How does vehicle tracking work?

Vehicle tracking in its most basic form simply sends the latitude and longitude information from the device over the mobile phone network. This only uses 4 bytes of data and how often this is updated can be set by the vehicle tracking system. Knowing where a vehicle is at any given time has its own value, depending on what the vehicle is being used for but of course having a wireless data connection between a vehicle and its headquarters or control centre allows other kinds of data to be transmitted too. These include:

  • Speed of the vehicle
  • Fuel consumption
  • How the vehicle is being driven
  • Temperature of its cargo
  • When the ignition is turned on and off
  • Average speed
  • When speed limits are broken
  • Engine status (oil pressure etc)
  • Tyre pressures
  • Route information

Companies and other organisations will have different requirements for their vehicle tracking application which will determine how many data points they collect and the amount of data being transmitted. Some vehicle tracking systems may also include a Bluetooth transceiver to allow delivery drivers to process credit card payments from customers through the system. Other vehicle tracking systems include dashcams, providing views of the road and within the cab. Studies in the USA have shown that dashcams, when combined with driver coaching can reduce safety related events by 52%. Drivers can also collect proof of delivery documents electronically and send these before moving on to the next job. What started as simply a technology to know the location of a vehicle has led to additional applications making use of the mobile network connection.

How does vehicle tracking work in detail?

  • The on-board device stores the information about its position before sending it via the mobile phone network to a secure server.
  • The vehicle tracking system presents this data in graphic, word and table formats to the business owner who can then view the information over the vehicle tracking system with the vehicle position overlaid on a digital map.
  • Vehicle tracking devices include accelerometers along with taking inputs from the engine management system and from the CANBUS interface. CANBUS monitors many data points in the vehicle such:
    • Fuel consumption
    • Idling time
    • Oil pressure
    • Condition of the brakes.
vehicle tracking schematic

How do businesses use vehicle tracking?

Broadly speaking, in two ways:

  • Operations staff can track their fleet of vehicles in near real-time, spotting problems for their drivers, re-routing/scheduling as business needs require, dealing and assisting with incidents such as heavy traffic, breakdowns or accidents.
  • Managerial staff can analyse the collected data for given periods of time and spot trends such as driver performance and vehicle performance. Routing can also be optimised from this analysis. The data collected from the fleet can also inform longer term decisions such as what vehicles to buy next and what routes and customers give the best profit margins.

What are the main benefits of vehicle tracking?

Every business owning and operating vehicles will see the benefits of a vehicle tracking system in a way that makes sense to them. Organisations have different priorities but in every case, whether running a fleet of rental vans or operating a fleet of delivery vehicles you are dealing with an asset. Knowing the location of that asset is a generic requirement, as is knowing the status of the vehicle itself. Other requirements are more specific to the business, for example those companies employing drivers will want to track the driving performance of their employees, spotting harsh acceleration and speeding. Likewise, fuel efficiency is less important for rental companies where the renter is paying for fuel used than it is for companies where fuel is a recurring cost to them.

There are many studies on how businesses and other organisations use vehicle tracking. The main benefits below are considered to be the most important, although their priorities will depend on the organisation using the vehicle tracking system.

Summary of benefits of vehicle tracking

Improving driver safety

Driver safety is of paramount importance to business owners whose staff are driving the vehicles. Studies show that speed is at the core of the road safety problem. Vehicle tracking devices have built-in accelerometers that measure acceleration and braking, showing where drivers are accelerating too hard, cornering too fast or braking too harshly. The data generated by the vehicle tracking system allows management to see which drivers need further training, also providing the basis for rewards and recognition schemes to incentivise drivers. Improving driver behaviour is not just about safety, it also reduces insurance and fuel costs.

Minimising fuel and repair costs

Next to salaries, fuel and vehicle maintenance are the biggest expense items of fleet users. A vehicle tracking system allows owners to understand how their vehicles are being used. The condition of the vehicle, through the CANBUS interface gives visibility of things like oil pressure, brake systems and coolant levels remotely. Routes driven can be continually reviewed and adjusted with the data gathered over time to find the optimal routes for fuel consumption. Operations in real time can also be improved by assigning jobs ‘on the fly’ to the nearest vehicle or re-routing vehicles as contingencies.

Increased productivity

A vehicle tracking system can track how much time is spent loading or unloading at a location, so driver and depot staff productivity can be measured. Productivity can also be improved by the digitisation of workflows with proof of delivery, customs forms and signatures captured electronically. These can be used to streamline back office tasks such as billing and inventory.

Theft recovery and unauthorised use

Vehicles are some of the most valuable assets of any organisation. A vehicle tracking system allows owners and managers to quickly spot unusual or unauthorised use when set against templates on the system of expected use. Features such as geofencing can set limits on calendars, so for example it can be seen if a vehicle is being used by someone at a weekend, spotting unauthorised personal use of a business vehicle by staff. If the vehicle is stolen it can of course be tracked, although professional thieves know where to look for a tracker, backup systems can be hidden anywhere in the vehicle that can be activated in the event of the main tracker being dis-connected. Insurance companies will insist on a tracker being fitted, lower insurance costs will result from the installation of a backup system.


This article provides an insight into how vehicle tracking works and how it can benefit business operations. However there are also some important considerations around data privacy, whether you are tracking your own vehicles or providing rental vehicles to your customers. Our article How can I track my vehicles? provides more detail on what you need to consider to be compliant with data privacy legislation.