WILL ACCELERATE - Merchants Fleet Management

SPECIAL REPORT introduction
PRODUCTIVITY MAINTENANCE
VEHICLE
SELECTION &
PURCHASING
TAXATION
LICENSE
& TITLE
Pace of Change
will Accelerate
In the next 10 years, the fleet industry is forecast to change more than it has in
the past 15 years. These changes will mirror the broader transformation percolating throughout the global economy, impacting many industry segments. By Mike Antich
H
ow will fleet management change
in the next 10-plus years? In the following five articles, we have assembled a stellar ensemble of leading
subject-matter experts who present wideranging forecasts about an array of fleet issues from both a service and product perspective. They include forecasts on:
● Faster, better, and more sophisticated
productivity tools.
● An explosion of driver apps and the entrenchment of mobile technology as the
primary medium for driver interaction.
● Increasingly sophisticated vehicle connectivity tools enabling predictive analytics.
● The fleet maintenance transition from
reactive to proactive practices using remote diagnostics tools.
● The fleet impact of the larger societal
migration to the “Internet of Everything”
and the use of Big Data to drive fleet data
analytics.
● The impact of CAFE regulations on
new-vehicle selection and purchasing.
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automotive fleet I january 2015
● Fleet taxation trends and the desire of
some legislators to tax Web-based services.
● Technological changes to license & title services.
In most cases, these fleet trends will be
manifestations of a broader macro transformation that is percolating throughout the
global economy. These changes will impact
many different industry segments, with fleet
representing only one offshoot of this multipronged, multi-faceted change.
Historically, fleet has proven to be an early adopter of new technologies and business
practices; therefore, it is important to watch
how technology and business practices are
evolving outside of fleet. How will these innovations be incorporated into fleet management? The greatest catalyst for fleet management change in the next 10-15 years will
be technology-driven, and it will be driven
by technology developed outside of fleet
management that will be customized to our
business practices. This will result in myriad
of fleet functions redefined by technology.
Generational Upheaval
The other major change that will transform fleet management will be driven by demographics. The majority of people in fleet
today occupy a narrow demographic band,
primarily baby boomers. In the next 10-15
years, there will be a dramatic generational
change as baby boomers retire. A new generation of thought leaders will emerge, who
will have never known life without the Internet, social media, and on-demand connectivity. They will be comfortable working in a
fleet environment increasingly governed by
technology and will be receptive to adopting
new technologies. I predict this new techsavvy workforce (and management) will demand and even accelerate the adoption of
technological solutions in fleet operations.
In the next 14 pages, this special report will offer a detailed exploration of
how the fleet industry will change in the
next decade.
Let us know if we missed anything.
[email protected]
SPECIAL REPORT
Future Trends in Fleet
Productivity Tools
Mobile apps will be fully integrated into fleet and become the medium for driver
interaction, while cloud computing will accelerate the transmission of data.
Vehicle connectivity will add a new dimension to fleet management. By Mike Antich
D
ramatic changes are on the horizon
for fleet productivity tools. Companies will continue to embrace
the use of technology in fleet vehicles to reduce fleet costs, as well as drive
employee productivity.
Advancements in automotive technology will see future vehicles with integrated
technology to directly manage fuel purchases and capture telematics data to manage
driver behavior and proactive maintenance scheduling.
One forecast is that the data coming from
the vehicle itself, combined with maintenance data and general data on that model, will allow fleets to target replacement on
at a glance
Various factors will impact future fleet
productivity tools including:
Increased usage of mobile
applications for daily fleet operations.
Enhanced used of “Big Data” for analytics and fleet information.
Use of cloud computing to accelerate
fleet decision making, resulting in
faster interaction with drivers.
Use of online tools to analyze
“what-if” scenarios.
Increased use of digital wallets, which will supplant fuel cards.
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automotive fleet I january 2015
a vehicle-by-vehicle basis rather than by a
generalized replacement date.
The trend toward cloud computing will
enable fleet solution providers to offer higher degrees of data and system integration.
These new technology capabilities will result in highly customizable solutions for
fleet managers.
Here are the top trends that will impact
fleet productivity over the next 10 to 15 years:
■ Mobile Applications will be
More Integrated into Daily
Fleet Operations
“Mobile devices will
have tighter integration
into vehicles. Beyond connecting hands-free phone
and music, mobile devices will be able to wirelessly sync key vehicle data, ROZMIAREK
Wheels Inc.
including mileage, health
checks, and performance, wirelessly with
the mobile device, which, in turn, can use
that information for applications,” said
Jerry Rozmiarek, assistant vice president
– information technology at Wheels Inc.
“Mobile devices, already ubiquitous in
2014, will be the sole way drivers handle
their fleet tasks. Mileage reporting, trip
logs, and finding vendors will all happen
through mobile devices and will make
use of the capabilities (such as location
awareness) of those devices to automate
tasks. All key fleet documents will be digital and available in a mobile device,” added Rozmiarek.
■ Integrated Technology to
Free Vehicles from Fleet
Policy Constraints
“Vehicles will be produced with integrated
technology to directly
manage fuel purchases
and capture telematics
data to manage driver
behavior and proactive
COFFEY
maintenance scheduling. Merchants
Fleet
Management
This improved data will
allow vehicles to be cycled based on their
individual merit as opposed to a standard
fleet policy,” said Tom Coffey, vice president, sales and marketing at Merchants
Fleet Management.
■ ‘Big Data’ to Have a Big Impact
“ ‘Big Data’ will drive decisions for all
aspects of fleet management, including
vehicle selection, maintenance management, and driver safety planning. With
the continued use of fleet analytics and
A New Generation of Telematics will Emerge
Subject-matter experts see telematics becoming increasingly crucial to fleet management:
accessibility to greater
amounts of data, fleets
will become more efficient, operate with fewer resources, and show
an increase in productivity,” said Becky LangLANGMANDEL
mandel, director, strate- LeasePlan USA
gic modeling & analytics
at LeasePlan USA.
Likewise, other subject-matter experts
see Big Data as having a tremendous impact on fleet management.
“In the near-term, Big Data will help us
understand relationships we never would
have looked at in the past, metrics such as
connecting sales or delivery performance
to the vehicle, and identifying patterns for
accidents or connections that we have yet
to think of. The point is
that we will be evaluating data in ways that we
never would have imagined in the recent past,”
said Steve Jastrow, strategic consulting manager at
JASTROW
GE Capital Fleet Services. GE Capital Fleet
Services
■ Cloud Computing will
Accelerate Fleet Decision-Making
“The trend toward cloud
computing will enable
fleet solution providers
to offer higher degrees
of data and system integration. These new technology capabilities will CANDELORO
ARI
result in highly customizable solutions for fleet managers. Additionally, increased data download speeds
and better mobile devices and tablets will
provide for more mobile-enriched opportunities that can be used by fleet managers and drivers to do more remote processing of fleet-related transactions and
data-driven decision making,” said Tony
Candeloro, vice president of product development at ARI.
