fleet solution. Hertz has its own program for fleets called Connect to Go.
And, ironically, the same company that implements those traffic cameras also offers streamlined solutions for processing the violations.
The key takeaway in all this could be found in another question posed to the leasing panel, in which they were asked to foretell the evolution of the fleet manager in five to 10 years. The execs said managing fleet will become more complex and fleet managers will be asked to do more with less. They advised fleet managers to become strategists and fleet “SMEs,” or subject matter experts. They saw a significant evolution in responsibility from administering to more of a management role.
In all this, you guessed it; technology is a key facilitator. Embrace technology and understand how it will help you. If you don’t, there are plenty that will. While technology has the ability to both hinder and help fleets, this is no time to be a technophobe. One exec pointed out that technology will move five times faster in the next five years than in the previous 25. In his words, “You ain’t seen nothing yet.”
Author: Chris Brown | Posted @ Wednesday, May 30, 2012 12:00 AM