1810 – Vehicle Reimbursement Solutions with Cardata’s Michael Levine

In this episode of the Thoughtful Entrepreneur, your host Josh Elledge speaks with the President of Cardata, Michael Levine.

Levine Wide

Cardata is a B2B SaaS platform changing the game for companies with drivers on the road using their vehicles. They offer a mileage tracking app and a reimbursement platform that ensures drivers are fairly compensated while adhering to local tax laws in the United States and Canada.

Michael compellingly argued against company-owned fleets, citing the high costs and maintenance hassles. He pointed out the advantages for employees, such as the freedom to choose a car that fits their lifestyle and the opportunity to build equity in their vehicle.

Traditional car allowances and reimbursement methods need to be more efficient and challenging. Michael explained how Cardata's platform provides a tax-efficient and customizable solution that caters to the diverse needs of employees based on their mileage and location.

Michael also shared that various industries, including food and beverage, pharmaceutical, medical device, and construction companies, are already benefiting from Cardata's services. The company's recent significant funding round is a testament to its growth potential, with a keen focus on product improvement and brand building.

Key Points from the Episode:

  • Overview of Car Data as a B2B SaaS platform for mileage tracking and reimbursement
  • Comparison of using personal vehicles versus company-owned vehicles for employees
  • Challenges and inefficiencies of traditional car allowances and reimbursement methods
  • Industries utilizing Car Data's services
  • Recent funding round and growth opportunities for Car Data
  • Historical growth and client acquisition strategies
  • User experience and accuracy of mileage tracking for drivers

About Michael Levine:

Michael Levine is a highly accomplished professional in private market transactions and business operations, currently serving as the leader of Spruce Grove Capital (SGC). With a background that originated at Lynx Equity and BDO Canada, he garnered expertise in business valuation and strategic management.

His leadership contributions at Target Canada played a pivotal role in the company's expansion into the Canadian market. In 2021, under Michael's guidance, SGC achieved the acquisition of Cardata, a prominent reimbursement software provider for businesses with employee-owned fleets.

Demonstrating strategic and operational prowess, he tripled Cardata's annual recurring revenue, leading to a majority recapitalization in 2023 with Wavecrest Growth Partners and MassMutual Ventures.

Michael is recognized for his empowering leadership style and cultivates a culture of inclusion, motivation, and continuous improvement within his professional endeavors.

About Cardata:

Established in 1999, Cardata has emerged as a prominent provider of tax-compliant mileage reimbursement software designed for global enterprises.

Specializing in solutions for companies whose employees use personal vehicles for work, Cardata has experienced substantial success, particularly under the leadership of Sheret Ross and Michael Levine.

The company tripled its annual recurring revenue within three years. Backed by strategic growth investments from Wavecrest Growth Partners and MassMutual Ventures, Cardata is well-positioned for continued expansion and innovation.

The company distinguishes itself through its commitment to offering IRS-compliant reimbursement solutions, ensuring that businesses and employees benefit from maximum efficiency and compliance with tax regulations. Cardata stands at the forefront of facilitating streamlined and effective mileage reimbursement processes for its global clientele.

Links Mentioned in this Episode:

Want to learn more? Check out Cardata website at

Check out Cardata on LinkedIn at

Check out Cardata on Twitter at

Check out Cardata on Facebook at

Check out Michael Levine on LinkedIn at

Check out Michael Levine on Instagram at

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Josh (00:00:05) - A thoughtful listener before we get going. Did you know that my company up My has launched more than 200 business podcasts. The host of our shows are amazing leaders and collaborators. Folks I want to connect you with. Maybe you deserve your moment in the spotlight as a guest of one of these amazing shows. Just go to up my, where you can see more than 50 shows that are actively seeking business leader guests like you to celebrate right now in front of their high caliber audiences. Just click on the podcast tab and up my, where you'll see shows like the Optics in Action podcast hosted by the visionary Ryan Weiss, president of EPS. This daily podcast is a treasure trove of insights for anyone in the manufacturing and construction world. Are you a business leader or innovator in these industries? Then Optics in Action is your go to source for stories that inspire and strategies that really work. Ryan and his guests dive deep into the journeys of successful founders, uncovering the secrets to scaling up in today's fast paced business environment.

Josh (00:01:23) - But that's not all. If you are at the helm of a thriving company, Optics in Action is actively seeking guests like you in those industries, leaders who are shaping the future of manufacturing and construction. Share your story, your challenges, and your triumphs with a senior leadership level audience who are eager to learn from your experience. Don't miss this chance to be a part of a community of visionaries. Visit up my Influence Comm, click on the podcast tab and look for optics in action. Whether you're tuning in as a listener or stepping up as a guest, join us in driving the conversation forward. In the world of manufacturing and construction. Your voice matters and we can't wait to amplify it. With us right now. Michael Levine. Michael, you're the president of Car Data. You're found on the web at Carr Datacom. Michael, thank you so much for joining us.

