Telematics for Fleet Management Europe 2014: Day Two

A significant portion of the second day of the Telematics for Fleet Management Europe 2014 conference in Amsterdam was taken up by the future: the macro factors that will influence the market six years on, how Big Data will change the way business is done and, especially, how and when fleet telematics services will be integrated, perhaps around a common open platform.

The day began with a presentation by Michael L. Sena, president, Michael L. Sena Consulting, on the macro-factors that will be determining the way business will be done in the year 2020. Sena made it clear that 2020 was an arbitrary choice, since it was difficult to tell how quickly these changes would come. “It could also be 2030 and 2040,” he said.

Urbanization and fleets

For fleet telematics, the most important change will be the continued urbanization of the world’s population. Sena pointed out that, in 1800, 3% of the world’s population lived in cities and that, in 1951, more people in the United States still lived in suburbs than in cities. “Today, half of the world’s people live in urban areas,” he said. “This trend will continue.”

What this means for fleets is, "We’re going to have to need to get our goods into cities,” he said. He went on to suggest that drones may become a delivery alternative, as suggested by Amazon. “Trucks wasted $27 billion in time and money in 2011 in the United States,” Sena said. “I feel strongly that Amazon will get to the drone package-delivery system.”

He also said that vehicle-to-vehicle (V2V) communication would eventually become an important complement to current fleet telematics systems, and elicited a qualified confirmation from Karin Rådström, director of vehicle and driver services at Scania, that her company was "close" to having V2V in its vehicles.

The impact of Big Data

Franck Leveque, vice president, automotive & transportation, Frost & Sullivan, pointed out that Big Data was increasingly becoming an issue, not only in how to manage it, but, more importantly, how to use it to maximize benefits for all parties in the telematics value chain.

As a way of illustrating the astonishing proliferation of data produced, Leveque noted that “since the beginning of the world” until 2002, five exabytes (or five billion gigabytes) have been created. “In 2003 alone, humanity created the same amount of data,” he said. “In 2011, it took two days to create five exabytes of data; in 2012, two minutes; in 2014, a couple of seconds.”

Some 80% of the data saved today is unstructured, Leveque said, meaning that it is saved without knowing for what purpose it is saved. “The value lies not in the data itself, but in the analysis of the data,” he said.

The use of Big Data goes so far as to leverage tire pressure information into substantial cost savings for fleets, said Giorgio Audisio, head of tire systems and vehicle dynamics at Pirelli. Providing driver information via telematics is not enough, he said. “If you don’t fill your tires with air – which is quite cheap – you don’t get the maximum efficiency from your vehicle.”

Audisio explained that tires that are 20% under-inflated represent a fuel-consumption increase of 3%, which is roughly equivalent to €1,000 per vehicle per year, depending on mileage and vehicle type.

This point was also illustrated in the final presentation of the conference, conducted by Richard Barlow, CEO, Wejo, producer of a smartphone app that helps track and manage vehicle fleets. “The beauty [of our app] is we record everything,” Barlow said. “On average, we take 150,000 data points per month per drive.”

The Wejo app records real-time data about every aspect of a journey, such as acceleration, cornering, speed and whether it is day or night. It then sends it to the Wejo Cloud, where it is processed and analyzed. “It brings the data down so that it makes sense to the manager,” Barlow said.

Barlow cited an example of how analysis of the data helped both a fleet manager and his drivers when it showed that drivers tended to perform worse on Mondays than on Wednesdays because managers tended to give the drivers more to do on Mondays.

Fleet telematics and smartphone apps

Barlow’s presentation touched on several themes of significant interest to conference participants.

One of them was the utility of the smartphone in fleet telematics. On the first day, even supporters of the device admitted that there were situations where the smartphone could not replace the black box, such as in the transport of dangerous goods.

However, Barlow claimed that, in terms of data gathering, the smartphone was almost as good as the black box. “What we’ve been trying to do at Wejo the past two years is to prove that the smartphone is as good as the black box in 80% of instances – maybe 90%,” he said.

“The beauty of the smartphone is that everything is real-time,” he noted, “unless there is a poor signal,” in which case the data is buffered.

The Wejo app has been developed for Android and Apple, and has been built for the front end, the driver and the manager, Barlow explained. “We consider the driver as important as the manager, as the insurance company, as the business itself,” he said.

Because it is background-based, the driver is never aware of the application, Barlow said. It is also very inexpensive. “Our charge to the fleet market is $2 per month per driver,” he said. This cost includes the download and access to the Wejo Cloud, platform and all the data.

