Phones swelling as automotive expense

June 13, 1995|By Michael Dresser | Michael Dresser,Sun Staff Writer

Thanks to his cellular phone, John Ryder was able to solve a looming potato crisis yesterday.

As he traveled between Dover, Del., and Millersville, the president of the Metro and Basics grocery chains in Baltimore learned of an impending spud shortage at one of his stores, where they were on sale. Without leaving his car, he was able to arrange with a distributor to rush a supply of potatoes to the store within two hours.

It's because of such capabilities -- and such avid users as Mr. Ryder -- that a national study by PHH Vehicle Management Services has identified cellular phone costs as the fastest-growing vehicle-related business expense, the Hunt Valley-based company announced yesterday.

The PHH study of 400,000 business drivers found that, among those drivers with cellular phones, wireless calling accounted for nearly 25 percent of their total expenses. That made it the second-largest category of expense, behind depreciation costs (39 percent) but more than fuel, which sputtered to a mere 15 percent.

Other categories included insurance and maintenance, both accounting for 7 percent of expenses; licensing and taxation, 3 percent; tires, accidents and miscellaneous, each 1 percent.

PHH said it expected 50 million cellular phone users in the United States by 2000, up from only 10 million in 1993.

"We are seeing a full-throttle acceleration in the number of cellular phones in use across nearly every industry," said Robert Lesch, senior product manager for PHH Vehicle Management Services. "Just a few years ago, the cellular phone was considered an extreme luxury. Today, it is an extreme necessity."

Certainly that's the case for Mr. Ryder. Reached yesterday via his cellular phone, he said he typically makes between 20 and 25 wireless calls a day from his car as he drives from store to store around the metropolitan area.

"Communications in the business world today are so important for the success of a business," Mr. Ryder said. "The advantages are unbelievable."

And in many cases, so are the costs, Mr. Lesch said. He said many companies' cellular bills were "spiraling."

In response, PHH Corp.'s vehicle management unit is offering a program to help companies manage their cellular phone usage.

It does so by offering bulk volume discounts by combining the usage at a company's offices throughout the country.

Mr. Lesch said that local office managers often cut separate deals with regional carriers -- and often choose the wrong plan.

"No one's keeping an eye on it because there's no one central source," he said.

The PHH executive said the company has been offering its cellular telephone management plan for about six months.

Some businessmen are already taking their own steps to limit cellular costs.

Mr. Ryder said that at one time, he had eight executives authorized to carry company cell phones. Now, just he and two senior vice presidents have them.

Even so, he shops aggressively.

"We've kept our costs down by bidding it out," he said. "We've been switching every four months."

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