Managing the Financial Side of Commercial Fleets

In a Slow Economy, Driver Violations Increase

Vehicle violations now represent 1-3 percent of total fleet costs. Traffic violation revenues are being used by many jurisdictions to balance budgets. In an era of budget deficits, fleets are discovering a sharp uptick in driver violations.

January 2011, by Mike Antich - Also by this author

Ten years ago, toll violations were an insignificant expense for fleets. Today, it is the second fastest growing cost for fleets. The proliferation of automated tollbooths has dramatically increased the volume of toll violations.

Over the years, many jurisdictions have come to rely on the revenue stream of traffic violations to balance budgets. These jurisdictions engage in aggressive enforcement of traffic and parking violations. A case in point is New York City. Last year alone, New York City issued 2 million parking tickets to commercial vehicles.

Vehicle violations represent 1-3 percent of total fleet costs and vary by fleet depending on the cities and states where vehicles operate. Sometimes driver violations are egregious. It is not uncommon for some drivers to incur as much as $6,000 in tickets on an annual basis. The cheapest ticket in New York City is $35, and if the ticket goes into default, the amount doubles until it caps out at $135. Some scofflaw drivers believe parking tickets are the cost of doing business, especially in New York City. Sometimes the cost of a ticket for double parking is less expensive than parking in a garage. Other times it is expedient because of the lack of parking. At the height of the workday, it is not uncommon to find garages filled. Another reason violations are on the radar screens of fleet managers is due to the aggressive enforcement by municipalities and other jurisdictions.

In today's ever-changing market of growing technology and shrinking government budgets, new toll, parking, speeding, and camera violation regulations are popping up everywhere.

Violations have increased with red light and speed cameras being installed in many areas of the country.

"The municipalities are going to great lengths to enforce the payment of these violations. As a result, we have seen significantly more violations go into collection status and actually handed over to true collection agencies," said Eric Crooks, director of operations, license and title for LeasePlan USA.

There is an increased effort by jurisdictions to go after unpaid tickets, typically as far back as 10 years. "We are also seeing some municipalities starting to tie collection of past due violations to renewal of other vehicles in a client's fleet, business license renewal, collection of taxes, etc.," said Crooks.

Prompting this resurfacing of old tickets is that many states have combined delinquent ticket data into a single database. Many jurisdictions within a state operate independent of the state DMV. Now these jurisdiction databases are being merged into the state DMV database, making it easier to identify and collect on unpaid tickets.

"There are quite a few varying factors as to the increase in violations. The main factor is the current state of the economy, which is forcing municipalities to look for alternative means to generate revenue. In the past, there were many municipalities that would not pursue each and every unpaid violation. But, more and more, they are looking at missed opportunities and going to greater lengths to collect on those unpaid violations, with some municipalities even going back up to 20 years," said Crooks.

Expansion of Camera Use

Red light cameras are used in approximately 481 communities in the U.S. and speed cameras are used in more than 58 jurisdictions, according to the Insurance Institute for Highway Safety (IIHS). According to American Traffic Solutions (ATS), approximately 5,000 photo enforcement cameras are in use, increasing at a rate of 25 percent every year.

Additionally, with technology expanding, it has become very easy to install and monitor drivers through cameras at intersections, toll booths, HOV lanes, etc. "It gives cities more access to what is truly happening on the streets and highways. Most of the cameras being introduced are in high traffic areas and are designed to supplement the work of local police having to perform routine traffic stops. So, it is also viewed as a way to maximize the city's police resources, which are dwindling in some cases," said Crooks.

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