Small Business Management

What is a Vehicle Tracking System?

As a business owner, there’s nothing worse than receiving angry phone calls from customers who say no one showed up for their service visit. Except for maybe vehicle breakdowns from DTC codes being ignored until it’s too late, or fuel consumption skyrocketing for no apparent reason. 

There’s a lot that can go wrong when you’re responsible for a fleet of business vehicles. While preventative maintenance and driver training are important parts of effective fleet management, you unfortunately can’t completely control what your drivers do once they leave your parking lot. 

Vehicle tracking systems are an effective and affordable way for companies to monitor their vehicles’ locations, behavior and health — all from your phone or computer.

Keep reading to learn exactly what a vehicle tracking system is, how they use GPS technology to transmit real-time data and why every business  needs to consider implementing a vehicle tracking solution.

What does a vehicle tracking system do?

A vehicle tracking system allows business owners and fleet managers to track and monitor real time data on the location, behavior, health and security of their vehicles, all in a centralized and easy-to-use platform. This information can be used to monitor driver performance, improve customer service, improve fleet safety, increase efficiency and more.

How does a vehicle tracking system work?

Vehicle tracking systems use a mix of Global Positioning Systems (GPS), cellular networks, and the internet to track and transmit real-time data on fleet behavior and performance. 

There are two main aspects of a typical vehicle tracking system; the tracking device installed in the vehicle itself and the user interface to access and analyze all of the data.

The Vehicle Tracking Device (Hardware)

To enable tracking, each vehicle in the fleet must have a GPS tracking device installed. There are different types of vehicle tracking devices, each with varying capabilities (more on this below). Generally, the tracking device gathers vehicle information such as speed, DTC codes, and manufacturers’ recalls, as well as real-time location data from the GPS tracking system.

All of this data is then sent to a central server using cellular networks. Some vehicle tracking systems transmit data to the server via satellite technology, but for the purposes of this article we will focus on data transmission over cellular networks, as this is the most common method used for small business fleets.

The User Interface (Software)

This is where the magic really happens — it’s where business owners and fleet managers can view, in real-time, all of the data and insights available about their fleet vehicles.

In addition, you can also set up location and vehicle health alerts, export data for tax, accounting or customer service purposes and monitor fuel levels.

The best vehicle tracking systems let you do all this on any device — a desktop computer, tablet, or smartphone. 

What kind of vehicle tracking devices are there?

There are three main types of vehicle tracking devices that are used for fleet management:

  1. Plug-In GPS Tracking Devices

 Plug-in tracking devices are plugged into a vehicle’s OBD-II port. This allows them to track GPS coordinates as well as data from the vehicle. They draw power directly from the vehicle instead of an external power source, making them highly reliable and also able to detect when a car is powered on or off.

  1. Hardwired GPS Tracking Devices

Hardwired tracking devices are hardwired directly into the vehicle. While they’re not as easy to install, they are sometimes the only option (particularly for older vehicles lacking an OBD-II port) and can still transmit the same data as a plug-in device. 

Hardwired vehicle tracking devices can be installed underneath the dashboard and out of the driver’s view. This makes them difficult to tamper with, although privacy laws in your jurisdiction may require you to make sure drivers are aware that you are using a vehicle tracking system.

  1. Battery-Powered Tracking Devices

Battery-powered tracking devices work independently of the vehicle itself. While they use powerful batteries with long lifespans, they still work to preserve power by transmitting data on a less frequent basis than plug-in or hardwired devices. 

A downside of battery-powered devices is that because they’re not connected to the vehicle’s system, they don’t transmit data such as health alerts. On the plus side, this means they can also be used on other fleet assets, such as trailers and construction equipment. 

Mobile phones can also be considered a vehicle tracking device, although we haven’t included them in this list because it’s not their primary purpose. Some vehicle tracking systems do make use of phone-based tracking technology, which we’ll cover in more detail below.

Do vehicles have tracking devices built-in?

Many newer vehicles do have some form of GPS location tracking built-in. These are usually designed for use with an in-vehicle navigation system, roadside assistance services, or to locate a stolen vehicle.

Fleet management systems, however, typically require the use of an additional tracking device that integrates with the platform’s software and provides more comprehensive data.

What is the difference between phone tracking and vehicle tracking?

These two different types of vehicle tracking technologies work exactly as their names suggest; phone tracking tracks the location of a driver’s mobile phone, while vehicle tracking is hardware-based and tracks the vehicle itself. 

Overall, both phone and vehicle tracking use GPS technology to provide companies with data on the routes their vehicles are taking. Beyond the basic location tracking function, however, there are significant differences in the information that can be transmitted and the ease-of-use.

Cell phone-based tracking

Cell phone-based tracking is largely limited to location information and does not transmit any information related to vehicle health or security. There can also be gaps in tracking if a driver is in an area without cell coverage or if their phone battery dies. 

Phone-based tracking is ultimately tracking the employee themselves as opposed to the vehicle on its own. As such, phone-based tracking is typically best suited for consumer use.

Hardware-based vehicle tracking

Hardware-based vehicle tracking, on the other hand, is much better suited to commercial use. It uses GPS tracking devices that are typically plugged into the OBD-II port of the vehicle, allowing them to send location data as well as vehicle data such as DTC codes, recalls and critical battery or fuel-level alerts. 

Most hardware-based tracking devices draw power from the vehicle so you’re not reliant on employees keeping their phones charged. Another advantage is that it’s the vehicle you’re tracking, not the employee (or their phone) — which is definitely preferable from a privacy point of view. 

Check out our detailed breakdown of hardware-based vehicle tracking systems vs. phone-based ones. 

Are vehicle tracking devices legal?

While the laws vary depending on the state your business operates in, vehicle tracking devices are legal when used for the purpose of tracking company-owned vehicles

Some drivers may have reservations initially, but a vehicle tracking system ultimately tracks the vehicle, as opposed to the employee themselves, which is why it’s permitted by law for company-owned vehicles. Your vehicles are an important asset, so you can and should be able to know their location and condition at all times.

The laws get murkier, however, when employee-owned vehicles are involved. We always recommend doing your own research, and obtaining legal advice if necessary, to ensure your vehicle tracking policies and procedures are in line with local regulations.

What are the benefits of a vehicle tracking system for small businesses?

You don’t need to operate a massive fleet in order to enjoy the benefits that a vehicle tracking system has to offer. Some of the many benefits of vehicle tracking for small businesses include:

  • Real time tracking to know the location of your vehicles at all times
  • Increased driver accountability to prevent side jobs, extended breaks etc.
  • Track driver behavior to identify areas of improvement in efficiency or safety
  • Decreased fuel costs by identifying and addressing wasteful driving habits
  • Easily share updates on driver status and ETA with customers
  • Better tracking of DTC codes and other vehicle health alerts instead of relying on drivers to report them

Just small improvements to a fleet’s performance can bring significant improvements to your customer satisfaction, fuel consumption, driver safety and ultimately, your bottom line. No matter the size of your business, investing in a vehicle tracking system is an affordable way for business owners and fleet managers to get the information and insights they need to effectively manage and grow their business.

Get started with a small business vehicle tracking solution

Whether you operate one vehicle or ten, Force by Mojio offers an affordable and comprehensive vehicle tracking system that’s specifically designed for small businesses. The low monthly fee includes plug-in 4G GPS tracking devices that are easy to install in each vehicle, with no hidden fees or contracts. 

Sign up for a 60-day free trial today and experience for yourself what vehicle tracking systems have to offer.