The Car and Truck Fleet and Leasing Management Magazine

Acquiescence to Employer Monitoring May Be a Future Condition to Getting a Company Vehicle

October 2001, by Mike Antich - Also by this author

An interesting trend is emerging from the consumer auto insurance industry. Progressive Insurance Co. became the first company to issue a "usage-based" auto insurance policy, whereby the insured agrees to have a GPS system installed in his or her vehicle. Progressive successfully tested the program in Houston with several hundered policy holders from August 1998 to July 2001.

The test determined that it was technologically feasible to calculate auto insurance based on usage-based variables. Every six minutes, the equipment recorded how often a vehicle was driven, where and when it was driven, and the duration of each trip. This data was automatically transmitted to the insurance company's computers via cellular phone, where it was used to identify an individual's driving habits to enable

Progressive to calculate the monthly insurance premium, which varied based on actual usage, along with other underwriting variables. Does this have a fleet application? Sure. There are many possible applications. One fleet application would be a way to deal with the high-risk driver, who also happens to be the "star salesperson." How many of us have encountered the refrain, "But he's one of our best salesmen," when attempting to discipline an accident- or ticket-prone driver?

To avoid negligent entrustment and retention lawsuits, you can't afford to ignore these high-risk drivers. What if an interim disciplinary action would require high-risk drivers to have their "actual use" driving monitored via a GPS system prior to more severe disciplinary action such as the forfeiture of the company vehicle or even termination? Using such a system, if an employee's reckless driving behavior continues, you now have the documentation necessary to deal with the problem instead of waiting for a catastrophic event to occur. What will make "actual use" monitoring relatively easy to perform in the future is the new generation of vehicles the auto manufacturers are developing, which will incorporate telematic tracking devices. A corollary trend involves American Car Rental, d.b.a. Acme Rent-A-Car in New Haven, CT, which electronically monitors the road speed of the vehicles it rents to consumers through the use of AirIQ's GPS-based vehicle tracking system. Whenever customers exceed 79 miles per hour for more than two continuous minutes, Acme automatically debits $150 from a customer's bank account or credit card for each speeding occurrence. According to Acme, the purpose of the speeding penalty is not to generate additional revenue, but to prevent accidents in order to keep its insurance costs down. Since implementing the program, Acme says its accident rate has dropped more than 50 percent. However, following complaints from consumers, the Connecticut Department of Consumer Protection filed a complaint against American Car Rental, accusing its Acme Rent-A-Car operation of unlawfully charging speeding fines to its customers. American Car Rental said it will challenge this complaint and has refused to discontinue the practice, arguing that the terms are clearly stated in the rental agreement and that customers are required to acknowlege in writing their understanding that the rental vehicle will be electronically monitored and that they are willing to comply to the speed restriction. One fleet manager with non-union drivers, who wished to remain anonymous, has wondered out loud whether employee drivers in the future could likewise be penalized with automatic payroll deductions for driving faster than specified speeds in their company vehicle.

Symptoms of a Larger Trend

What is interesting about these two examples is that they are manifestations of a much larger trend of employee monitoring by their employers. According to a recent Privacy Foundation study, employers are monitoring one of every three workers online, which most likely includes many of us who are currently reading this column. Thirty percent of the U.S. work force is online. Of that number, 14 million are subject to a fast-growing corporate trend that is being referred to as "continuous surveillance." What is motivating employers to engage in continuous surveillance is the threat of legal liability, according to more than two-thirds of the respondents to a recent American Management Association survey. The question is whether the corporate umbrella of continuous surveillance, in the future, will extend beyond employee computer usage and into fleet management, especially as telematically-enabled fleet vehicles become more commonplace. Will acquiescence to continuous surveillance become a future requirement for employees prior to being assigned a company vehicle? At the moment, these issues are strictly academic. But most likely sooner, rather than later, they will become real-world issues and we will all be forced to balance the conflicting goals of using continuous employee surveillance to minimize liability exposure and enhance productivity while, at the sme time, not violating employee privacy. Let me know what you think.

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