■ Faster Interaction with Drivers
“Cloud-based systems will allow FMCs,
fleet managers, and drivers to communicate instantaneously, with live face-to-face
❱ Telematics is Part of a Larger Trend to the Connected Vehicle
“There will be three big changes to fleet management. Those changes are all about data, data, and
more data. This goes beyond just telematics data and is all about the connected vehicle. We envision a
point where vehicles are talking to one another to give real-time updates on traffic patterns allowing for
new and real-time routing change that impact productivity, or road conditions alerting drivers of slick
or icy roads to slow down, resulting in fewer incidents. We also envision the vehicle auto scheduling repairs with local facilities as diagnostic codes are triggered or navigate drivers to the lowest cost for fuel,”
said Steve Jastrow, strategic consulting manager at GE Capital Fleet Services.
❱ Fleet Productivity will Revolve Around Telematics
“Fleet productivity tools are evolving at a rapid pace due to the adoption of
telematics across many commercial fleets. Through telematics, customers are able
to track their vehicles’ locations and ensure they are being properly utilized on the
road. With a few clicks of the mouse, fleet managers can determine if their vehicles
are taking the most efficient service calls, if their drivers are taking the most efficient
routes, and if there is any overlap or duplication of efforts amongst drivers. Landmarking customer locations can provide real-time insight into the behavior patterns
SLOAN
of drivers, allowing companies to determine if under-visiting client sites impacts the
Donlen
revenue generated by the fleet. In addition, loading jobs into the telematics systems
allows managers to determine if scheduled driver stops are being made and if they take the appropriate length of time. By utilizing telematics, customers not only ensure their drivers are safe on the road,
but that they are maximizing their productivity and efficiency as well into the future,” said Tom Sloan,
manager, telematics products at Donlen.
❱ Trends that will Make Fleet Telematics More Mainstream
“There are two distinct trends that will lead to telematics becoming more accepted and used by the
mainstream. First, there will be an improvement in the standardization of data collected between telematics providers and their devices, as well as between and among vehicle types. Second, manufacturers will
begin to offer telematics solutions that better serve full-fleet compatibility. As these two trends occur,
fleet managers will become more comfortable implementing telematics solutions and turning this technology into a true productivity tool,” said Tony Candeloro, vice president of product development at ARI.
❱ OEM-Based Telematics
“We will have fully connected vehicles — telematics data will come directly from the OEM and aftermarket hardware will become extinct,” said Diana Holland, executive director of fleet management &
sales support for Merchants Fleet Management.
Similarly, other subject-matter experts foresee OEMs implementing telematics as factory-installed
equipment.
“Today, we have a lot of third-party players out there for telematics, collision avoidance, and driver
behavior monitoring, and the OEMs are working these into standard offerings. In the short term, you will
see the vehicle become much more of a fully rounded out option, meaning all of these options will become standardized within the vehicle and allow for more consistent data. This data will be used to do a
more robust driver scorecard and allow for better gamification,” said Jastrow of GE Capital Fleet Services.
❱ All Fleet Vehicles to Have Onboard Telematics by 2025
“By 2020-2025, telematics will be installed in all fleet vehicles, producing significant data for analytics to improve driver routes, driver downtime, and any inefficiencies in the operation of the fleet,” said
Becky Langmandel, director, strategic modeling & analytics for LeasePlan USA.
❱ Autonomous Vehicles will Make Telematics Standard Equipment
“With driverless vehicles, telematics will be essential. Software will eventually be able to analyze
each vehicle’s location throughout the day, and recommend fueling stations with the best prices. We
may even see a shift in the appearance of gas stations, including having compressed natural gas (CNG)
and charging stations for electric vehicles readily available,” said Ryan Gilbert, software developer at
Element Fleet Management.
january 2015 I automotive fleet
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SPECIAL REPORT: productivity
online interactions becoming the norm,” said James
Semsey, vice president of
information technology
at LeasePlan USA.
■ Touchless Fleet
Management will
Proliferate
SEMSEY
LeasePlan USA
“Cloud and mobile solutions will mostly impact
fleet managers by making
their experience as touchless as possible. The selfserve tools will be much
GILBERT
more powerful, meaning
Element Fleet
Management
fleet managers will be able
to do most of their work through Web
tools. Mobile solutions will allow them
to manage their fleet on the go, from a
smartphone or tablet, with the same capabilities as when they are at their desk.
The cloud is also relevant to vehicle interaction by being able to track the location and status of vehicles in real-time,
communicate with drivers directly in
the vehicle, and track fleet-wide metrics
relative to the performance and productivity of the fleet as a whole,” said Ryan
Gilbert, software developer at Element
Fleet Management.
■ Explosion of Driver Apps
“There will be increased
usage of smartphones
and tablets for fleet managers to complete work
on the road. Also, with
driver productivity/accountability becoming
PURSELL
Donlen
more important, driver
mobile apps will be one significant way
to accomplish this goal. Simple, easy-touse mobile apps will be a critical need for
all fleets,” said Jeff Pursell, vice president,
FleetWeb products at Donlen.
■ Technology to Create an
Uptick in Violations for Revenue
Generation
“As municipalities and local governments continue to see shrinking revenues, we will see more widespread use of
technology to generate revenue from vi18
automotive fleet I january 2015
olations (‘smart’ parking
meters, camera violations,
more electronic toll authorities, etc.). What we
see in major metro areas
will be adopted in smaller cities and towns,” said
HOLLAND
Fleet
Diana Holland, executive Merchants
Management
director of fleet management & sales support at Merchants Fleet
Management.
■ Technology will Interact More
with us, versus us Interacting
with It
“We are moving from
a world where we interact with technology to a
world where the technology (environment) interacts with us. For example,
the Nest thermostat learns GE PETERS
Capital Fleet
Services
our behaviors and reacts
accordingly, as opposed to having us program our thermostats. It will be the same
with our vehicles — vehicles will learn
our patterns/schedules and support our
activities related to our day-to-day transportation needs,” said Doug Peters, analytics leader at GE Capital Fleet Services.
■ Proactive Vehicle Communication
to Become the New Fleet Norm
“Companies will continue to embrace
the use of technology in their fleet vehicles to reduce fleet costs as well as drive
employee productivity. Increasingly, vehicles are able to proactively communicate information, letting the driver know
when a vehicle requires servicing or when
a maintenance issue exists,” said Amy
Blaine, vice president, consulting, analytics, and sustainability at Donlen.
■ Digital Wallets will Supplant
Fuel Cards
“Digital wallets, enabled through mobile technologies (phones or wearables),
will supplant fuel cards as the payment
mechanism,” said Rozmiarek of Wheels.
