Simplytrak CEO Andrew Johnson was quoted today by Fleetnews in their article about the state of the telematics industry. It states that very many vehicle tracking companies are now going bust because of their poor business models. The two models that are coming to the forefront now are ‘in-house leasing’ and ‘pay as you go’ as opposed to the traditional ‘3rd party lease’ model preferred by so many previously.

We were quoted as supporting the only really viable business model out of the three above – the in-house lease. Unsurprisingly we have been championing this for four years now whilst companies around us have been taking all income upfront from lease companies, then having no impetus to look after the customers and nothing to support the tracking provider in a credit crunch situation like we face today – hence why they are now falling over like dominoes. The reality is that leasing companies are beating a hasty retreat from the doors of telematics providers as telematics customers pile on the pressure when they are forced to pay the lease companies for non working systems, often for years. Quite right too. We have always believed that there should have been laws against providers getting paid upfront. However, in the bad old days of the credit boom, pretty much anything went.

Except for the credit boom, telematics should have moved out of the pioneering stage years ago. The cowboys should be long gone and the reliable, service based companies should have come to the fore a good while ago. However, the proliferation of 3rd party lease companies in the industry has slowed the natural progression of the industry and kept the scallywags in business.

That is all about to change now. This long awaited clearout will leave two new models in place. PAYG, which is resource hungry for the provider and good only for SME’s with a short term view, and in-house leasing which is cheaper in the long run and sustainable for both customer and provider alike.

It has been a long time coming but we welcome the change.

The Fleetnews article can be found at -

http://www.fleetnews.co.uk/news/story/TELEMATICS-LATEST-carnage-in-the-industry/50756

Simplytrak can be contacted at www.simplytrak.co.uk