I (initial investment) + O (operating costs) — R (remaining value after five years of depreciation), a simple formula to calculate the total cost of ownership (TCO) for a fleet vehicle. Everybody knows the TCO as THE standard for evaluating a vehicle’s cost in the fleet management industry. That’s the source of the problem: costs are assessed by car and not by driver or user, although driving behavior significantly influences costs. On the bottom line, improving your driver’s behavior behind the steering wheel is not only favorable when it comes to your overall costs. You are investing in your drivers’ safety — by implementing good habits. But is it possible to change the driving style of your fleet members?
How to minimize TCO
Fleet managers primarily focus on lowering their TCO through decreasing maintenance costs and vehicle downtimes. But how total are the total costs of ownership, and how can they be reduced by changing driving style and adapting your routes? Fleet operators can mainly influence the initial costs by selecting the vehicle model and negotiating acquisition costs. With the steady increase in mobility data availability, finally, additional axes of cost reductions are available.
A tech solution for every budget and every coaching need
How are you currently monitoring your fleet? Most companies have essential tracking solutions in place, but why should the data only be used to know where your drivers are? (Check out our related blog article for some background information on making further use of your data.) Looking at the variety of solutions to collect trip data and monitor driving behavior, we can separate three types of solutions: smartphone-based applications, black boxes or dongles, and advanced video telematics. Selecting the right solution for your fleet depends on your coaching objectives and the money you can set aside for this. Smartphone applications are easy to put in place as they do not require any physical modification during integration. The power of analytics and accuracy of trip data collection is determined by the software developed for trip and event detection and back-end reporting and analytics. Investment wise, smartphone-based solutions are starting at a price range of 3–5 Euros/driver/month and are an ideal testbed for checking out the effectiveness of fleets telematics. Black boxes are connected to the vehicle’s CAN bus, sampling and providing accurate vehicle data to an analytics platform. These solutions are ideal for energy consumption or car wear monitoring and provide deep insights for coaching. With a monthly fee for an individual driver of 10–20 Euros, the solution ranges cost-wise between both others. The most advanced solutions rely on AI-empowered video monitoring systems. Do you fear that your drivers are not paying enough attention to what is happening on the roads, being distracted, or tired? Then, video camera systems are the way to go — however, with a monthly fee per driver starting from 30 to 40 Euros, they are not the cheapest solution. Knowing your coaching objectives, we can advise you in picking the best suiting tech enablers for your fleet.
Reducing accidents to lower repair costs and increasing driver’s safety
Driving down the frequency and severity of accidents needs to be at the center of fleet operators’ efforts to decrease accident-associated costs. Over the last few years, the number of accidents on the roads decreased or at least stagnated. However, relying on road accident statistics, accident risk depends on where you are driving: during the last years, the number of crashes in urban areas significantly raised compared to rural ones.
You can’t influence the weather…
… But you can coach your fleet members not to speed when unnecessary or to drive less aggressively, which is causing 66% of fatal accidents. Our mobility profiling methodology allows training your fleet members on 19 main causes for accidents, including behavioral and contextual factors, ranging from road environment contribution, injudicious actions, driver errors or reactions, impairment or distraction, to behavior or inexperience and affected vision due to weather. Understanding the threats poor driving habits pose to your fleet in human, economic and operational cost dimensions, having a fleet driver training strategy in place makes a lot of sense. Communicating these factors to your fleet drivers in a simple-to-understand way is vital for setting up an effective coaching program. Allow your drivers to evaluate their driving behavior with critical insights into their mobility with easy to compare scores and actionable tips to improve their driving style. With smartphones in almost every pocket, mobile applications with immediate trip analytics and feedback are the perfect solution. Side note: proving you have a low-risk driver portfolio to your insurance can significantly lower your insurance tariffs.
Lowering the operating costs
Fuel and maintenance costs are apart from insurance premiums, the main cost drivers. With energy costs being on the rise for the past decades, lowering fuel consumption by only 10–15% fleet-wide can significantly reduce your operational costs. What is influencing your fuel consumption? The answer is simple: it’s the driving style. Speeding, harsh maneuvers combined with specific road topologies can empty your fuel tank much faster than expected. Coaching your fleet members in predictive driving can lower your expenditures on energy. Comparing the fuel consumption of the actual trip against a reference driving for the same trip conditions provides your team members with an easy-to-understand benchmark to evaluate their performance in ecological driving.
Car wear is also greatly influenced by the way you drive. It is common knowledge that harsh acceleration and braking often due to non-predictive driving eat up your brakes much faster than it needs to be, resulting in shorter replacement periods and finally raising your maintenance costs. Moreover, the weather and road surface conditions can significantly impact vehicle wear, in particular, tire, suspension, or engine. Coach your drivers to reduce the impact on the main vehicle components by adapting their driving habits and taking adapted routes. Having insights into the vehicle component status fleet-wide opens the door to predictive maintenance, ultimately decreasing unexpected vehicle downtimes.
The right fleet composition
With more electric, hybrid, or plug-in hybrid vehicles being introduced, fleet operators have a broader choice in selecting the right car for their fleets. Still, many fleet operators question whether EV, HEV, or PHEV are suitable due to their range. With accurate analytics on trip data and using our electromobility transition assessment, fleet operators can quickly determine which of their fleet vehicles can smoothly transition to an electrified one, having minimal impact on their daily operations in terms of autonomy.
Driver feedback and how to keep fleet members involved
Coaching is all about providing the proper feedback to your drivers. The variety of coaching solutions ranges from smartphone applications with simple to understand analytics, over analytics dashboards with more advanced insights or additional services (e.g., reporting tools, communication, and team chat solutions, or leaderboards), to one-on-one feedback talks backed by visual analytics, that can be combined with camera footage. Lowering accident risk, driving more sustainably and greener are meaningful objectives in themselves. But are they sufficient to generate driver buy-in? Setting up a driver rewards program is a powerful tool to guarantee your fleet members’ commitment. Gamification is a great solution to boost the acceptance and continued engagement of your fleet members. We help you design a transparent and attractive fleet-wide rewards program relevant to your drivers and guarantee sustainable success.
Key Takeaway: Driving style is one of the main cost drivers for fleets and significantly influences risk, eco-efficiency, and car wear. With easy-to-understand coaching and training exercises, it is possible to change driving behavior and lower your TCO. Enable digital tools and platforms, involve your fleet members, encourage them to drive better, safer, and greener.