■ Gamification will be a Key Tool
in Driver Behavior Modification
“Gamification will become a key to
controlling driver behavior, allowing for
competition among drivers and rewards
for good driver behavior in regards to
safety, productivity, and vehicle maintenance,” said Semsey of LeasePlan USA.
■ Data Analytics to Have a Huge
Impact in Developing Actionable
Fleet Events
“Of all the new innovations that will
hit the fleet market in the next five to 10
years, data analytics will have the biggest impact. The ability to create and use
tools that will turn raw data into actionable events will significantly impact fleet
managers. These next-generation productivity tools will aggregate and correlate massive amounts of data and turn
these data points into a series of recommendations, best practices, and predictable outcomes,” said Candeloro of ARI.
■ The Rise of Online Tools to
Analyze Real-Time ‘What-If’
Scenarios
“The rise of integrated, advanced data
analytics will change the way fleets are
managed. The data coming from the vehicle
itself, combined with maintenance data
and general data on that model, will allow
fleets to target replacement on a vehicleby-vehicle basis rather than a generalized
replacement date. Fleets will have online
tools to do real-time ‘what-if ’ scenarios
in selecting vehicles that forecast how a
given model will perform over multiple
years across a range of variables from fuel
economy to maintenance to safety,” said
Rozmiarek of Wheels.
■ Vehicles Become True
Mobile Offices
“Vehicles are already becoming more
of a mobile office with WiFi-enabled capabilities, and we envision this trend to
continue and become a standard offering,”
said Jastrow of GE Capital Fleet Services.
■ More Prevalent Driver Behavior
Management Tools
“The use of driver behavior management tools will become more prevalent.
Driver scorecards that measure, track,
and drive better decision making around
SPECIAL REPORT: productivity
driver behavior and how these behaviors
impact safety, productivity, and cost containment will become more commonplace,” said Candeloro of ARI.
■ Visual Analytics to Compete
with Traditional Analytical Tools
“The tools will become more analytical and visual as well. Traditional analysis
tools, such as Microsoft Excel and Access,
will be used; however, these other visual
tools will start becoming more standard
in our analysis,” said Jastrow of GE Capital Fleet Services.
■ New Fleet Management
Capabilities Resulting from
Connected Vehicles
“The majority of OEMs will include cellular connectivity for many all-new models in the next 10 years. This will drive a
number of services, such as the ability of
vehicles to alert a driver and maintenance
advisor with specific information if it is
having a problem. In addition, there will
be the ability to send information to the
vehicle. This could include targeted traffic alerts, or something like a change in
itinerary for the driver,” said Rozmiarek
of Wheels.
■ Enhanced Smartphone Apps
to Manage Fleet Vehicles
“Some additional technology improvements
will include instructing vehicles to find
a parking spot and pick you up at the
entrance of the building when you are
leaving, and smarter in-vehicle climate
control and entertainment systems.
It’s likely that we’ll see people building
smartphone apps designed exclusively for
use with vehicles,” said Gilbert of Element
Fleet Management.
■ Maintenance Becomes
Outbound
“Maintenance reminders will guide the
driver through scheduling maintenance
and the integration of vehicle and mobile
devices will provide that data (with the
driver’s permission) to the maintenance
shop,” said Rozmiarek of Wheels.
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automotive fleet I january 2015
The Future of Autonomous Fleet Vehicles
M
ost subject-matter experts believe autonomous vehicles will be introduced by OEMs and corporations will incorporate them in their fleet operations. Below are several perspectives on the impact of
autonomous vehicles in fleet operations:
❱ Connected Cars are a Stepping Stone to Autonomous Vehicles
“The connected car is just a stepping stone to the autonomous vehicle. What we learn and build
in the next five to 10 years will set the stage for autonomous infrastructure. My prediction is we will
start seeing a significant increase in autonomous vehicles by 2025 with most vehicles fully autonomous by 2030,” said Doug Peters, analytics leader at GE Capital Fleet Services.
❱ Incremental Advancement to Autonomous Vehicles
“Manufacturers are already working on developing the autonomous car. While the ultimate vision
is years away, the technology will be released incrementally over time. Today, we already see this technology being used in adaptive cruise control, which enables a vehicle to adjust the speed to allow a
safe following distance. Connected cars will be able to communicate with one another, sharing information that can improve safety by alerting the driver to take action or taking control of certain situations automatically. Information that is available to the vehicle can also be made available to the
fleet manager. The amount of information being captured is increasing exponentially; however, fleet
managers will need tools that can help them derive meaning and take action based on that data,”
said Amy Blaine, vice president, consulting, analytics, and sustainability at Donlen.
❱ Autonomous Vehicles will be Safer than Conventional Vehicles
“Autonomous driving may become a reality for the most safety-forward fleets,” said Diana Holland,
executive director of fleet management & sales support at Merchants Fleet Management.
❱ Autonomous Vehicles Will be Viewed by Management as Productivity Tools
“We already have the makings of autonomous vehicles in production vehicles today (lane assist,
parking assist, adaptive cruise control, etc.) and are basing our prediction on the chatter around autonomous cars becoming available sometime between 2018 and 2025. While we do not expect to
see an immediate adoption of these vehicles in fleet due to the initial high purchase price, we believe that, eventually, the ramifications of autonomous vehicles could be significant. As autonomous
vehicles gain traction, drivers will become more productive. Once focused on keeping their eyes on
the road, now drivers will be able to conduct business from their vehicle on their way to an appointment. The adoption of autonomous vehicles will also improve fuel efficiency and reduce accident
rates,” said Ryan Gilbert, software developer at Element Fleet Management.
❱ New Vehicles to Include Autonomous Features to Improve Safety
“While there will be some fully autonomous vehicles on the road in the next five to 10 years,
nearly all new vehicles will have some form of automation to improve driver safety. This will include
more sophisticated collision avoidance systems that automatically brake or slow the vehicle and
keep safe distances from vehicles ahead and behind under cruise control. These features will be
supported by an increase in vehicle-to-vehicle communication where one vehicle can ‘warn’ another about potential safety problems. Telematics-driven or usage-based insurance validated by data
directly from the vehicle will be the norm,” said Jerry Rozmiarek, assistant vice president – information technology at Wheels Inc.
❱ Autonomous Vehicles will be Easier to Maintain and Service
“Software will also be able to direct vehicles to maintenance shops, and automatically send a
driverless vehicle to be serviced,” said Gilbert of Element Fleet Management.
