GPS Tracking ROI

Such technology will let Australians opt for “pay-as-you-drive” insurance, where the cost of premiums go up or down depending on how far and when a car is being driven.

The technology will also have a positive effect on road safety, according to Mr Issa.

“If the car’s driven by a P-plater between 11 o’clock at night and six o’clock in the morning, the insurer will know about it,” Mr Issa said.

Mr Issa accepted privacy issues could arise from placing trackers in younger driver’s cars.

“It could be a bit Big Brother-ish,” Mr Issa said.

“But I’m a parent and if it meant my child was a bit safer as a result, I’d be happy to take it out with my kids when they start driving.” .. full Australian PAYD (Pay As You drive) article here…

So, where do you stand on this? Death by auto is the number one cause of death from something like age 5 until age twenty-something. Are you more concerned with saving your children’s lives or with being their “buddy”?

Would you track your car and your children’s cars if it would save you 10% on your car insurance? 15%? 25%?

One thing I’ve notic3ed about human nature as I have matured .. or perhaps just aged … very, very few tings happen without warning. But we, especially Americans, are very adept at ignoring the warnings.

Insurance companies own Congress and thus the law of the US. Period. Many of these PAYD and track your teen initiatives I have been writing about seem to come from Canada and Australia. But, in addition to saving lives there are very real dollar savings attached. If you think your insurance company doesn’t know the smell of money, you have another think coming.

I believe many of my readers will hate this PAYD idea. I don’t blame you at all. But my question today is … what are you going to do about it? love it or hate it, some version is going to come and come soon. You can’t say you haven’t been warned.

As always, I welcome comments, confirmations, even disagreement is encouraged, and you can also email me direct at: davestarr (at) gmail (dot) com or call me on 1-719-423-8872. If you liked this article, please subscribe to my RSS feed so you get all my news and views.

GPS-tracked mileage taxes, private toll roads, and other dumb gimmicks

Russell Sadler

Despite a building backlash against toll roads and highway taxation-by-the-mile schemes, these gimmicks seem to have a mind of their own, grinding ahead despite public opposition that will eventually sink them.

In Oregon, a “pilot project” is underway to tax vehicles by the mile. Public employee vehicles and some private drivers are installing GPS systems to track when and where they drive. The data are collected when the driver fills the tank at selected gasoline stations and taxes assessed.

We are assured this data will remain secret and used for no purpose other than determining how much highway tax to pay. But after six years of the Bush administration, such promises are no longer credible. The only way to protect that kind of intrusive information is not to collect it in the first place… read all of Russell’s column here:

Talk about a made-to-order subject this morning … Google News (I have it set to search for articles on GPS, works great) came up with this column with some well thought out comments about the pilot program in Oregon which proposes to use GPS tracking in vehicles to tax drivers for road usage … possibly replacing gasoline taxes … but that part is still iffy.

I’ve written about these initiatives several times before, I have a whole blog category devoted to these PAYD (Pay As You Drive) initiatives. In general the idea of replacing fixed-rate per gallon taxes with more flexible alternatives has certain real pluses: (more…)

Governor Tim Pawlenty wants to explore replacing Minnesota’s motor fuels tax with one based on mileage. He argues that the advent of renewable fuels and more hybrids hitting the roads is already lowering the demand for gasoline.
And, he says, as consumption of gas and diesel drops the reliabilty of the fuel tax as a source will also falter. Currently the state’s fuel tax of 20-cents per gallon raises $650 million a year, but that has leveled off recently and is already projected to fall.
“And this would allow us then to charge by mile driven, regardless of fuel source. It would be a fuel neutral charge for miles driven,” the Governor told reporters in his budget address.
Mr. Pawlenty included $5 million in his 2008-09 budget to launch a pilot project testing a mileage tax system in Minnesota. The state of Oregon started a similar test in March, using 250 volunteers driving specially equipped cars… Rest of the Pay As You Drive article here

Happy President’s Day weekend to my readers in the US.  Although you all know I am a certified (certifiable?) GPS nut I still don’t know if every scheme that someone thinks up for the use of “my” toy is a smart scheme.

