Your Business: High-tech help for transport firms

Steven Newman is driving a GPS/cellular-based system which helps transport companies manage road user charges. Photo / Steven McNicholl

For successful entrepreneurs who have made a good chunk of money at a relatively young age, the next step can be a dilemma.

Steven Newman, former chief executive and co-founder of Navman, knew he did not want to work on another start-up.

He trained as a professional director and looked for a fast growth company instead.

He was introduced to transport technology company EROAD through contacts.

"I was asked to take a look at EROAD and I fell in love with it," says Newman, now the company's chief executive.

EROAD was founded by Brian Michie, an infrastructure economist in 2000. Newman joined the company in November 2007.

"EROAD did not really kick off and start commercialisation until I joined," Newman says.

In 2009, the business launched a network-wide GPS/cellular based road user charges management system for transport companies.

The company is also working with transport authorities on issues such as congestion.

With its hardware and web application, EROAD's advanced solutions help transport companies manage their vehicle fleet, assets and compliance obligation.

EROAD won the most innovative product category and most innovative service category at the 2010 New Zealand Hi-Tech Awards.

"In New Zealand, we've got to be at the stage where we are collecting 15 per cent of all heavy transport road user charges in our system.

"That's not bad for 2.5 years," Newman says.

The technology has been designed for the transport industry, which is looking for solutions.

Road user charges are a billion-dollar tax collection business and $700 million of that comes from heavy transport, for whom road user charges are a significant cost.

Vehicles are getting more efficient. They can cover more distances and there has been an erosion in taxation collection.

Then there is the bigger problem of road congestion.

"Road user charge schemes overseas are looking at more than weight and distance, they are looking at location and time of day," he says.

"If you want to travel at peak times, you get charged accordingly, if you travel at a different time of day and route, it will cost you less."

Newman has taken a 40 plus per cent stakeholding in the company, whose turnover will be more than $10 million this year.

In total, 87 per cent of the company is held by EROAD employees.

One of the things which worked very well at Navman was the employee shareholder plans so Newman has adopted them at EROAD.

"This is a knowledge business - if you are a fast-growing business you can't afford for people to leave," he says.

"What we are doing is not really a job, it's a passion."

Newman has built a high-level management team.

Founder Brian Michie is business development director, responsible for all of global development. He is currently in the US where the company is hoping to establish a base in the next year.

The fellow director who introduced Newman to EROAD, Peter Batcheler, is now its commercial manager. The chairman of the board is Ports of Auckland chief executive Tony Gibson.

With 32 staff at present, Newman expects to hire another 15 this year.

"Our revenue has now caught up with cashflow spend, we can employ more people," he says.

"Two and a half years [after I joined] we were a one-trick pony but what a trick.

"Now we are a broader business, a telematics provider.

"We design, manufacture and install the technology.

"Our percentage growth in the last 24 months has been 2800 per cent."