What is Telematics? Everything You Need to Know

Reviewed by
Vedant Khamesra
Published date:
November 15, 2022

What is Telematics?

How can you make fleet management go smoother? Whether you’re an owner-operator or a fleet manager, you’ve likely heard of telematics—industry leaders are saying that telematics is the future of the industry, but exactly what is telematics and how does fleet tracking work in the world of telematics? 

The portmanteau word comes from the words telecommunications and informatics. Telematics combines communication technology (like GPS satellites and sensors) and informatics (like data management systems). 

Telematics provide powerful, actionable insights into your operation. Read on to learn more about fleet telematics and how you can incorporate it to help your business grow and thrive.

The History of Telematics

Like GPS, duct tape, and so many modern technologies we use to increase our day-to-day quality of life and efficiency, telematics began as a military invention. 

Global positioning system technology (commonly known as GPS) was developed by the US government at the height of the Cold War. During the same era, the invention of caller ID lit the flame of machine-to-machine (M2M) technology.

It didn’t take long for the wider, non-military applications of GPS to become obvious. By 1993, a rudimentary form of GPS technology was made available for civilians, including businesses like UPS.

Today, GPS, the Internet of Things (or IoT), and cloud and M2M systems combine to enable advanced telematics. This information is useful for a broad swath of the automotive industry, including insurance agencies, delivery and transit businesses, and ride-share or car services.


What Can Telematics Tell You?

You probably already use some form of telematics, like GPS navigation. But telematics is more than mapping. 

In addition to GPS navigation, telematics technology includes sensors that extensively track vehicle and driver performance.

Telematics can provide an array of valuable information for owner-operators and fleet managers, like:

  • The position of individual vehicles at any particular time

  • The average and specific speed of your vehicle or fleet

  • The average and specific idling time of your vehicle or fleet

  • The distance and time of specific trips, or the average distance and time of your fleet’s trips

  • Your drivers’ use of seatbelts

  • Your drivers’ braking and driving habits

  • The average and specific amounts of fuel used by your vehicle or fleet

  • Potential problems with individual vehicles

  • The battery voltage of individual vehicles

  • Engine statistics of individual vehicles

These insights render a comprehensive picture of your operation. That picture will enable you to extend the life of your vehicle or vehicles, ensure your drivers’ safety, and maximize your operation’s efficiency.

How are Telematics Used?

The possibilities that telematics open for owner-operators and fleet managers are far-reaching. Here are just a few examples of the ways that telematics can help you maintain and grow your business.

Strategically Deploy Drivers

Using real-time vehicle tracking, fleet managers can determine the most efficient vehicles to deploy for various tasks.

Let’s take, for example, a laundry pickup and delivery service. When a customer makes a new pickup request, the fleet manager can use telematics to determine which driver is closest to the requested pickup address. Deploying a nearby driver saves time and fuel and keeps drivers and customers satisfied.

Track Driver Safety Trends

With sensors that track speed, braking quality, and even seatbelt use, telematics enables you to ensure your drivers are operating their vehicles safely. 

Establishing a safety performance standard is easy and straightforward with telematics. It empowers you to reward safe driving with bonuses and benefits and address unsafe driving before it leads to fines or accidents.

Preventatively Maintain Vehicles

Save money and time with telematics software that tracks battery voltage, engine statistics, and potential problems with your vehicle or vehicles. Consider these scenarios:

  • A notification on your phone alerts you that your fleet vehicle is due for an oil change.

  • You see that several tires on one of your vehicles are ready to be replaced without even looking at the vehicle itself.

  • Your telematics system tracks the battery life in each of your fleet’s vehicles, so your drivers never have to worry about running out of juice on the road.

Telematics enables preventative vehicle maintenance scheduling and informed decision-making so that you can solve problems before they even arise.

Put Vehicles Back On the Road Faster

Is the telematics system cost worth it? What are some of the benefits of fleet telematics? When unexpected issues arise on the road, drivers using telematic alert systems receive immediate and actionable information.

Telematics systems alert drivers with information about the vehicle and the faulty parts. This includes the amount of time the vehicle can continue to be driven before the problem must be addressed. Some systems even go so far as to inform the driver of the closest mechanic who can quickly replace or repair the part.

When drivers have the information to get their vehicles quickly repaired and back on the road, the entire fleet saves money.

Provide Better Customer Service

Companies and organizations like Amazon, UPS, FedEx, and USPS use GPS fleet tracking technology like telematics to track packages and predict delivery times for customers. Even local food and grocery delivery apps use a telematics solution to let hungry customers know how long they’ll have to wait and where, exactly, their delicious delivery is.

What information can telematics help you share to foster a transparent relationship with satisfied customers?

