What Is Telematics? Meaning, Working, Types, Benefits, and Applications in 2022

Telematics leverages telecommunication components, vehicular sensors, wireless networking, and data dashboards to enable long-distance data transmission from moving transportation devices. This article explains how telematics works, its pros and cons, and applications for IoT.

What Is Telematics?

Telematics is defined as a technology system that leverages telecommunication components, vehicular sensors, wireless networking, and data dashboards to enable the long-distance transmission of data from moving transportation devices. 

Telecommunications and informatics are combined in the term telematics. It is frequently defined as “the integration of computer and Wi-Fi information and communication technologies to effectively communicate across vast systems to bolster a range of services.”

During the Cold War, the term “telematics” was first used in a U.S. technology report in 1978. Due to concerns about public safety and the nuclear threat, global positioning systems (GPS) were primarily developed for intelligence and military applications. However, it wouldn’t be long before significant research initiatives started experiments with telematics to improve road safety and reduce environmental impact.

Presently, the meaning of telematics is widely associated with its application in vehicle detection and investments when having up-to-date data on their location is required for everyday business operations. GPS tracking is an instance of telematics in contemporary fleet management.

Further, telematics can improve fleet control and visibility for managers through aftermarket solutions that capture data from diverse fleets. Passenger-load vehicle fleet managers can accurately see how many passengers are in each vehicle. They can also maintain surveillance systems inside the cars. Video feeds inside the vehicles can also be stored for litigation or driver coaching. And finally, IoT-enabled telematics can reduce insurance costs while improving rider experiences.

Whether you are using a fleet of vehicles or a single van, telematics can provide information. You can track the location of your vehicles, see when they are at fault, and calculate penalty points. The data from telematics can even feed into a business intelligence system. In some cases, telematics systems can comprise a telematics control unit (TCU) and a telematics gateway unit (TGU). These devices use microcontroller hardware platforms and have low memory footprints. They also provide limited data throughput and can store offline data for a short time.

For example, telematics auto insurance monitors the driver’s behavior and transmits it to an insurance company. The insurer then analyzes the data and decides whether to lower premiums for drivers with good road safety records. Some insurers even offer lower premiums for drivers who provide telematics data. They may use these telematics systems to track the eating habits of a family and share that information with their health insurance provider.

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How Does Telematics Work?

A telematics system operates by integrating a machine into an asset, including a tracking device or other real-time monitoring tools. The device then gathers critical asset performance information. Once the information is collected, the device sends it to a computer system, where it will be compiled, interpreted, and reviewed.

Data is collected using various methods, including hard-wired or self-fit gadgets and smartphone apps. The system considers multiple factors, such as natural conditions. For instance, telematics may monitor the types of pavements you drive on, the times of day you drive (and associated traffic density), and your cruising pace compared to other users of the same road at the same time of day. This information enables car insurance firms and IoT device managers to produce a driver profile and assign a “risk” rating.

In the specific instance of fleet telematics, the telematics database will keep data in a shared database to be accessed by your fleet control system. Depending on the telematics remedy, this directory may be a cloud-based server or a server/computer on your system. Once the information has been submitted, the service tech can access it through the telematics system’s apps, the specific procedure of which differs based on the telematics remedy used.

Telematics has transformed several industries across the globe, with significant transformations occurring in transportation, building, and site trenching. Firms handling commercial vehicles across various industries have adopted telematics, which has enhanced trustworthiness, boosted service standards, improved efficiency, and strengthened the bottom line.

Telematics gadgets can be implanted in various methods based on their form. A GPS device, for instance, could be installed in a car’s onboard diagnostics (OBD) harbor (making the device easy to set up and offering power whenever the vehicle is active).

Other GPS devices may be implanted elsewhere in the car to make them more challenging to locate and tamper with. These devices might have to be looped into the car’s power source unless they have a separate power supply, like a battery or a solar charger.

Temperature monitoring devices for refrigerated vehicles, for example, may need to be installed in the car’s cold chamber (or have sensors linked to the cold storage area). Joining the telematics gadget into the car’s power supply is typically done as part of a formal setup. Meanwhile, even a non-expert can configure OBD port-mounted gadgets relatively quickly.

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Types of Telematics Systems

Telematics systems can be of one of the following six types:

1. OBD II telematics systems

The OBD-II functionality, required on all United States trucks since 1996, was one of the first innovations for collecting vehicle telematics information. In Europe, the comparable standard is known as European On-Board Diagnostics (EOBD).

Completely plugged-in OBD gadgets have a proven track record and an elevated level of confidence in the industry as a long-running, well-established workaround. Driving information is routinely transferred directly over mobile networks. One can integrate this reasonably priced alternative with smartphone interconnection to improve driver interaction.