Michael (00:02:25) - Thank you. Thank you for having me.

Josh (00:02:27) - Give us an overview of what car data is.

Michael (00:02:31) - Yeah. Good question. So Car Data is a B2B SaaS platform.

Michael (00:02:36) - We help companies with drivers on the road that use their personal vehicle. So think about a customer, a company that you know their drivers are on the road all day. They're road warriors. It's too difficult to give them fleet cars just because they're not available and they're very expensive. So we've got a mileage tracking app and a reimbursement platform that helps fairly compensate these drivers for the use of their personal car. The easiest way to conceptualize us, I like to say, is we're a payroll company for mileage reimbursement that follows sort of local tax law in both the United States and Canada.

Josh (00:03:08) - Put me through the kind of the logic chain of like, when does it make sense for the company to purchase a vehicle for an employee? Versus when does it make sense for them to just use their POV?

Michael (00:03:22) - I would argue it never make sense to to buy them a vehicle. I think if you it's very old fashioned and there's a lot of, um, like, you know, whether it's shortages or, you know, I think you and I both agree, you're not going to take care of a car that's not yours as much as your own car.

Michael (00:03:36) - So there's a lot of costs associated with just maintenance and wear and tear that you wouldn't have otherwise. You know, similarly, the amount of idle time when you have to terminate an employee or an employee leaves, like the amount of cost is wasted, and just moving that car to a new person, it's pretty astronomical, right? So I would argue there's really no benefit. I think a lot of companies like control over what their employees are driving. And if that is the case, you know, maybe you're a med device company and you want your your sales reps going to, you know, doctor's offices in a nice car, like, like if you want some control over that, I think it makes sense. And maybe you're buying power is so high that the deals are insane. But I don't think that really happens anymore. So really, if your cost conscious and you want to be nimble, I think the reimbursement model makes a lot more sense.

Josh (00:04:21) - What is the advantage for the employee?

Michael (00:04:24) - Um, choice.

Michael (00:04:26) - I mean, they get to drive their own car, they get to build equity in their own car. Um, and they get to choose what they drive. A lot of, you know, we've got a lot of companies that come off lead and, you know, maybe it's like a big, you know, big sedan. It doesn't really fit their lifestyle. They want to drive a minivan because they have kids or, you know, a small crossover. So we're helping them pay for that car. And and they're using it for work. Um, you know, obviously there's a lot of people that like a fleet car from an employee perspective, more often than not, they're like, yeah, this is a great benefit, you know? But it becomes a little difficult to tax from the employee perspective or the employer perspective. So, you know, there's a mixed bag. I'd say there's a spectrum of employees that just say, look, I want to bring my own and I want to get paid to bring my own.

Michael (00:05:02) - And there's a lot that like being given a car because it's just like a benefit they're given out of school and they're like, whoa, this is cool, right? So there's a bit of both, I would say.

Josh (00:05:10) - Yeah. Um, okay. So why I mean, just given what else might exist in the marketplace or without car data, how would this normally operate within a company?

Michael (00:05:23) - Yeah. Good. Really good question. You're usually paying what's called like a flat taxable car allowance. That's like very common. So like let's say you're going to give someone $500 a month to use their car. The problem is most of that or a lot of that goes to tax waste because there's no business mileage to substantiate the payment. It all gets taxed. So really what we can do right is we can go to these companies and say, hey, rather than paying them, you know, $500 after tax, right? Or $500 taxable, why don't you pay them $500 non-taxable? Why don't you pay them 400 taxable or non-taxable? And, you know, you guys have just saved $100 per per payment and you're probably in the same position.

Michael (00:05:59) - The driver is in the same position. Right? So I think there are just very tax inefficient ways to do this. Um, and also it doesn't how do you balance someone who drives 20,000 miles a year to someone who drives 5000 miles? You can't have a lot of difference. It's too cumbersome to have like 50 different allowance tiers. So we actually break it down into both a fixed and a variable component to adjust for the, the, the miles driven. And then I would say the other way is, you know, the IRS publishes a rate every year. It's like it's about $0.67 for 2024, but that's an astronomical reimbursement rate. If you drive 30,000, you know, 40,000 miles, which some people do. You can you can buy a new car every year with your reimbursement, like I don't I think we both agree that's like not really what the intent of it should be. Right? We should be buying you a new car every year. So I think there's a lot of, um, it's just very hard to standardize for the amount of miles driven.

Michael (00:06:53) - And also, how do you compensate people differently in different geographies. Right. Our our reimbursement rate does that. It looks at local fuel costs. It looks at local insurance costs. So it is location specific. And it helps like think about large companies with drivers everywhere. It helps to sort of normalize it and standardize it under one program.

