(FORTUNE Small Business) – When Bob Jernigan installed GPS devices in half of his company's 20 trucks, the Florida plumbing contractor was simply hoping to route his service technicians more efficiently. Little did he know that the inexpensive gizmos would also help him track tardy contractors, delinquent drivers, balky engines, and more.

Jernigan owns Clearwater-based B&B Professional Plumbing, with annual revenues of about $3 million. For an upfront purchase cost of $4,500 for hardware and monthly maintenance fees of $15 a vehicle, the company's GPS system allows B&B to track vehicle location, speed, fuel consumption, mileage, and engine performance over the Internet.

Devices linked to the orbital satellite network of the Global Positioning System (GPS) have long been used for boat and aircraft navigation and in certain cellphones and vehicle navigation systems such as General Motors' OnStar. GPS is now making inroads into business fleet management. U.S. firms deploy nearly 1.9 million GPS-enabled devices to monitor fleet vehicles, trailers, construction equipment, and mobile workers, up from 1.1 million in 2003, according to the research firm C.J. Driscoll & Associates.

Jernigan chose a GPS product called Networkfleet from Networkcar, a San Diego subsidiary of Reynolds & Reynolds that specializes in wireless networking systems for fleet management. Competing vendors include PeopleNet Communications, Qualcomm, Teletrac, and Xora (see box on page 86). Most products provide basic engine-fault detection along with GPS tracking. Having surveyed the competition, however, Jernigan chose Networkfleet because of its sophisticated interface with factory-installed onboard vehicle computers. That interface allows Networkfleet to generate a wealth of diagnostic data, ranging from hydrocarbon counts to cylinder misfires.

Networkfleet's hardware consists of a silver PDA-sized box installed beneath a vehicle's dash. The box transmits location and performance data over a wireless network to a web-based software application that analyzes the data and posts the results on a secure website. The system also sends Jernigan a direct e-mail whenever it detects an engine problem.

It took only a few hours to get Networkfleet up and running in ten of B&B's 20 vans, Jernigan says. So far the company has been able to trim response times in the GPS-equipped vans by 10% and increase the average number of clients that each van serves each day from four to six. Jernigan plans to equip his entire fleet with the system as older vehicles are replaced by new ones.

Recently the system sent Jernigan an e-mail announcing that one truck had a clogged fuel injector. Armed with this info, Jernigan sent the truck to a mechanic for repair. Jernigan measures Networkfleet's mileage information against fuel purchases to make sure drivers are on the road and not sitting in their vehicles. Routing drivers more efficiently has saved B&B $1,300 a month in fuel costs. As a result of all those savings, Jernigan recouped his GPS investment within about three months.

GPS also offers other benefits. Jernigan received an angry call from a woman who had seen one of B&B's trucks peel out of a bar's parking lot and head for the highway at 80 miles an hour on a Sunday afternoon. Jernigan had no trouble identifying the culprit, even though the caller had failed to note the vehicle's license plate. "I went online, accessed Networkfleet, punched in the date and the approximate time, and there it was: I had the guy," he says. The employee was fired for driving a company vehicle while off duty.

GPS fleet tracking has raised privacy concerns among some fleet drivers. As part of a collective-bargaining negotiation, the Teamsters reached an agreement with United Parcel Service to use GPS equipment for package tracking while prohibiting the use of GPS in employee evaluations. And Boston snowplow drivers marched outside the state capitol a few years ago after the Massachusetts Highway Department ordered them to carry GPS-enabled cellphones as a way of measuring employee productivity. The drivers eventually agreed to carry the phones after the department agreed not to use the equipment to calculate hourly earnings.

Jernigan did not tell his 30 employees about the GPS installation until several months after the fact. Even then he described the device as a "diagnostics system" in order to "tame down the Big Brother effect." But he argues that Networkfleet also protects employees. On one occasion a commercial client accused B&B of failing to show up for a scheduled plumbing installation at the construction site of a new car dealership. Networkfleet data proved that the B&B crew had arrived at the site on time. What's more, the crew had waited nearly an hour for the general contractor, who never showed up. Jernigan charged the client $400 in wages and mileage, and the B&B crew avoided getting caught between their boss and his client.

So far his workers seem comfortable with the new technology. "If you feel GPS is an invasion, then there's something you have to hide," says B&B plumber Chip Hurst. Adds Jernigan: "I'm not really tracking an employee. I'm tracking my truck, an asset that should be driven straight home and parked."

For links to B&B Professional Plumbing, Collegeboxes, and others in these stories and to give feedback, please visit fsb.com.