Two of the largest telematics providers in the country are warning that the turmoil in the industry, which led to the collapse of providers such as Minorplanet, will continue.
This means fleets must continue to tread carefully when appointing a new telematics provider.
Andrew Yeoman, managing director of Trimble, which has just acquired a major European telematics company, said there are still providers who are reliant on “unsustainable” lease funding models.
“There is still turmoil in the market,” he said. “It has not ended. There is a dichotomy: fleets using telematics are seeing the cost savings, but they are also seeing telematics providers struggling with their own models.
“My advice: stay away from those providers that require lease finance.”
Tom O’Connor, managing director of CTack, the company that acquired the assets and customers of Minorplanet following its collapse earlier this year, agrees that the industry is still struggling.
“There is a lot of damage still being done,” he said. “The market is worse than flooded with suppliers. The industry has a very bad reputation and it is important that it is cleared up,” he said.
His advice: “Pick a partner not a product.” Which explains why as soon as Digicore acquired Minorplanet’s assets it immediately dropped the name and created Ctrack.
Much of the problems within the industry have stemmed from the various funding models suppliers used to sign up fleets.
Some use the third-party finance model which required fleets to source funding themselves to pay for the telematics hardware. These funds were handed over to the provider. However, as is the case with Minorplanet, the company went under leaving the fleet repaying a debt for a service it was no longer receiving.
Despite the obvious flaw with this model, which has left some of his newly acquired customers in a difficult position, O’Connor is not an advocate of the alternatives that have now come to market.
For example, several companies now offer pay-as-you-go telematics, “Pay-as-you-go is a dirty term, it is a false economy,” he said. “It is short-term and we are here for the long-term, not for a quick sale.”
Ctrack he said is in talks with finance providers to secure credit for its customers. But it will not offer pay-as-you-go.
“Finance will become available from suppliers,” he says. “But pay-as-you-go is a false economy. We don’t want to be in that arena.”
O’Connor is also highly critical of telematics suppliers who are offering fleets ‘settlement’ solutions where they will settle the outstanding finance on the current telematics provision provided the fleet switches to them.
“This will kill the industry,” he says. It was a practice MinorPlanet was also involved in.