States and the federal government obviously are somewhat interested in driver’s economizing on the use of foreign fuel.  Drivers, to some extent, are also interested in savings.  This has the side effect of reducing state’s fuel taxes collected.  There are various solutions offered from time to time, one of which has been having a lot of play lately … all can be lumped under the catch phrase of PAYD, Pay As You Drive.   I’ve written a bit on this already, see

GPS for PAYD? Not the way Oregon is Heading , GPS Tracking For The Consumer — It Ain’t Just For Big Rigs and especially

Dirty Little Secret — When is a Mile not a Mile (or a Kilometer not a Kilometer) for a little background.

Bottom lone still boils down to be the folks who think universal GPS tracking is a solution to the shrinking tax problem have it wrong in several ways:

• Privacy:  The state(s) will collect massive amounts of information that they will either have to devise expensive means to protect or suffer interminable suits by disgruntled citizens … putting one citizen’s total on-road activities on-line in one repository is certain to run afoul of current or future privacy regulations.
• Data Volume: Tracking a fleet of vehicles for a business our a government agency or even a family of teenagers is a definable task which can be scoped and budgeted for,  tracking a whole state full of vehicles will produce a huge burden in data storage, sorting, back up and analysis tasks,
• Accuracy:  If you want to tax me by the gallon or liter of fuel I purchase, great.  The pumps are verifiably accurate and kept that way by weights and measures people.  GPS trackers and even the basic odometers in a car are not covered by any form of national certification and can easily be off by even 10 or more percent.  You can not tax me with a yardstick that can’t be verified.  Trying to do0 so will just be a full time lawyer employment act.

So think this through, Governor Pawlenty an others in this position.  GPS is a great tool, a wonderful tool for many things but it is not a gas tax collector, period.

Government admits struggle to sell road pricing scheme

Hélène Mulholland and agencies
Wednesday January 10, 2007
Guardian Unlimited

Traffic in London. Photograph: the Guardian.

Downing Street today acknowledged that ministers faced a struggle to win public support for road pricing.

A petition posted on the No 10 website protesting against the proposals has already notched up over 160,000 signatures.

The prime minister’s official spokesman accepted that the idea of charging motorists for every mile they drive has aroused strong feelings.

However, he stressed that action was essential to prevent congestion getting out of control.

The scheme, currently being piloted in a number of areas, uses satellite-tracking technology to charge motorists for using certain roads. Prices vary depending on the location and the time of day…. Full Guardian article here:

A lot of stories are landing in the in-box lately about PAYD (Pay As You Drive) schemes.  I’ve been covering the subject often,here, here, here and here for just a few reports.  What we need to do here is separate the idea of PAYD from the somewhat ill-thought out technical solutions being proposed by officials ignorant of technology and some vendors who seem eager to sell a solution, even if it’s wrong.

In the world of formal, government communications and information technology programs usually follow the requirement/tech solution/implementation road map.  One doesn’t (if they are smart) implement  a tech solution before they have the requirement defined.  Many ill-fated programs have the root cause of their failure laid at the step of the customer who started out by telling IT the solution he wanted … instead of letting the right folks devise the proper solution.

The Requirement:

Reduce traffic on key roads so that overall traffic flow avoids gridlock whenever possible.  To me, that’s all that should be stated.  To decide to charge people more for certain roads is a potential solution, it’s not at all the requirement.  Aside from improving traffic slow I see no reason at all for the government denying the free and convenient use of the roads the citizens paid for, do you?