Josh (00:07:10) - Yeah. So what would be some examples of companies that that use car data.

Michael (00:07:15) - So, you know, we've got a relationship with. I don't want to give up too much proprietary information, but sure, there's a there's a couple industries or whatever. Yeah. So food and beverage is a really good sort of opportunity for us. A lot of drivers on the road, we've got some pharmaceutical companies, some medical device companies. Uh, we're fairly highly indexed in like construction. So like building materials, home builders, things like that. I would say, you know, industry wise, like we're fairly agnostic. I think if the you have drivers on the road that drive like let's say more than 10,000 miles a year, like you're a good fit for our platform.

Josh (00:07:49) - Yeah. So, cadet, I want to say congratulations. You just had a really significant funding round, so congratulations on that. Thank you. What is the what does the investment world realize about car data in terms of growth opportunity.

Michael (00:08:04) - Yeah, I think it's um, it's a nice sort of reaffirmation that, I mean, one where we're doing great things for our customers and our employees. Right? So it's nice to get that positive reaffirmation from the market that, you know, we're doing something right. I would say, you know, what it looks like for us is, you know, significant investment in our product, make it better, make it more valuable to our customers, maybe add on more services that help them sort of run their, their reimbursement programs. Um, and, you know, I think just increasing our brand, at the end of the day, we're despite our success, we're still a relatively unknown brand in the market. Right? So and I think a lot of small B2B SaaS companies have the same issue.

Michael (00:08:39) - There's usually a player in the space that's massive and everyone knows. Then there's usually a couple of small players, but they've got to be really scrappy and how they build a brand because they're, you know, they're never going to have never not going to they're never going to have as much money. So I think really our investment is going to go towards making our product much better. And um, and really just trying to build our brand. Yeah.

Josh (00:08:59) - How have you grown historically or, you know, in terms of clients that that you have or that you know, that use car data right now? How does that relationship usually start? Is it 100% inbound at this point? Do you go out in the world and on the biz dev side?

Michael (00:09:15) - Yeah. So we've really grown our business just through net new customer acquisitions. We haven't really gone through the motion of trying to sell them more stuff that we sell. I think we've got a fairly simple offering that it hasn't been generate through new sales, but it's been a lot of like full court press on growing and adding new customers.

Michael (00:09:34) - So that's really been it just, you know, market coverage and adding new deals. We've been fortunate enough to win some large enterprise deals, which has helped move the needle a lot for us. And that's really the plan going forward.

Josh (00:09:44) - Yeah. And then in terms of like how it works for a company, is it how does onboarding work? How does I guess the kind of the cost or, you know, in terms of how someone could implement this and how easy it would be? I don't know if, you know, one concern from a customer might be, oh, my sales, they're going to hate this because we, you know, historically we've just been, you know, just paying them some kind of flat car allowance and now we're going to ask them to, you know, all this variable and tracking and all this other stuff. Can you share maybe a bit about that kind of that onboarding process.

Michael (00:10:23) - Yeah. Change management is kind of the enemy of this industry. I think people understand this makes a lot of sense.

Michael (00:10:28) - Like there's like really no looking at the ROI. And it just makes complete sense that if you're purely looking at this from a financial lens, it makes no sense to to not do something like this. Right? It's just so obvious. But but yes, everything you said are real challenges of like, okay, like how do we make sure? Because you also want to make sure everyone's equally, you know, in the same place. Right. Like a lot of these programs kind of run themselves internally for a long time. And we get sort of to the finish line and we find out, you know, John Smith out in Arkansas somehow making like three grand a month and reimbursements and like, you got to kind of rightsize that. Right. So so I think there's a little bit of that of like, okay, everyone's rate is changing in a way, which is complicated. And yeah, you get a lot of people that have, you know, either, you know, been literally recording their mileage and putting it in a system.

Michael (00:11:17) - And I think it's a natural instinct to round up. Right. Um, especially when it comes to mileage. And now I have to go to an app that tracks you. Right. So change management is 100% the hardest thing we sell against, like no decision is what we usually lose to of like look I like it it makes sense. I just I'm just not going to change right now.

Josh (00:11:36) - And, you know, for someone that's been listed for a conversation, maybe they're doing some searching about car data and they stumbled upon this podcast episode. How does the demo process usually work? Or, you know, if they're in that consideration stage, like what does that usually look like?

Michael (00:11:53) - Yeah, there's a few things, right. Our products a little more complicated than just like here's a software like, you know, go play with it. That's not really that doesn't do it justice. I think there's a lot there's we help you design a policy. This is what a vehicle policy could look like. This is when you have to get your insurance to car data.