Fleets telematics and open platforms

In his presentation, Barlow also touched on another theme of significant interest: the open platform – and, by extension, the integration of telematics data and services. “Our app is an open platform,” he said. “We can work with third-party apps, and we already have clients who want to take our core code of an app and build their own app and talk to our platform.”

A panel discussion on how to “Customize Business Models for Your Customer” led into a discussion of the open platform approach.

Pirelli’s Audisio was one of the panel members, and he said that customers do not wish to install a new telematics system just to manage the tires on their trucks. “So they are pushing to have an integrated solution,” he said. “And sometimes a big customer forces a service supplier to integrate our solution into theirs.”

Audisio said this represented a considerable undertaking for both parties because “at the moment the situation is not stabilized from the point of view of standardization.”

“It’s not a plug-and-play solution,” he said. “It’s not like [in the] Microsoft or Apple world where you plug in a peripheral and hope it plays. You have to develop some software.” Standardization and integration are the key issues, he emphasized. “We don’t want to be a service supplier,” he said. “We leave this to the service supplier. … We want to continue to sell tires. We think a tire maker is not the right player to enter this arena.”

Speaking during a panel discussion on integrated platforms for fleets, James Hookham, managing director, policy and communications, of the Freight Transport Association, said that fleet managers in the United Kingdom were calling for an open platform and greater integration.

One reason, he said, was that “no one fleet manager is able to comprehend in its entirety one particular provider’s solution.”

“And there are good corporate reasons for not investing all your telematics investment in one supplier,” he went on. “Certainly, all my members don’t source their vehicles from one manufacturer.” According to him, many of the 14,000 members of his association are resisting the telematics sector because they think they will get locked into one supplier and get a poor deal.

“The sourcing of products and services from different providers allows fleet managers to feel confident that they’re not getting locked in to one provider and will be able to continue to use legacy systems in the future and not find themselves holding last year’s model,” he said.

And, declaring that he felt fleet telematics was currently “a big-company game,” Hookham suggested that an open platform would be “an important way to permeate out in the smaller fleets.”

“An open platform approach could ease the integration of all data,” added Andrea Sroczynski, head of global automotive sales, Telenor Connexion. “And you can have this open platform with more and more players on it if you have a wise architecture below to enable the sharing of the cost.”

Getting it right

However, there were many reasons that an open platform solution has been so long in coming, she said. One problem was the cost of initial investment. “OEMs are pushing for it,” she said. “But they have to do the initial investment and they don’t want to sit on all the cost.”

Far more serious barriers were safety, security, liability and branding. As Wejo’s Barlow said, “We did debate about making our software completely open, but we can’t do that because of hackers and fraud.”

And there is also always the question of liability. “If the network breaks down during an emergency call or someone [hacks into the system] and gets their hand on the brake and doesn’t use enough force and there’s an accident, who’s responsible – Volvo, or Scania or the platform provider?” Sroczynski asked.

Pirelli's Audisio suggested that encrypting the data could be one way of securing proprietary solutions on an open platform.

Sroczynski said that there had to be a way of limiting access to certain proprietary data on an open platform by making it accessible only to those authorized to use it.

Despite the considerable issues still to overcome, most participants were optimistic. “It’s inevitable,” Hookham said. “Bill Gates made money when he created a common platform for that great army of software writers and innovators that emerged at the beginning of the IT boom. … It’s a big opportunity if someone who gets this right.”

(For our day-one coverage of the event, see Telematics for Fleet Management Europe 2014: Day One.)

Siegfried Mortkowitz is a regular contributor to TU.

For all the latest telematics trends, check out Content and Apps for Automotive Europe 2014 on April 8-9 in Munich, Germany, Insurance Telematics Europe 2014 on May 6-7 in London, Telematics India and South Asia 2014 on May 28-29 in Bangalore, India, Insurance Telematics Canada 2014 on May 28-29 in Toronto, Telematics Detroit 2014 on June 4-5 in Novi, Michigan, Advanced Automotive Safety USA 2014 on July 8-9 in Novi, Michigan, and Telematics Munich 2014 on Nov. 10-11 in Munich, Germany.

For exclusive telematics business analysis and insight, check out TU’s reports: Telematics Connectivity Strategies Report 2013, The Automotive HMI Report 2013, Insurance Telematics Report 2013 and Fleet & Asset Management Report 2012.

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