2. Bluetooth-powered telematics systems

Telematics gadgets often include self-powered data transmission via Bluetooth in addition to a black box or mobile phone application. These tools, which can be attached to your vehicle’s center console, use Bluetooth to receive and transmit data about your driving patterns to your insurance provider. Bluetooth communications issues can occur at times, but in a broad sense, these gadgets send relevant data to servers that one can then use for on-use insurance programs.

3. Smartphone-based telematics systems

Nowadays, almost everyone owns a smartphone, making data tracking easier. Rather than just a black box, you can use a smartphone-based driver assistance device that requires no setup. Mobile-first telematics gadgets make it easier for the motorist and send reliable information to the insurer, allowing them to create rates based on how you drive.

4. Black box telematics systems

Black box innovation, the accepted standard for usage-based insurance (UBI) initiatives in the United Kingdom, captures and produces a stream of information from engaged vehicles via cellphone connectivity. A fixed electrical gadget black box — securely installed inside the car — collects and transmits precise trip and crash information to a data center.

This approach is prevalent in areas where car theft is commonplace, as it provides an established, tamper-resistant technique for the timely recovery of stolen cars. Nevertheless, these automotive spare devices should be expertly installed in automobiles, resulting in higher building costs.

5. OEM hard-wired telematics systems

Although data retrieved straight from built-in sensor devices eliminates the need for aftermarket setup, market acknowledgment has been hampered by a lack of uniformity among OEMs. 

Anticipate seeing new programs established on this built-in functionality, resulting in super reliable data gathering, novel approaches to oversee driving, and inclusion with driver-assistance capabilities. This will enhance safety and reduce collision severity and frequency.

6. 12v plug-in self-installation telematics systems

These tools are also self-installing, but they connect to the car’s 12v socket. Like OBD gadgets, the information from these devices is as accurate as a hard-wired machine. As with OBD gadgets, a disadvantage of these is if the “technician” does not secure such devices correctly.

The device is susceptible to being knocked around. Furthermore, it may tempt users to disconnect this device to use the 12v connector for another gadget. Some versions include USB plugs on the 12v plug and tamper sensing technology to mitigate these risks.

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Benefits and Challenges of Telematics

The key benefits of using telematics systems include:

• Increase efficiency: Real-time information exchange combined with routing applications can divert motorists away from traffic jams and high-priority loads. Incorporating even a few minutes of commuting time into every driver’s regular hours of service (HOS) can increase overall fleet usage.
• Improve safety: Driver monitoring frequently inspires behaviors consistent with business and regulatory requirements, which can prevent accidents and automotive and freight harm.
• Minimize operating costs: Rescuing even just a few minutes of idling time along with the fleet results in significant gas savings. Good fleet and motorist usage can increase equipment reliability to meet customer needs with current properties. By communicating with motorists via cab-mounted tablet devices, fleet managers can instantly update operators on detours, reroute them around traffic jams and guide them to preferred energy vendors.
• Offer superior driver UX/entertainment: Depending on telematics information, drivers can participate in intra-company digital games to encourage driving efficiencies or establish incentive schemes for motorists who surpass their safety and reliability goals. Off-duty, they could use devices to watch movies, play games, and talk with friends and family.
• Enhance security: One can keep both business and customer information on portable devices, which one can use to establish secure and different containers for corporate data and applications. With this innovation, motorists can still use company-issued devices for information and entertainment during leisure time without jeopardizing the safety of business apps.

However, one should also keep in mind a few challenges faced during telematics adoption:

• Power dependency: Vehicle GPS trackers must be powered to function. Nevertheless, both battery-powered and complex-wired tools have drawbacks. One must charge battery-powered devices regularly to prevent being stuck in an urgent situation with no way to summon help. Hard-wired car trackers power up from the battery pack and can drain it if the wires are not correctly installed.
• Privacy concerns: People are understandably worried about their moves being tracked and recorded on a remote server. Before placing a GPS tracker in a car used by anyone except yourself – whether it’s your wife, kid, or employee – make sure to address any privacy issues they may have by clarifying why you want to configure a tracker and how you plan to use the data.
• Jamming: Sadly, GPS signals can be clogged by devices that interrupt GPS satellite messages. The only way to avoid this is to invest in a telematics system capable of detecting and reporting signal jamming.
• System installation can take some time: Mounting telematics may take roughly 15 minutes to a day. This is because the process may require dismantling and rebuilding the dashboards. Therefore, you should allow specialists to carry out this task on your behalf.
• Cost: Mounting a telematics system is costly, even if the consumer has the skill to do so, since one must purchase hardware and software. Prices vary depending on the global navigation satellite system (GNSS) and GPS. Cellular tracking is the least expensive, costing around $700. Nevertheless, the user must pay approximately $35 per month for online data. In passive wireless monitoring, the hardware costs $700, and the directory and network costs $800. Moreover, the average cost of satellite-based real-time tracking ranges between $5 and $100.

