Strategies to Manage Fleet Violations
While it's almost impossible to completely eliminate parking tickets, toll violations, and red-light-camera infractions, it is possible to limit the negative effect they have on fleets.
December 2013, Automotive Fleet - Feature
Photo courtesy of iStockPhoto.com.
Parking tickets, toll violations, and red-light camera infractions are often seen as the cost of doing business. And, these costs are on the rise. According to data from American Traffic Solutions (ATS), between 2007 and 2012 there was a roughly 50-percent increase in fleet violation volumes. In fact, according to ATS, tolls, parking, and photo enforcement account for more than 95 percent of the vehicle-issued violation volume impacting fleets.
For fleets, the majority (56 percent) of these infractions come in the form of tolls, 22 percent in parking violations, 12 percent from red-light cameras, and 8 percent from speeding cameras.
The potential bottom-line costs are staggering. In 2011 alone, for instance, Washington, D.C., collected $92.6 million in parking fines; an increase of $12 million from 2010, according to a report in the Washington Post. The increase in costs is related to an increase in fine amounts.
ATS estimated the average fleet violation fine is $74 per violation. Spread that across several hundred or thousand vehicles and the costs will add up quickly.
What complicates the issue with violations, and makes enforcement for a fleet and/or its fleet management company trickier is that these violations are issued not to the driver, but to the vehicle, according to Adam Draizin, president of fleet services for ATS. This causes certain complications for fleets.
"When it comes to vehicle-issued tickets, the owner of the vehicle – either the fleet or fleet management company — is liable for the violation. Many times, the fleet or FMC will pay the violation right away to avoid penalties or registrations holds. It is then up to the fleet to determine which driver was responsible for the ticket and then figure out how to get the fine and any other fees from the driver — a time-consuming process that is often unsuccessful," he said.
Connecting a violation to the responsible driver is a challenge, even for fleets that assign one vehicle to one driver — especially larger fleets working within a manual environment. For pool and rental fleets, it's even tougher.
To add to the headaches that vehicle-issued violations cause, since the recession, many municipalities have ramped up their efforts to issue more parking, toll, and speeding violations by using cameras, which is part of the reason why they're increasing.
Once a violation is issued, many municipalities have become more aggressive in their quest to recover fines as a means to offset falling municipal revenues.
The arrows in the fine collector's quiver are many, including non-payment penalties, debt collection, booting, towing, registration holds, public shame campaigns, and other similar strategies and tactics.
Because of these aggressive and varied collection policies, many commercial fleets have found that their fleet management companies (FMCs) often simply pay the fines and bill the fleet.
While this is an understandable approach considering that one of the tactics used to collect fines is to hold registrations "hostage," it can have bigger implications for the fleet itself.
"Fleets often absorb these costs rather than track down the driver. However, this increases a fleet's liability risk because it doesn't know which driver got the ticket. Courts have levied very punitive penalties against fleets even when they didn't know about a driver's violation record," Draizin explained. And, its not just the fleet that can find itself at a disadvantage if liability isn't transferred.
"When a fine is paid on a driver's behalf, it is effectively an admission of guilt on the part of the driver," said Vincent Brigidi, president and chief operating officer of fleet safety and accident management provider CEI. "In some cases, though, the driver might want to contest the ticket. For example, a red light camera might have caught him or her in an intersection where they were stopped to allow an ambulance to go by, or they might have been in a funeral procession that had the right of way through the red light. But once the fine has been paid, from the driver's perspective they have been denied due process."
Draizin added that transferring liability will save money for the fleet as well as increasing the driver's accountability.
With the pressure on fleet managers to save money, finding ways to manage violations are fertile ground to cut costs.
Identifying High-Risk Drivers
Brigidi noted that an even greater problem with camera-issued violations is that they can keep high-risk drivers hidden from a fleet's attention. The result could be exposure to untold amounts in liability if those drivers are later held responsible for an accident.
"Only a couple of states enter camera violations on a driver's motor vehicle record, which is one of the principal tools fleets use to identify high-risk drivers," he said. "But, camera violations are still public record, and accessible to a plaintiff's attorney. So you have the possibility that a driver with two, three or four speeding camera violations might have a clean MVR, and may even be recognized for being a safe driver, when the fact is that he or she has violations in their history that the fleet hasn't identified. When a fleet doesn't know that and has never taken any steps to remediate the driver's behavior, it is exposed to the danger of being found guilty of negligent entrustment, and there are plenty of examples where the costs have been astronomical."
Eliminating the headaches, liability, and risk associated with violations, can go a long way to saving the fleet money and making it a safer operations as well.
While parking tickets are a scourge that'll probably be plaguing fleet managers far into the future, Draizin said that there are violations that can be virtually eliminated. Case in point, toll violations.
"We believe that we can live in a world where anywhere there's an ability for electronic toll collections, we can eliminate violations," Draizin said.
The key is to be proactive instead of reactive. Draizin said that ATS has solved this problem by developing a way for fleets to go to an all-electronic, centralized system, using either a transponder or a license plate, which eliminates any violations.
In parking and photo enforcement, the key to managing these violations is transferring liability. About 60 percent of the time liability can be transferred to the driver, according to Draizin. "We want to take cost out of the fleet world, and we've found that we can reduce [violation] costs between 60 percent and 90 percent," he said.
Fighting technology with technology can be a key component in effectively managing violations. An automated violation management program can save fleets money and time, and incentivize drivers to improve their behavior. ATS and The CEI Group are working together to merge ATS' VioLogics violations management program into CEI's DriverCare program in order to enhance their clients' abilities to improve the safety of their fleets. The merged products are currently undergoing beta testing.
"ATS and CEI have integrated our systems so that, with a single sign-on, fleets can link camera violation data that comes from ATS with the individual fleet driver risk summary that CEI maintains in its online DriverCare Risk Manager application," Brigidi explained.
CEI is currently testing the capability with several fleets and expects to make it widely available in the coming months.
"Just as DriverCare has helped fleets to reduce their accident rates by as much as 40 percent, we believe that this new and industry-unique feature of DriverCare can be a tool to assist fleets in driving down violations of all kinds. In addition, it will help close fleets' liability gaps for cost of the violations and for future accident third-party damages as well," Brigidi projected.
While violations are given to a vehicle, it's a driver that is behind the infraction, and it's here that an effective violation management program can be most effective.
Paying a fine, transferring liability, saving money, these are all goals of an effective violation management program.
But, more fundamental is avoiding those violations to begin with. This is a particularly important goal because violations are tied to fleet safety.
That said, there is a sliding scale on which violations exist. "Parking tickets can be hard to avoid," Draizin observed. "But, certain tickets, such running a red light, you don't want that, that's unacceptable."
To be effective, violation management programs have to have an enforcement aspect to it. "What we found is that violation enforcement exists to modify driver behavior," Draizin said. "If there's no enforcement, there's no shift in behavior. Enforcement with a penalty will change behavior."
Brigidi concurred. "What it all comes down to is driver behavior, which can manifest itself as a ticket you get from a police officer, an accident, a 1-800-Hows-My-Driving call, a telematics event, or an image taken by a camera. All available input needs to be included in a driver safety program to provide the fleet with the best opportunity for success," he said.
Of course, drivers might not like this, but they will accept it. "We'll hear drivers that lament the fact that all this is crystal clear in their driving summary, but we don't typically get any objections to the concept itself, because I think that it's common sense. I think it's very difficult to argue that any one piece of it is not relevant," Brigidi said.