SPECIAL REPORT
18 Factors that will
Transform Fleet
Vehicle Maintenance
Most agree that many of the trends we are experiencing today will continue for
the next decade; however, technology, in particular vehicle connectivity, will have
a dramatic impact on how vehicles will be maintained in the future. By Mike Antich
I
n the next 10 to 15 years, fleet maintenance will be increasingly influenced by
vehicle complexity, the growing suite of
vehicle connectivity tools, and a sophisticated array of safety options that, in many
cases, are the stepping stones to ultimately introducing autonomous vehicles. Interviewed subject-matter experts foresee fleet
maintenance increasingly being governed
by predictive analytics, which will trans-
at a glance
Changes in vehicle maintenance trends
in the future will be mainly impacted by:
Sophisticated vehicle connectivity.
Increased vehicle complexity, which
will result in increased vehicle
downtime.
Longer PM intervals due to use of
synthetic oils.
Improved vehicle maintenance
analytics.
Continued parts shortages.
Ongoing technician shortages and
resulting higher labor rates.
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automotive fleet I january 2015
form maintenance practices to be more
proactive instead of reactive.
Here are the top trends identified by
industry subject-matter experts that will
impact fleet maintenance in the next 10
to 15 years:
1 More Sophisticated Vehicle
Connectivity
“As vehicles get ‘smarter,’ maintenance and repair diagnostics will be
sent directly from the vehicle and, based on the diagnostic results, the vehiBLEZIEN
cle’s interface screen will LeasePlan USA
route the driver to the appropriate shop,”
said Tony Blezien, vice president, operations at LeasePlan USA.
2 More Dealer-Based Repairs
“In five to 10 years, we’ll be seeing more
dealer-based repairs of fleet vehicles. Many
non-dealer shops will only provide preventive maintenance services, due to more
sophisticated technology. We anticipate
the service process to become more complex and
specialized, resulting in
more reliance on dealerships,” said Joy Schnetzka, manager, strategic alliances at Element Fleet
Management.
3
SCHNETZKA
Element Fleet
Management
Vehicle Complexity to
Increase Downtime
“Manufacturers have
improved the quality of
vehicles in many ways, but
we have definitely seen an
increase in downtime related to complex, lengthy
repair diagnosis on some
WHITESIDE
vehicles. As manufacturWheels Inc.
ers race to implement new
technology that improves safety and fuel
economy, isolated delays due to complex
failure diagnosis will increase,” said Jeff
Whiteside, director, maintenance assistance program (MAP) and collision at
Wheels Inc.
SPECIAL REPORT: maintenance
4
7
Maintenance Data
Management
Use of Big Data to Support
Predictive Analysis
“Similar to many other areas, when it
comes to maintenance, managing technology, information, and data will be our
biggest challenge in the future. Each and
every day our customers ask for more, expect more, and deserve more. We continue to see incredible growth in the amount
of vehicle data and information, and the
challenge going forward will be how we
manage all the information and turn it into useful analytics that result
in best-in-class recommendations,” said Charlie Guthro, vice president
of North American fleet
GUTHRO
ARI
management at ARI.
“At ARI, we are working with increasingly complex fleets that need to manage
Big Data to support predictive analysis,
downtime management, driver safety,
productivity, and total cost of ownership.
New technology means better communication, including equipment that ‘talks
back to us,’ providing mechanical self diagnosis, increased driver behavior data,
and driver support systems, among other things,” said Guthro of ARI. “In a nutshell, the ability to access and manage the
Big Data that fleets now return will allow
fleets to ‘build right, buy right, and maintain right’ — better than ever before —
leading to the best alternatives with regard to total cost of ownership.”
5
8
Predictive Maintenance &
Analysis
Changing Preventive
Maintenance Parameters
“Our ability to sort mechanical condition data in real time affords us opportunities to provide predictive analysis like
we have never seen before. Our ability
to manage large amounts of data creates
the opportunity to predict component
failure, provide real-time transactional repair cost intervention, provide bestin-class maintenance policies and procedures, and identify and provide economic
equipment specifications and procurement,” said Guthro of ARI.
“We are already seeing advancements
in maintenance where we now schedule
preventive maintenance based on fuel
burn and appropriate utilization supported by telematics, rather than just time
and miles. This trend will continue,” said
Guthro of ARI.
6
Expansion of Preventive
Maintenance Reminders
“There will be an increase in onboard
reminders for preventive maintenance
beyond traditional oil changes and tire
pressure. Sensors in filters and fluids
and other maintenance items will trigger
dashboard reminders to alert the driver
of due or overdue maintenance. This growing
technology should help
reduce related component failures and roadside breakdowns,” said
Eric Strom, maintenance
& safety product manSTROM
GE Capital Fleet
ager at GE Capital Fleet
Services
Services.
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automotive fleet I january 2015
9 Longer PM Intervals
“Over the past few years, we’ve seen
maintenance intervals lengthen, largely through the use of synthetic oils. The
extended intervals make it critically important for drivers to monitor oil levels as
all engines consume some amount of oil,
and, over time, an engine failure can occur from low oil levels. Over the past few
years, we have seen an increase in these
failures and I expect this trend to continue until oil level sensors warning drivers
of low oil levels are standard equipment,”
said Whiteside of Wheels.
10 Greater Tool Standardization
“The continuing move by OEMs to develop global vehicle platforms will help reduce the need for unique tools required
by automotive technicians. A single tool
will be able to function across multiple
vehicle models. This will help control repair providers’ tool costs and simplify the
A Tire Revolution
T
he following are the two key trends that
will influence the types of tires fleet vehicles will use in the coming decade:
❱ Run-Flat Tires will Become More
Prevalent in Fleet
“We expect there will be more original
equipment run-flat tires as the OEMs continue to seek vehicle weight reductions by
eliminating spare tires. There will be greater consumer and fleet acceptance of runflat tires as manufacturing improvements
will enable less road noise, a less rigid
ride, and longer tread wear life. An extra
bonus is that the trunk will have more
capacity,” said Eric Strom, maintenance
& safety product manager at GE Capital
Fleet Services.
Others also see a proliferation in the
use of run-flat tires by fleet operations.
“Recent technology advancements to
maintain vehicle mobility when a tire is
punctured show promise to be standard
in vehicles. Today, there are three technologies to help maintain vehicle operation when a tire is punctured. They are
self-sealing tires, self-supporting tires,
and tires supported by an auxiliary system. I think it is entirely possible one or
all of these technologies become a standard offering on new cars in the future,”
said Jeff Whiteside, director, maintenance
assistance program (MAP) and collision
at Wheels Inc.
❱ Tires will Become ‘Smarter’
“Goodyear has recently developed new
technology for truck tires that monitors tire
pressure and will automatically inflate the
tires to maintain ideal performance. One
of the single biggest causes for premature tire wear is under inflation. This technology has the ability to significantly extend tire life and reduce replacement cost
for fleets. We’ll see this predominately in
the trucking industry, due to the cost of
tires, but may see this in some automobiles also,” said Whiteside.
SPECIAL REPORT: maintenance
tool selection process,” said Strom of GE
Capital Fleet Services.
