Digital Transformation » Systems & Software » Telematics to reduce business car travel expenses and fraud

Telematics has been used by commercial van and truck fleet managers to unlock an array of operational and financial benefits for decades. As access to telematics technology has been extended onto the smart phone and increasingly, via the cloud, into highly visual and usable dashboards viewed via any connected device; it has become cost effective to extend the technology into business car fleets.

One of the key reasons that telematics is now being deployed in car fleets is for business fuel and business mileage fraud detection. According to Department for Transport as much as six per cent of all fuel charged to businesses is for private use and is therefore fuel fraud. Highly cost-effective telematics combined with intelligent fleet management systems, can now be set up to spot expenses claim discrepancies.

Losses associated with mileage fraud is often an even large loss to employers offering business cars and reimbursing employees on HMRC-recommended pence per mile basis for distances they’ve travelled on business. A Webexpenses global study carried out last year found that 47 per cent of business travellers admitted falsifying or exaggerating their travel costs. It’s commonplace in some businesses for claimants to ‘round up’ distances travelled in expenses claims.

A typical comment from this survey’s respondents was, “I don’t claim for anything crazy, just add a few extra miles onto journeys.” But even the smallest individual losses, when multiplied across a company, accumulate to become a serious drain on firms.

Telematics offers a route to stopping mileage fraud in its tracks. Telematics information displayed on our fleet management dashboard now offers a central repository for all travel mileage by vehicle and driver. If driver travel expenses claims are significantly larger than mileage being logged by the telematics device as business journeys attributed to that driver’s car, then systems could be configured to flag up an alert to designated fleet managers. If a business trip includes a long non-work detour, it’s easily spotted, and claims can be adjusted downwards accordingly.

The new generation

And as car fleets move to hybrid and pure Electric Vehicles (EVs) over the next few years, we believe telematics is going to become even more important for the management of car fleets because tight monitoring of mileage becomes ever more important with these types of vehicles.

If you read the reports from early adopters of hybrid fleets, fuel efficiencies from these vehicles are only fully-realised over optimum daily journeys of up to 60 miles. Some hybrids have electric-only maximum distances below 30 miles. The highest efficiencies come from stop-start, city-based driving where the vehicle is purely running on electricity.

Telematics capabilities, which are increasingly built into the next generation of hybrids and EVs, reveal whether efficiencies are being realised or whether some types of jobs still demand combustion engine powered-vehicles to gain higher fuel efficiency.

Bear in mind that pure EVs of even the top of the range Tesla can manage a maximum of 400 miles before recharging. Battery life reduces mileage limits by as much as five per cent in the first 10,000 miles. Battery efficiency deteriorates more slowly after that. EVs’ mileage limits can be reduced considerably by cold weather (falling by as much as 50 per cent of quoted numbers), as well as by repeated rapid acceleration.

Clearly battery performance is something that telematics solutions will be able to monitor to assess if performance is moving outside manufacturers’ promises. If specific models are found to have poorer battery performance this will impact already unpredictable, and in some cases, downright poor EV residual values which financial directors and/or fleet managers will need to keep an eye on.

Telematics, if combined with highly modular, responsive and affordable Cloud-based fleet management software, offers a very cost-effective way for smaller fleet managers to gain access to back office efficiencies, running cost savings, as well as reducing the risk of fleet capacity being lost due to accidents, driver fatigue or misbehaviour or vehicle failures.

In short, the technology is now here and is payable via small monthly subscriptions well below the cost of running a mobile phone. It means that sophisticated telematics and fleet management capabilities are being democratised – spreading the benefits from larger commercial van and truck fleets only, to even the smallest ones leasing just a few cars.

Cloud-based fleet management software suite ODO is now integrated with telematics solution Transpoco. ODO is a Business Unit of Drive Software Solutions