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Top 10 Applications of Telematics 

Telematics has a wide range of applications for the Internet of Things (IoT) — including: 

1. Safety monitoring

Vehicle telematics systems can be a great way to gain insight into driving habits because they monitor and collect data on vehicles. Data from these systems are also helpful for training, as fleet managers can craft data-driven training programs on harsh braking and acceleration to improve driver safety. Insurance firms are also beginning to use telematics information to evaluate potential risks and adjust insurance costs as needed effectively.

2. Communication in real-time

Effective software allows drivers to track and handle, supervise, and test the efficiency of their cars and send operators real-time alerts regarding occurrences, anomalies, breaches, or oncoming risks. Such channels can be consumer-defined and involve related affairs data and texts in and out of the linked operator. You can disconnect a stream and maintain it while maneuvering the rest of the app for essential trips.

3. Detect harsh acceleration or braking

Managers of large-scale connected enterprises and IoT implementations can quickly determine whether their drivers are driving unsafely when vehicle speed and additional accelerometer data are relayed and compiled. The most effective fleet telematics systems include tools for measuring and monitoring driver behavior.

This allows you to investigate events such as harsh braking, excessive acceleration, excessive idling, and more. Drivers must frequently be made aware of their driving behavior’s impact on the fleet’s wellbeing. Companies can share this information with drivers to enable them to better their driving and minimize accidents. Pairing using a telematics solution can ensure that the speed is limited.

4. Vehicle maintenance

One can make improvements by using fleet telematics to analyze hours-of-use statistics and plan regular maintenance, warranty recovery, engine hour monitoring, and service records tracking. Ensuring a high degree of engine diagnostics, such as voltage level, lubrication system, powertrain failures, oxygen sensor concerns, and more, could assist fleet managers in cutting costs while keeping vehicles in satisfactory condition.

Vehicle maintenance can be scheduled automatically based on odometer readings, and repairs can be planned as soon as the system senses an issue with the car. Because of real-time detection, mechanical problems are dealt with immediately, stopping severe issues from arising subsequently.

5. A risk assessment by insurance companies

Vehicle telematics is increasingly popular with insurance companies to monitor driver behavior and help them predict risk factors, adjusting premiums and deductibles. These devices include GPS technology and other sensor systems to issue data not usually documented by vehicle sensors. Information is captured on a server before being transferred to the user’s computer.

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6. Logging fuel consumption

Telematics can help fleet managers identify sources of wastage, such as fuel leakage, and fix them very fast, enhancing fuel economy. It can also help the management prepare the most logical route for each driver to improve fuel efficiency. Specific telematics systems can also link fleet managers with drivers in real-time via texts, allowing drivers to divert smoothly in a traffic jam.

7. Monitoring weather conditions

Another novel application of vehicle telematics solutions is the use of cameras to monitor real-time weather conditions on the road. Various telematics technologies enable safer and automated cars, which is fantastic.

One of the most effective technologies for protecting drivers is emergency warning systems that include weather alerts. Numerous weather conditions can cause driving hazards, and real-time weather analytics in cars aids in driver safety.

8. Assist with performance and training

Telematics companies can provide backend tracking of motorist routes. According to Ted Lee, Head of Business Development and Product Innovation for Magellan GPS, backend surveillance allows driver performance to be recorded and monitored to provide additional training.

9. Monitoring trailers and quasi assets

GPS devices can be attached to trailers and other non-motorized property by fleets to ensure they don’t go lacking, and one could also use them to guide drivers directly to stationary trailers. When unhitching a car, truckers can trace places on their GPS device. Those coordinates can be quickly passed on, allowing them to route directly to the trailer. If a trailer or piece of equipment is relocated without permission, the system can be configured to submit real-time notifications to an owner’s smartphone.

10. Beyond standard geofencing

Geofencing is a digital fence that is built around a geographical place, such as the borders of a town or construction site. The stakeholders who established these will receive notifications when automobiles or investments cross the hidden geofence frontier. Some companies have set up geofences across tollways. The backend often understands when a company car pays a toll and can instantly start the reporting and processing operations. This saves the company time chasing down the levies drivers pay and ensures that the corporate expense is considered.

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Takeaway 

Telematics is rapidly becoming a staple in modern vehicular systems (both consumer and commercial) and will one day be the building blocks of smart cities. A 2020 survey in the U.S. by insurance provider Nationwide found that 65% of consumers would be interested in installing a telematics device if it led to cost savings.

As user resistance declines and IT infrastructure evolves to accommodate new forms of data analysis, telematics could see widespread adoption in the next few years. 

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