11 Improved Communication
with Drivers
“More automation and interactions with
vendors will provide improved communications for drivers (such as text messaging
repair status updates and apps to schedule service appointments, and communicate local pricing promotions) as well as
improved data for FMCs to monitor and
rate a shop’s performance,” said Whiteside.
12 Lightweighting of Parts
“We will see more parts being made from
carbon fiber and composite plastics. This
will reduce the weight, which improves
fuel economy, but will also be more expen-
sive to replace,” said Whiteside of Wheels.
13
Diesel Engines Become
Mainstream
“The growth of automobile diesel engines will help the OEMs achieve the government fuel economy goals. Customers
will be more accepting of diesel engines
and past complaints of smelly exhaust
and noisy engines will be reduced with
improved emissions and quieter engines.
The automobile diesel engine evolution in
the U.S. will require some repair facilities
to recruit diesel engine technicians while
the auto/truck industry is facing a shortage of trained technicians,” said Strom.
14 Ongoing Parts Shortages
“We will continue to see isolated cas-
es of part shortages due to manufacturer redesigns and manufacturing plant issues,” said Whiteside.
15
Ongoing Technician
Shortage
“Enrollments in auto and truck trade
schools have also been slowly declining.
I believe this trend will continue, which
could cause a slight shortage of technicians in future years,” said Whiteside.
16 Higher Labor Rates
“The complexity of new technology will
cause higher demand for highly skilled
technicians. The impact of this will be labor rates increasing at a rate higher than
normal inflation as well as some increased
repair downtime,” said Whiteside.
Migration of the ‘Internet for Everything’ to Fleet Management
By Mike Antich
T
he “Internet for Everything” promoted by Cisco and the “Industrial Internet,”
as advocated by GE, refers to the integration of a variety of complex pieces
of machinery, such as planes, locomotives, and vehicle fleets, with networked
sensors and software. This involves creating network capabilities to provide “information flows” across enterprise domains using devices that communicate
with other devices remotely.
The Industrial Internet or Internet for Everything, as opposed to the
consumer Internet, draws fields such as machine learning, Big Data, the
Internet, and machine-to-machine communications, to collect data from
machines, analyze it in real time, and use it to adjust operations.
photo: ©istockphoto.com/PonyWang
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automotive fleet I january 2015
It is believed this convergence of machine connectivity remotely generating actionable data will change the way we work, ushering in a new
era of innovation and change. From a fleet perspective, GE contemplates
what can be learned from data being generated by the millions of vehicles on the road today, such as data on the driver, the route, and the vehicle itself. There will be such a tremendous amount of data that can be
digested, assimilated, and aggregated that it’s going to be able to help
companies, not just fleet managers, run their fleets as a work tool much
more efficiently and change the way they do business.
The Industrial Internet is envisioned to encompass transportation
fleets, which are critical links in the supply and distribution chain associated with manufacturing and energy production. The Industrial Internet will help optimize the timing and the flow of goods. There are further opportunities for optimizing operations and assets by eliminating
waste, while improving driver productivity, service levels, and safety.
Likewise, wireless technology company Qualcomm has various
global initiatives for an “Internet for Everything” strategy employing
wired and wireless technologies. Similarly, Phillips is offering datagathering connectivity in both its health care and lighting products.
Anticipating these changes, the European Commission, the executive
body of the European Union responsible for proposing legislation,
is using its CORDIS interactive information portal to develop future
governance based on the emerging “Internet for Everything” economy.
By 2020, GE estimates the Industrial Internet, through better management of processes and industrial systems, will yield $1.279 trillion
in value. If the Industrial Internet achieves just a 1-percent efficiency
improvement, then the results could be substantial.
SPECIAL REPORT
Future Trends in
New-Vehicle Selection
& Purchasing
Government-mandated CAFE standards are exerting pressure on OEMs to develop
smaller, more lightweight models and add more alt-fuel vehicles and hybrids to
their lineups. Lower fuel costs will shift TCO focus to depreciation. By Mike Antich
T
he No.1 factor impacting new-vehicle
ordering in the next 10 to 15 years
are the upcoming governmentmandated CAFE requirements.
This mandate will drive OEMs to provide
more efficient vehicles with smaller engines,
built of lightweight materials.
The second factor is the booming domestic oil industry, which is likely to continue to drive demand for large trucks across
the country.
In the longer-term, as companies continue
to look for ways to cut fleet expenses, the
forecast is a shift away from driver-dedicated
fleet vehicles to car sharing or comparable
type services.
Below are predictions from industry
subject-matter experts on key trends that will
impact new-vehicle ordering and selection
in the next 10 to 15 years:
Forecast on Fuel Prices
“The downward pressure on fuel costs is,
of course, a relatively recent phenomenon
— as measured in months, not years, so
changing the TCO calculation at this time
or anytime soon seems premature. While
indeed, as shale/oil sands production
30
automotive fleet I january 2015
continues to increase,
it seems unlikely that
prices will significantly
contract to a point where
adjusting TCO would be
justified. There are other
major factors, too, such as
GHOSH
ARI
the up-front acquisition
costs, and other maintenance costs that
probably would offset any decrease in
fuel-cost component. At times, when fuel
costs decrease, there is a less compelling
reason to acquire fuel-efficient vehicles,
so, at the end of the day, fuel economy
is the key factor, not specifically the
fuel cost itself. And, of course, fuel cost
doesn’t just reflect the cost of oil; there
are other factors that affect fuel costs,
such as distribution costs (e.g., pipeline
vs. rail), as well as taxes, which could gain
momentum given concerns about the need
to rebuild/fix infrastructure. It’s important
to consider the sustaining likelihood of
recent trends, whether ‘good’ or ‘bad’, and
determine the appropriate time to modify
important measures such as TCO,” said
Partha Ghosh, director, vehicle supply
chain – North America at ARI.
Shift Away from Driver-Dedicated
Vehicles
“As companies continue to look for ways to
cut fleet expenses, expect
to see a shift away from
driver-dedicated fleet vehicles and a shift toward
car sharing. GenerationKELLY
al changes in the work- LeasePlan USA
force will also affect the
type of vehicles selected, with a greater
number of alternative-fuel and possibly
even self-driving vehicles being chosen
for fleets,” said Elizabeth Kelly, director of operations, vehicle acquisition at
LeasePlan USA.
Virtual Reality Tools Used to
Make New-Vehicle Selections
“There will be an uptick in the adoption
of virtual reality for new-vehicle selection
and purchasing. This will allow fleet
managers to browse and test-drive new
vehicles from the comfort of their office
using their computer,” said Ryan Gilbert,
software developer for Element Fleet
Management.
