The revenue drivers are 3-fold
• A set-up fee charged upon the deployment of the solution;
• A monthly subscription fee per registered employee. The fleet manager signs for a yearly subscription, which is renewed yearly;
• Several options are available for a small premium, which will increase the average selling price.
As the financial benefits (savings on insurance) will be 5x the subscription fee, delivering some substantial net savings for a fleet, the penetration should grow as expected.
As the use of application has a demonstrable benefit, it is expected that the churn rate will be low, allowing for an easily predictable growth of the revenues year-on-year.
We aim at getting 9% of the core market: leased cars.
Expanding to other cars (ie through insurance companies) , to other vehicles (ie trucks), to other usages (ie defensive driving monitoring) or to other geographies outside Benelux is considered as an upside vs. the business case.
Annual insurance costs per car are quite expensive, even for fleets: 2500€ on average
* Insurance fares (incl. omnium)
Heavily depending on the fleet size & risk profile: average of 2000€/car
* Insurance excesses in case of accident (50% annual probability)
Usually 2.5% of the car value: 1000€ x 50% = 500€
Insurance companies do offer rebates to fleets putting systems & training in place that reduces the likelihood of car accidents. Avoiding 20% of excesses and getting 10% rebates brings a net saving of 25.000€ for a fleet of 100 vehicles (estimates based on a survey conducted by Edgar Snyder and Associates - a personal injury law firm).
In Belgium, there are ca. 5.6 million cars. The most accessible and therefore core markets are car fleets & leasing. The various leasing companies have more than 341.000 cars (source: Renta). Extrapolated to Benelux based on fleet sizes, this represents more than 700.000 cars being accessible in direct, via leasing and/or insurance companies that will also facilitate further geographic expansion.
There are several initiatives (laws, public campaigns, apps,...) to avoid texting while driving, demonstrating the need for a solution.
Several apps are available for android but we haven't come across one giving the control to fleet managers, as the competition essentially targets individuals on a voluntary basis, and embedding processes to tackle bad behaviors. The situation is even worse for IOS as the specificities of this operating system make ik it more complex to identify and cope with texting while driving. A unique algorithme and a cloud logging of (dis-)connections have circumvented inherent IOS limitations.
Some US States have laws against texting while driving. However, several academic researches have demonstrated that these do not succeed to favorably impact the number of accidents.
As a driver or as a fleet manager, you can go for substitutes to reduce your risk profile. However, those substitutes cost a multiple of Freeedrive.
- Training (200€/driver + 1 day non productivity)
- Safety option packs (750 to 7500€/car)
There is already an annual subscription for Freeedrive at ca. 40€/driver for a fleet of 100