Michael (00:12:09) - Right. There's a little bit more to it. Um, there's also a purely an app trial. A lot of customers want to try our app, which is which makes a lot of sense. And then we'll do a bit of a demo of like, okay, what does this system look like? What does the reporting look like? Things like that. Right. So the it's a bit more immersive than just like, hey, like here's a trial freemium trial account, go do it. So we have to walk them through how the system works. You have to walk them through, you know, how the policy design works. Similarly, I think an important element is like actually like running rates of like, hey, give me your participant list. Okay, here's what a payment would look like. Here's what the cost would look. So doing a bit of the ROI analysis often becomes a huge part of the sale process is just like, okay, how much money am I going to save? Are my employees gonna get taken care of in the process? So that's a sort of a, a hidden element of our sales process that is quite complicated, that that takes takes quite a bit of time.

Josh (00:13:03) - Yeah. For someone again who's maybe not in this world. I'm just curious about, you know, who or kind of opportunity in the marketplace. Right. I'm just trying to visualize, you know, who would be, like, the biggest consumers of a, you know, or maybe just generally industry wise, I guess I don't really have a feel for just how big these, these employees who are driving vehicles, just how big of a, uh, force that that can be.

Michael (00:13:33) - Yeah. Look, I think any of your public, you know, food and beverage beer companies, any of your public pharma companies, a lot of them are, are customers of ours or customers of our competitors. I think there's a there are some very large enterprises using solutions like this over fleet. And that's, that's fairly common. So again, like any I would just think about any customer regardless of size. Obviously, like the small small customers, the the dollar value may not make sense because if you're saving like thousands of dollars versus millions of dollars, it's a big difference.

Michael (00:14:05) - Um, yeah. But really, anyone with drivers on the road is a good fit for us. It's very simple. But yeah, like a lot of public companies, a lot of fortune 100 companies are on a reimbursement solution like ours.

Josh (00:14:16) - From a user standpoint, what is the driver having to do?

Michael (00:14:21) - Really just a few things. They're tracking their mileage through our system. They're sort of like letting us know of any changes to their their car, which plays into whether they're taxed or not. And they're typically submitting insurance to us like once every once a year or once every six months, depending on the expiration dates of their policies. To stay in good standing in our program, you just have to make sure your car is current with us, and there are some rules around whether it's tax and submitting insurance to us and submitting mileage once a month. It's not a huge lift.

Josh (00:14:51) - Yeah. Is there I don't know of existing or old ways of doing this, you know, if this is a concern.

Josh (00:14:58) - Right. Uh, like, yeah, I think they're fudging the numbers a little bit. Do we have the opportunity to maybe get a little bit more accurate with what's happening? Yeah.

Michael (00:15:07) - Yeah, I think with the tracking app, it certainly sort of negates some of that. Like, you know, I'm just going to put in a thousand miles and we don't know what it means. Like so it's certainly a natural element of the tracking app is that it is more accurate and less fraudulent in a way. Right. Because I think a lot of companies are just like, maybe it's through a concur or like an expense solution where, you know, you're just submitting X miles without much substantiation. Right? And, you know, how do you I think as soon as you are going to sort of reject or not pay someone for their mileage, the onus is sort of on you to prove whether, you know, it's actually fraudulent. Right? So there is some risk in just denying a blanket payment, right? Because if they come back and show you it's real, you know, it's real and you should pay it, right? So it's a bit of a gray area, right? So I think doing it through an app is a little more like simple.

Josh (00:15:58) - Um, Michael Levine, uh, again, the website car who should be reaching out and what should they be doing.

Michael (00:16:07) - Yeah. Good question. Really good question. Anyone who is like a decision maker at a fairly large enterprise, um, whether it's in finance, tax, air or like any sort of like benefits and compensation, who is, you know, having trouble managing a car program internally, whether fleet or a reimbursement model who just like, wants to offload a lot of that responsibility to us, like we are the ones talking to drivers, we are the ones helping drivers. We're the ones paying drivers. So anyone who feels they don't have great internal fleet management, like should reach out because we we offload a lot or sorry, we take on a lot of that responsibility for you working with drivers, explaining why they're taxed. You know that's really a lot of what we do. Like we're almost service first, technology second in a way. Like we are certainly a technology company, but I think we like to solve problems for our customers with technology and not the other way around.

Michael (00:17:00) - Um, so I think that's, um, really just anyone who's looking to, to simplify and streamline their, their, their vehicle operations.

Josh (00:17:08) - Yeah. Again, website car data, dot SEO, uh, and, uh, right on there. You could book a demo. So do our friend is listening or podcast app. Just click on the show notes. There's a direct link. Otherwise the website car data CEO Michael Levine, president, thank you so much for joining us.

Michael (00:17:26) - Oh my pleasure. Such a pleasure to be with you.

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