SPECIAL REPORT: selection & purchasing
Out-of-Stock Purchases
“If demand outpaces supply (by proxy, capacity), it is clear that buying out-of-stock
will be harder. This year is a good indication, as the auto industry appears to be on
pace for a record year for annual unit sales,
or at least consistent with pre-recession levels. The strong retail market is challenging
the availability of certain models and options on the fleet side, and there are no evident signs that the industry is rushing to
build new plants or dramatically increase
capacity, and probably won’t until there is
clear evidence that the demand increase is
sustainable. The market should react as it
normally would, which means that, as confidence in the economy continues to build,
the industry will increase capacity over time
to better meet the growing demand if it remains strong. The auto industry is global,
so manufacturers generally look at the issue
across a broader scale. As OEMs increasingly build global platforms, they may be able
to supply the market in ways they had not
been able to do so previously. In the short
term (over the next few years or more),
stock purchases will likely be challenged,
as long as the economy builds on its recent
momentum. The takeaway message is that
clients should take these factors into consideration and plan for potentially longer
10-Year Forecast
By Dan Hannan, executive director strategic consulting at Merchants Fleet Management
By 2025, CAFE fuel economy standards will help drive fuel economy beyond
50 mpg for cars and light trucks, more than doubling 2014’s efficiency average. The
sharp decrease in fuel costs will return the focus on managing vehicle depreciation.
● An improved natural gas retail infrastructure across the United States by 2020
will overcome today’s regional application, creating more demand for
alternative-fuel vehicles.
● A typical fleet’s vehicle count will decrease by 20 percent, driven by
general business technology efficiencies in its core business.
HANNAN
● Continued new-vehicle production levels of 20 million units per year will
Merchants Fleet
create a large supply of used vehicles, softening the resale market and creating
Management
a larger focus on closed-end leases.
● Continued focus on synthetic tire and oil utilization along with new-vehicle component and
technology improvements will double the time between maintenance intervals.
● Real-time vehicle data, along with customer enterprise resource planning (ERP) integration
with their fleet management supplier, will be standard for all customers.
● As vehicles become more fuel efficient, revenue generated from fuel taxes will drop, causing states
and municipalities to introduce higher registration fees, specifically commercial fleet usage fees and
emissions taxes.
●
lead times for both stock and factory orders and/or greater flexibility with specific models and/or features in order to minimize the impact on their business,” said
Ghosh of ARI.
Lightweighting May Cause an
Increase in Accident Costs
“The use of lighter materials in the
construction of vehicles, as well as upfit bodies and components, will continue to improve fuel efficiency and manage overall vehicle capitalized cost, but
the use of the lighter materials may increase the per incident accident repair
cost,” said Tom Coffey, vice president
sales and marketing at Merchants Fleet
Management.
Future Outlook for New-Vehicle Selection & Purchasing
By Timothy Cengel, supervisor, pricing & communications, vehicle operations – acquisitions at Wheels Inc.
T
he short-term trend of declining fuel prices coupled with more fuel-efficient
engines will make the expense of fuel less of a factor in vehicle lifecycle
costs. According to industry experts, fuel prices will continue to decline or flatten out in the next few years; however, consumers should keep in mind that fuel
prices are volatile.
Just as fuel prices decline, CAFE requirements continue to drive the OEMs
to provide more fuel-efficient vehicles. They have introduced technologies such
as smaller displacement engines, more efficient transmissions and lightweight
materials.
These changes have several effects on vehicle selection and ordering.
For example:
● Hybrid and diesel vehicles are attractive to consumers with green
initiatives, but those same vehicles become less desirable as fuel economy
on standard gasoline engines increases.
● Customers are being forced to move from cargo vans to all-new
European style unibody vans.
● And, recently, there have been frequent changes on pick-up trucks, such as the introduction of smaller engines, additional gears and aluminum
bodies.
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automotive fleet I january 2015
Increased Driver Assistance and Safety
Technologies
Lower trim level models will have more options such
as crash avoidance, lane departure warning, cross traffic alerts, and adaptive cruise control. As these technologies become less expensive to develop and manufacture, they will move down in trim levels and eventually
become standard equipment. We are already seeing
CENGEL
Wheels Inc.
backup cameras and sensors become available as standard equipment. These driver assistance technologies are just the beginning,
and will eventually lead to fully autonomous vehicles.
New-Vehicle Purchasing Outlook for 2025-MY
It’s difficult to predict what 10-15 years will bring for the automotive industry. Much of the outlook depends on the effects of government regulations. We
expect that current CAFE standards will lead to more electric, hydrogen, and
natural gas vehicles. As infrastructure is developed, these technologies will become adopted in fleets. Eventually, autonomous vehicles will become more
readily available and their success within the fleet industry will depend on the
creation of regulations and insurance laws.
SPECIAL REPORT
Two Perspectives on
the Future of Fleet
Taxation
Taxes are almost guaranteed to increase, but their impact will vary due to different tax regulations varying by state. An emerging concern is the taxation of
online services, the cost of which would be passed on to end-users. By Mike Antich
T
he key concerns about the future of
fleet taxation revolve around inconsistency of vehicle taxation due to
varying state tax regulations.
In addition, most tax regulations were
codified prior to the development of the
Internet. Many taxing authorities view the
opportunity to tax online services as a new
revenue channel to offset budgetary shortfalls.
These services are currently untaxed, but
there have been repeated efforts to tax
consumer-based online services, which can
easily be extrapolated to include fleet-related
online services.
at a glance
Factors impacting the taxation of fleets
include, but are not limited to:
Stronger pressure to increase tax
revenues, resulting in the potential
taxation of services.
Leasing company expansion into
other countries, creating transfer
pricing challenges for intercompany
transactions.
States need to update outdated tax
laws to account for changing online
product/service environment.
●
●
●
34
automotive fleet I january 2015
Two subject-matter experts on fleet taxation provide their perspective on future
trends. Here are their forecasts:
Strong Pressure to
Increase Tax Revenues
By Thomas Tallarito, director of tax and
accounting operations at Donlen
“In this world, nothing can be said to
be certain except death and taxes,” so said
Ben Franklin. That being said, taxes may
be certain, but they certainly aren’t consistent. I see a continuation of the difference
in taxing vehicles between states. Some will
tax the lease stream and some will tax the
purchase of the vehicle for lease up front,
while others will continue the hybrid treatment of taxing multiple payments up front.
There may be a move in more than one
state, similar to what Georgia did in 2013
with the Title and Ad Valorem Tax (TAVT), to combine personal property tax
with the sales tax or go to
hybrid or up front, where
states will get more tax on
the front end. As for a retallarito
Donlen
duction of taxes on the in-
dustry, I don’t see that happening since the
states will continue to need more revenue
from taxes to provide services.
Speaking of services, this is the area
where taxing authorities will be looking
for an increase in revenue since most states
don’t tax most services. Taxing of services can bring about an increased cost to
the lessee for many services fleet leasing
companies currently provide. Currently,
services really aren’t taxed unless they are
specifically stated as taxable services in
the laws of each state. This differs from
tax on tangible property (things you can
physically touch) where all is taxable unless specifically exempted.