Some Possible Tech Solutions:

• Raise fuel taxes.  Simple, isn’t it?  But here’s the advantages:  First of all it’s a taxation already imposed and the infrastructure to collect it is already in place.  It’s totally democratic … the more you drive the more you pay, the bigger your car the more you pay, etc.  Will it induce anyone to take alternate routes?  Not likely but if you reduce the overall flow of traffic both desirable and less desirable roads will be able to continue serving the public.  As fortuitous fallout from this solution you’ll cut overall driving, oil consumption, road injuries and the emission of green house gasses.  Pretty much an all positive idea.
• Charge By Specific Roads: There is already a well established way to both finance highways and control access.  It’s called a toll road.  Either by means of conventional toll barrier schemes or the much easier and cheaper idea of billing cars upon entry and exit with simple ALPR Automatic License Plate recognition devices.  See here, for example. This idea requires more infrastructure but has the advantage of being easily applied to specific areas and those areas can be expanded, moved or done away with a population density and traffic issues change.
• GPS Track All Cars:  friends, I’m Mr. GPS. (Tim Says So) I love the technology, have made my living with it for years and am a firm believer that the uses of GPS have only begun to be tapped.  But just like I wouldn’t advise a 16 pound sledge hammer to swat a fly, I would not advise using GPS tracking for this project.  There is no ROI.  The infrastructure costs would be significant.  keeping all the units in hundreds of thousands of cars working would be a maintenance nightmare, and there are huge, real privacy concerns.  How has the data, who can view the data, how long is the data kept … the list goes on and on.  But by far the worst aspect of trying to select the GPS tracking tool for the wrong application is this … the data itself.  You can buy ten or a hundred or even a thousand GPS trackers to keep tabs on specific vehicles and see tremendous advantages.  But the sheer volume of information a scheme like this would collect is gigantic.  The data processing of reviewing all the tracking information, correlating it with location, time of day, etc. is an immense task and it grows exponentially as the number of cars and the number of miles increases.  Very ill advised.

There’s a lot of old sayings that could apply, the one most appropriate might be, “when your only tool is a hammer, it’s hard not to see the world as a nail.”  GPS is the wrong tool for this idea and pursuing this course is a huge, huge mistake.

California State Automobile Association Pilots On-Road Safety Program

July 26, 2006 - Waterloo, Ont. - California State Automobile Association (CSAA) plans to launch a pilot program this summer using telematics technology to improve driving safety. Using the DriveSync GPS vehicle tracking system from Intelligent Mechatronic Systems Inc. (IMS), CSSA intends to increase the value of AAA membership for itself and other AAA partners, including AAA Arizona, AAA Oklahoma and AAA MountainWest. Rapid vehicle location for roadside assistance and driver safety improvement are some of the areas that will be researched.

DriveSync is a GPS vehicle tracking system that tracks vehicle location including the route, mileage and speeds of each trip. As a turnkey solution, IMS manages all aspects of driving data collection, storage, consolidation and reporting using fraud-prevention technology and military grade data encryption to ensure customer confidentiality. The system produces turn-by-turn trip logs, color-coded route maps and driving statistic reports, which can enable drivers to see a clear picture of their driving behavior and habits…. Rest of article here:

As regular readers know I have posted a number of times about PAYD (Pay As You Drive) and other initiatives by government or large commercial organizations that potentially will bring the benefits and ROI (Return On Investment) of GPS tracking to larger and larger segments of the driving public. (See here, here, here and here for a little background)

This is an interesting proposal from one of the largest regional auto clubs. And, of course, it’s in California. Especially when it comes to cars, as California goes, so goes the USA. Rather than many of the government mandated ideas, the CSAA is exploring technology to see what services enabled by GPS would offer a benefit to members. Depending on the overall suite of equipment and software they make available there could be a lot of benefits:

• Mileage recording, including proof of business vs. personal miles

• These rates currently amount to:

• 44.5 cents per mile for business miles driven;
• 18 cents per mile driven for medical or moving purposes; and
• 14 cents per mile driven in service of charitable organizations, other than activities related to Hurricane Katrina relief.

• Personal experience with a capable, but consumer level routing software such as Microsoft MapPoint has proven to me that business can save 5 to 15% with pre-planned routing. If the CSAA promotes a system with real-time turn by turn directions these savings become even more assured.
• The AAA and others have proof that driving costs typically add up to more than the IRS allowance quoted above, but just to keep it simple, let’s imagine an owner who drives 15,000 miles per year and saves 10% by intelligent routing. Potential savings there add up to well over $600 a year.

• At $1400 or #1500 a year as typical premium cost this could easily net $280 per year.