Benefit From Usage-Based Insurance Programs

UBI programs provide adjusted insurance rates depending on driver performance. How do insurance companies determine a driver’s performance? You guessed it: telematics. 

Insurance agencies increasingly offer better rates for better driving, based on the same metrics a fleet manager can use to determine driver safety, such as:

  • Speed and acceleration 
  • Quality of braking
  • Seatbelt habits
  • Average time of day the vehicle is driven
  • Whether or not a phone is used while the vehicle is driven
  • How far and how often the vehicle is driven

This fleet management software can also help you read driver behavior and fuel usage based on the vehicle data transmitted to the telematics control unit. UBI programs also often include information on best driving practices to ensure their best rates. They use vehicle telematics data to monitor your driving and match it to their standards.

Efficiently Manage Payroll

In the past, fleet managers have used timesheets and job tickets to determine driver hours. This tedious, paperwork-heavy task was rife with potential complications: oversights, miscalculations, misplaced paperwork…

But telematics can track exactly when the driver turned on and off the car, effectively “clocking in” and “clocking out” without any hassle or paperwork.

Have Confidence in Your Security

With built-in GPS trackers that connect directly to your centralized server, you’ll know where every vehicle in your fleet is at any time. 

Focus on the bigger picture of your operation, knowing that you can set lost drivers in the right direction and promptly recover stolen vehicles.

Track Spending

Fuel cards allow drivers to move seamlessly on their routes. With fuel cards designed telematics, you can:

  • Set fuel purchase limits
  • Track overall spending limits
  • Track transactions live


Passive and Active Telematics

All telematics systems rely on data gathered by tracking systems and sensors, but they don’t all store that data the same way. Consider the differences between passive and active telematics:

  • Passive telematics systems gather data and store it locally on the device in the vehicle. To access that data, the driver or fleet manager has to remove the device from the vehicle and upload the data from it to a server.

  • Active telematics systems utilize the cloud or M2M technology to directly communicate their data to a central server. This allows the fleet manager to track vehicles and driver performance in real time.

Passive telematics systems are generally more cost-effective in the short term. However, they incur more costs in the long term. Time spent manually uploading data is time that could be spent more efficiently elsewhere. 

Plus, time-sensitive data, like the exact location of a given vehicle, is only available with active telematics. This information allows you to provide top-notch customer service and have confidence in your fleet’s security. It’s a benefit of telematics you won’t want to miss.

The Future of Telematics

Telematics systems, which are also known as “black box” technology, currently are most often devices that can be installed in your vehicle or vehicles. 

As 5G, artificial intelligence (AI), and the IoT become increasingly evolved and interconnected, telematics systems will become standard-issue automotive features. 

This advancing technology inevitably will lead to exciting new uses and challenges for telematics. Some of these might include: 

  • Self-driving vehicles – Telematics is an essential element of driverless vehicles. Because the automated technology is so new, it requires in-depth monitoring—exactly the kind of task telematics thrives at.

  • Data overload – AI has the capability to filter the granular data telematics provides. This way, fleet managers and owner-operators won’t find themselves overwhelmed by less relevant information. Instead, they’ll see the most important, actionable information available.

  • Privacy concerns – Legislation such as the Data Protection Act, is already in place to protect drivers’ and fleets’ data privacy. Drivers and fleet managers can rely on the data telematics provides without fearing that their privacy will be compromised.

Telematics is already embedded in the automotive industry in so many ways. An explosion of new telematics technology will be exciting but not surprising. But to get the bang for your buck, make sure to pick the right telematics provider.

Telematics and AtoB: Fueling Your Fleet’s Efficiency

At AtoB, we’re excited about GPS fleet tracking because we know it has the potential to make drivers’ and fleet managers’ lives easier, more efficient, and more cost-effective. That’s our mission, too!

By combining the powers of telematics with your AtoB fuel card, you’re leveraging the best technology and the best services available for your vehicle or fleet.

Apply for your AtoB fuel cards today.


Verizon Connect. What is Telematics?


Verisk. Looking at the evolution of telematics.


GeoTab. What is telematics?


Forbes. How Usage-Based Car Insurance Works.


Telematics. Active versus Passive Fleet Tracking Systems.


InsurtechDigital. The future of telematics in an automated world.


Fleet Maintenance. The future of telematics is now.


USA Today. 15 Commercial Products Invented by the Military.


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Reviewed by

Vedant Khamesra

Vedant Khamesra is the driving force behind product management at AtoB. Specializing in strategic partnerships, SMB solutions, and new product development, Vedant seamlessly navigates P&L responsibilities while leading product execution and strategy. He is fueled by AtoB's mission to empower truckers and fleets with intelligent financial tools and services, making their lives easier and more rewarding.

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