With the increased flexibility afforded
due to technology, we could see a move
to a more fluid handling of tax on leases
to allow for different handling based on
specific client needs. For example, if a client plans on leasing a vehicle for a period of time that’s barely more than a year,
it would prefer to pay tax on the stream.
However, if the plan is to lease the vehicle
for five to 10 years or more, then an upfront payment of tax would most likely be
more beneficial.
Some of the fleet leasing companies
may need to adjust their systems and tax
software slightly to handle the flexibility;
however, it would certainly be worth the
effort to some customers. Of course,
for any of this to happen, states would
have to allow this alternative handling,
which may not be in their best interests.
Currently, there are few states that allow
this flexibility in handling, once a method
was chosen. The state of Illinois recently
moved to change its handling of tax on
certain types of leases on certain types of
vehicles from up front on the purchase
price to up front on the lease payments,
which will certainly reduce the amount of
tax paid on many leases. The individual
consumer will see this change effective
Jan. 1, 2015, when the due at signing
amount is considerably less than they
are used to paying. The thought process
is that consumers will turn over leases
more often because they are not paying
as much up front. It remains to be seen
whether that will actually happen. If it
does, what will the effect be on newvehicle production and prices, as well
as used-vehicle prices?
Fleet Taxation Trends
By Ron Ditzel, tax manager at Element Fleet
Management
Transfer Pricing: Leasing companies
continue to expand their reach into other
countries and many have more than one
entity within their organization structure,
both of which can create transfer pricing
challenges if there are intercompany transactions.
Both the U.S. and Canada have been increasing
their focus on transfer
pricing and will continue
to do so. Their focus has
ditzel
been not only on crossElement Fleet
Management
border transactions, but
also transactions within each country’s
borders. Transfer pricing documentation is the main line of defense in an audit
and must demonstrate compliance with
regulatory requirements for appropriate
methodologies. It is important for companies to be familiar with each country’s
requirements and stay abreast of changes as transfer pricing continues to evolve.
Services and the Cloud: Leasing companies continue to offer more online services/products to their customers and
more states are beginning to apply current tax laws to these types of online services/products. One issue is that states are
continually relying on outdated tax laws
to include these online services/products
as taxable without consideration of the
nuances of what is actually being provided. Looking ahead, states will need
to update their tax laws to account for
the changing environment of how services/products are provided online.
january 2015 I automotive fleet
35
SPECIAL REPORT
15 Trends that will
Impact Fleet License
& Title Services
The industry consensus is that fleet license & title services will become more
expensive in future years as vehicle registrations are blocked for unpaid tolls
& violations. Transaction fees will increase to offset DMV budget shortages.
By Mike Antich
I
n the next 10 to 15 years, vehicle registrations will increasingly be used by
states to leverage the collection of unpaid tolls, traffic violations, and personal property taxes.
As more DMV services migrate online,
there will be increased challenges to obtain
licensing information while safeguarding
individual privacy and authorization verification to comply with security protections
at a glance
The increase in license & title services
in future years will be in part due to:
Increase in required DMV documentation
and securities and authorization verification.
Additional privacy safeguards.
Enhanced enforcement of toll and
traffic violations with more states
blocking vehicle registration due to
unpaid fees.
Increased DMV turnaround time
and fees.
●
●
●
●
36
automotive fleet I january 2015
as specified by the Patriot Act.
Here are the top trends identified by
subject-matter experts that will impact
fleet license & title services in the next 10
to 15 years:
1 Increase in Required DMV
Documentation
“In response to growing
concerns around fraudulent transactions, DMVs
are requesting additional documentation from
fleet companies and drivers. Depending on the
MUSIC
state, DMVs request var- GE Capital Fleet
Services
ious forms of address and
identity verification, including driver licenses, business cards, utility bills, and
leasing licenses. In an era of increased
security threats, government offices are
taking extensive precautions to protect
against falsified information. The past few
years have brought an influx of requests
from across the country, with additional jurisdictions likely to follow suit,” said
April Music, senior operations leader at
GE Capital Americas.
2 Increased Security
“There will be increased focus on security and authorization verification,” said
Brad Kacsh, director of licensing services at Donlen.
3 Increased Privacy Safeguards
“There will be more
stringent regulations
around release of vehicle licensing information.
The Patriot Act presents
new challenges in obtaining licensing informaHESS
ARI
tion, which means FMCs
could become more reliant on customers
to gather vehicle information,” said Melissa Hess, director, licensing & compliance at ARI.
SPECIAL REPORT: license & title
4
More States Blocking
Registration
“It is becoming more and more common for states to block registrations for
unpaid tolls and violations, as well as unpaid personal property taxes. With continued enhancements in data sharing and
the importance of additional revenues,
states and jurisdictions will continue to
gain more leverage in the collection of
fines, fees, and taxes,” said Hess of ARI.
Other subject-matter experts similarly
see increased use of registration renewal blocks.
“There will be increased
registration renewal blocks
or registration suspension
due to unpaid violations,
particularly tolls,” said
KACSH
Kacsh of Donlen.
Donlen
5
Enhanced Enforcement of
Tolls and Traffic Violations
“We expect that recent trends in toll
and violation enforcement will continue. We are seeing stiffer fines that escalate much more quickly. We are also
seeing increases in registration renewal blocks, booting, and more extreme
enforcement, such as the impounding
and banning of vehicles on toll roads
until outstanding fines are resolved. We
would also expect to see states share toll
and violation data more efficiently along
with legislation that will allow enforcement of unpaid tolls across state lines,”
said Hess of ARI.
6 Enhanced Red-Light Cameras
“In addition to the
current use for red light
and toll violations, cameras, and monitoring systems will track speeding, cell-phone use, and
other on-the-road violaCROOKS
tions,” said Eric Crooks, LeasePlan USA
director of operations, license and title
at LeasePlan USA.
7Toll Road Interoperability
“Toll road interoperability will continue to progress as more and more states
38
automotive fleet I january 2015
figure out ways to share data that allows
drivers to travel through several states
using only one transponder or tolling
account,” said Hess of ARI.
8
Increased DMV Turnaround
Times and Fees
“Transaction fees will continue to rise
as DMVs work to offset budget deficiencies. State shortfalls have decreased DMV
funding, a trend expected to continue in
the years ahead. Cutbacks result in compressed business hours, staffing shortages, office closures, longer lines and wait
time. While simpler processes, including registration renewals, have remained
generally unaffected, complex transactions require additional processing time.
Holidays and government furloughs add
to these delays, as DMV personnel work
through backlogs. Fleet management
companies are proactively adjusting internal processes to accommodate new
turnaround times with minimal impact
to the customer,” said Music of GE Capital Americas.