So, what do we have here? Perhaps $3000 in tax deductions, $600 in routing, $280 in insurance discounts … a believable savings for many drivers of well over $300 a month. A typical cost for a live system with all these features is perhaps $36 a month. $260/$270 a month net savings per motorist …. Any wonder the CSAA is looking hard. So should you be, business owner or private individual.

Sadly, because of the comment spammers who were up to 70 phony posts per hour last night I have turned comments off until further notice. It’s sad when these idiots have to spoil a good thing, but oh well… You can reach me via the good old method of email: dave (at) satviz (dot) com

Tim Hibbard, whose blog you should be reading and whose location can usually be found here, posted a couple cogent comments to my post on Canadian insurance companies offering cash discounts for GPS use:

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I think this is a good idea, and it helps promote the positive connotation of GPS. This is an example of GPS helping the consumer and we will need a lot more examples of this before GPS can rise above the “track my kid” status.

I believe that the biggest market for GPS is consumer. Transportation companies and assest/vehicle tracking will always have a need for GPS, but there is a lot of money to be made at the consumer level. However, the privacy implications issues will bubble over sometime in the next 3 years. If the average consumer does not see the positive daily benefits of GPS, or is not educated on the potential positive uses of GPS, then the consumer market will shut down. People are willing to give up privacy, but you better give them a good reason to do so. Americans are cheap and lazy efficient. That is why Garmin’s new mobile product that routes you to the cheapest gas station is great for the consumer market.

The cell phone service providers have to get on board and allow us access to the GPS data. Nextel is the only company that will allow a 3rd party java application on the phone to access the GPS chip. If the rest of the companies would follow Nextel’s lead, we can write some killer applications that add value to the average consumers life. Then, when the GPS privacy implications come to a head, the average Joe will want GPS to stick around because it helps him be cheaper and lazier.

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I like what Tim has to say. Especially the part about “lazy”. There’s an old saying about necessity being the mother of invention. Personally, I believe that’s true, and I also believe that laziness is the father. Inventing things to make life easier is rarely wrong … and it usually turns out to have some sort of socially redeeming values as well.

I know Tim and his company have been having a lot of success with java and the Nextel phone systems … but it’s so funny, I was just interrupted by a phone call from yet another dissatisfied Nextel tracking customer asking for a price quote to toss out the NexTel product and substitute a non-Java application on an HP phone/PDA that will provide a much better level of service. Not trying to knock NexTel out of turn, their own clients are doing that … as far as Java in place of a real OS like Windows Mobile … I’ll let the software engineers debate that one.

Anyway, thanks Tim, talk to you soon.

ICBC eyeing black boxes to track driving habits

By Jeff Nagel

Black Press

Jul 12 2006

ICBC is planning to install black box recorders to monitor the driving habits of 400 volunteer motorists.

But the auto insurance corporation says it’s doing so simply to keep pace with advancements in the insurance field – not as part of any plan to make widespread use of vehicle data recorders.

“That’s way down the road for us,” said ICBC spokesman Doug McClelland. “We figured we’d better get some experience working with this.”

Some private auto insurance firms in Canada are already using the devices, offering customers discounts on their insurance premiums in exchange for plugging in the black boxes to record how safely they drive.

Aviva Canada is offering Ontario drivers discounts of five to 25 per cent to participate… Rest of Article here:

For us south of the border folks the first thing that probably comes to mind if, who the heck is ICBC? The answer is, the Insurance Corporation of British Columbia. If you take the time to read the whole article you’ll see that a number of Canadian insurance companies are already using GPS tracking to voluntarily give savings to policy holders. Here in the US, I’m sorry to have to say this, but insurance companies just seem to revel in claims. The more accidents the more they can charge and the more they charge the more they make, so what’s for lunch.

This is far from the first time I’ve seen Canadian firms leading the way in the intelligent merger of technology and commerce. Why shouldn’t those who drive more cautiously and practice safe driving habits get a better insurance rate? For those of you who are worried about being spotted spending hours at the bar or visiting your girlfriend while you tell your wife you’re working late, well go ahead and voice your privacy moans. Myself? I’d prefer to save 25%.