Driving is not a mundane task. As long as people treat it like that, they will be donating organs and keeping the car body repair industry blooming. Even if we're not using a phone, having a conversation is so distracting that the intense task of keeping a lump of metal hurling along at speeds our brain never was meant to comprehend is severely compromised and chances of an error potentially resulting in a crash are increased close to the same amount as when we're on the phone. Holding the device isn't going to matter much, we're just as screwed if we're concentrating on a passenger or trying to comprehend the squeaking of a hands free kit.
Perceived danger is key here. We tend to think there is no danger in doing this, because none of our senses alert us of anything (possibly) going wrong. Make the seat belts pop loose, let a spike appear from the steering wheel and make the car rumble if drivers appear distracted. That will make them aware they are crossing a line that quickly leads to a situation they can in no way react to in time, if they notice it at all before they have an accident. Their sense of danger will be triggered and they will avoid getting to that point in the future, or or ignore it and become another statistic.