9
International Fuel Tax
Agreement (IFTA) & International Registration Plan (IRP)
“There will be an increase in electronic
mileage and driver reporting platforms.
Paper driver logs are quickly becoming
a thing of the past. We expect to continue to see clients convert to telematics solutions to manage both vehicle trip
reporting and driver hours-of-service,”
said Hess of ARI.
10
Increased Electronic
Transmittal of All DMV
Information
“As we look into the future of fleet,
we’ll see the electronic transmittal of
all information. This dramatic shift will
eliminate registration cards and stickers, speeding violations, and perhaps
even the physical tollbooth. This move
to electronic transmittal will most likely increase road taxes, and enable scanning of license plate for red-light violations or road infractions. It also means
the ability for agencies in various states
to easily communicate with one another.
“The electronic transmittal of information may happen through vehicle identification number (VIN), which
allows license plate information to be
stored in a vehicle device, which communicates to the DMV. This device will
also have a database of pertinent information such as vehicle owner address,
taxes paid, last inspection, oil change,
registration information, etc. This will
eliminate the need for drivers to have to
carry registration cards or stickers. The
driver will need to keep his or her information updated via the input device in
the vehicle. The DMV will know when
the registration expires and can either
notify the driver via a smartphone, allowing the driver to pay via credit card
or corporate account. This technology
will also allow law enforcement to scan a
license plate and know if a vehicle’s registration has expired. Electronic authorization of prerequisites will eliminate
the need for paper.
“This functionality will also automate
state-to-state transfers. By keeping information updated within the vehicle,
the driver will be prompted if a state-tostate transfer should occur. If the driver indicates that a transfer should take
place, all of the transferring of information and prerequisites would happen without driver involvement or long
waits at a DMV. If a VIN inspection or
some other physical check is needed, the
system within the vehicle would notify the driver, similar to the oil change
notification within cars today.
“Another area of evolution includes
traffic violations. The data within a vehicle’s telematics device will recognize
the posted speed limit on the road and
if necessary, issue the violation.
“Lastly, physical tollbooths will be a
relic of the past. Through
license plate information
alone, toll agencies will
be able to bill a personal credit card or corporate credit card without
needing a transponder or IWANOWSKI
Element Fleet
needing a driver to pay
Management
SPECIAL REPORT: license & title
cash,” said Kim Iwanowski, director – licensing and regulatory compliance at Element Fleet Management.
11
Expansion of Online
Services, DMV Kiosks & Mobile
Locations
“In an effort to combat overcrowding at DMV offices, states are turning
to technological solutions.Web-based
programs provide an online option for
registration and license renewals. Selfservice kiosks are another tool for reducing DMV wait time and congestion.
State-of-the-art kiosks examine driver
license photos using biometric technology for facial recognition, thereby
reducing fraud and identity theft. Mobile DMVs bridge the gap for communities impacted by office closures. Mobile offices provide relief
to main DMV branches,
cost savings, and convenience for customers
who otherwise would
travel for services,” said
Kathy Damson, state redamson
lations specialist for GE GE Capital Americas
Capital Americas.
12
All Vehicle Titling will be
Done Online
“With the growth of electric processing, all titles will be done online. Lien
releases, title amendments, and state
changes will be handled through an automated system in all 50 states. This will
help reduce fraud as well as the paper
trail that needs to be traced when a duplicate title is needed or the purchase
of a company has taken place. This will
reduce DMV expenses in the long run
and allow fleets to stay up-to-date on
their state changes in a
quicker and more efficient fashion. The purchase and remarketing
of vehicles will happen
much faster as well, which
will help reduce violaHORN
tion fees. As the tolling Merchants
Fleet
Management
authorities merge and
40
automotive fleet I january 2015
have interstate toll record keeping up
to date, this will assist in fighting disputed tolls,” said Cheryl Horn, director of fleet resources at Merchants Fleet
Management.
13
Goodbye License
Plate Decals
“We may see an elimination of the
annual decal sticker on license plates
and an automation of on-the-road systems to track validity of vehicle registrations,” said Crooks of LeasePlan USA.
14
More States will
Transition to Electronic Titles
“In lieu of the traditional paper title,
state DMVs are transitioning to electronic titles for convenience and cost savings. Nineteen states participate in an
Electronic Lien & Title system (ELT),
and 10 have ELT initiatives underway.
Nine states have made ELT mandatory for lenders, with others soon to follow. The American Association of Motor Vehicle Administrators (AAMVA)
discussed ELT benefits, including fraud
reduction, ease of processing, and potential cost savings. The AAMVA is
working towards an electronic lifecycle,
a change that would eradicate paper titles altogether. Budget constraints and
variances in DMV systems pose challenges and will delay the realization of
this concept for years,” said Damson of
GE Capital Americas.
This forecast was also made by Kacsh of Donlen, who cited the “increasing number of states offering or requiring electronic lien and title.”
15
New Registration Rules
for Autonomous Vehicles
“California is already looking at new
registration rules and regulations for autonomous vehicles. We are already starting to see vehicles equipped with this
technology hit the road. Taxes on these
vehicles will change as will the registration laws but these regulations are still
under review,” said Horn of Merchants
Fleet Management.
Car Sharing to
Become new fleet
management tool
By Mike Antich
C
urrently, there are 24 or so ridesharing and car-sharing programs
in the U.S. that are operating under a
variety of different business models. A
few car-sharing companies already have
relationships with corporate customers,
where they “park” vehicles on a corporate
campus. Car-sharing companies have
made initial inroads by promoting the
financial benefits of switching from an
owned fleet to a shared fleet. Examples
of early adopters among corporate fleets
are Verizon, Google Shopping Express, and
iPhone repair service provider iCracked.
Several fleet management companies
are looking to partner with car-sharing
companies in response to inquiries by
fleet customers, so long as the business
model is cost effective. There are concerns that car sharing butts heads with
“cultural perceptions” by employees who
are used to “ownership” of the vehicle.
Initial results show that car sharing
tends to work best on a corporate campus, at a university, or by a municipality
when employed as a pool car substitute.
However, the wild card in future penetration of car sharing as a corporate fleet
management tool is based on driver demand. Car sharing seems to have greater appeal to a younger demographics of
drivers. But, in terms of fleet management, car sharing allows for greater utilization of the vehicle, in contrast to pool
cars, which are historically underutilized.
One interesting trend that promises to
grow in the future is the tactic to tie car
sharing with achieving corporate sustainability initiatives. In the future, car sharing
will appeal to industries that require quick
spikes in employee headcount triggered by
new product introductions. In the next 10
years, car sharing will become one of the
different options available in fleet management. Companies will have the option
to either offer company-provided vehicles,
a reimbursement program, or car sharing
services, or, most likely, all three, to meet
the needs of its different driver populations.