Big Data, Small Fleets—Scaling Connected Vehicle Services Down to Suit the Needs of Fleets of All Sizes

When the automotive industry grapples with the emergence of a hot new technology, some of the earliest questions posed by product planners, engineers and journalists are about scale. Cracking the code for widespread adoption has been a difficult feat for generations. Surely, these are familiar refrains: How quickly can an old guard monolith transition to adopt? Just how fast can a start-up upscale its production to take a bite of market share?

That’s why it’s so unique that the path to growth for connected vehicle data services is to scale down.

Connected vehicle data services (CVDS) are defined as software and platforms that provide fleet operators a resource to manage their data from their vehicles in the field and related business operations. According to our latest Fleet Advisory Hub^TM report, these products have exploded in popularity among fleets with at least 500 vehicles. And that growth is easy enough to understand—the ease of implementation and economies of scale at play mean managers of large fleets get incredible returns for every dollar spent on a data service.

However, fleets of that size make up a tiny fraction of the fleet industry as a whole, representing just 2% of the Fleet Advisory Hub audience.

To continue their growth path, CVDS providers must find ways to demonstrate value to the men and women who operate and manage the other 98% of fleets in the United States. Those include micro fleets (managing 1–5 vehicles), small fleets (6–50) and medium fleets (51–499). Our research shows an astounding 80% of large fleets have adopted CVDS of some kind, while just a fraction of the other segments have done so. But that doesn’t mean there isn’t interest—more than half of small and micro fleets are actively shopping for such services, offering a ripe opportunity for CVDS providers.

So, the name of the game will be scaling down the value proposition to meet the pain points of smaller fleets. If CVDS providers can demonstrate value to fleet operators with fewer vehicles over which to diffuse the cost of implementation and ongoing service, they’ll be able to seize on that high degree of interest. One path is showing the various ways collected data can be put to work to save the fleet time and money—even with the help of a third party.

Among fleets currently using CVDS offerings, 85% are sharing with external partners. Common sharing opportunities include providing vehicle telematics data to insurance providers to enable usage-based insurance, or to fleet management companies for a more comprehensive view of the vehicle life cycle. These implementations address unique challenges for small fleets and show how data can drive the solutions.

While it may seem counterintuitive at face value, CVDS companies must find ways to scale down their offerings to scale up their businesses.

To learn more about the ways large fleets are successfully deploying CVDS and how to overcome barriers to adoption for smaller fleets, send a note to our Fleet Advisory Hub team.