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View Full Version : Onsite repairs and the cost of fuel.


ThirdMCC
04-20-2008, 03:37 AM
Ok, the cost of a gallon of gas here is now $3.55, and rising. I get about 20 miles per gallon. Since fuel is going up I am going to have to pass the expense along to my onsite customers. Just wondering what options are best to do this. I have three ideas already.

#1: Start charging a per mile fee. I figure it currently costs me about $0.20/mile to operate my vehicle (fuel only, oil, maintainence, insurance etc are not figured in). If I charge the customer $0.50/mile one way, or $0.25/mile round trip, that will cover my expenses getting there and back, but does nothing for my time. Also, as gas prices rise, I will have to keep adjusting my rates.

#2: Raise my hourly rate by $10/hour. This would cover the cost of fuel for any one hour job within a 25 mile radius, 2 hour job within 50 mile radius, etc. Problem is that if I drive 50 miles for a 1 hour job, then I'm losing money.

#3: Start the hourly rate from the time I leave the shop. I kind of like this option because there is no obvious rate increase or additional charge that my current costomers will observe. I will just inform them of the new policy when they call up for service.

So what do you think? What do you do?

terryriv
04-20-2008, 04:04 AM
Here in the Utica, NY area the gas price is $3.65, and I have already decided on raising rates. We also impose a travel fee based on how far the customer is located away from our shop, if they are located out of the local area that we service.

At one point we were going to charge from the time we left, but many customers told us that they were not happy with previous technicianns because some of the local techs would take their sweet time getting to the job site, and present the customer with a hefty bill.

ThirdMCC
04-20-2008, 04:20 AM
At one point we were going to charge from the time we left, but many customers told us that they were not happy with previous technicianns because some of the local techs would take their sweet time getting to the job site, and present the customer with a hefty bill.

Good point. Ok, how about this, go to Yahoo maps, print out the most direct route, and it will show distance and estimated time. Tell the customer that you will not charge more time than what Yahoo maps shows.

ComputerLife
04-20-2008, 07:50 AM
Good point. Ok, how about this, go to Yahoo maps, print out the most direct route, and it will show distance and estimated time. Tell the customer that you will not charge more time than what Yahoo maps shows.

That is a very good idea.

Love the sig too.

Tucker
04-20-2008, 09:08 AM
Man you think $3.55 is bad, you should try living in the UK. Currently petrol is 1.09 for cheapest 95 octane. Did some converting and that works out at $8.23 per US gallon.

How come we get ripped off for everything?:mad:

Simmy
04-20-2008, 12:36 PM
Man you think $3.55 is bad, you should try living in the UK. Currently petrol is 1.09 for cheapest 95 octane. Did some converting and that works out at $8.23 per US gallon.

How come we get ripped off for everything?:mad:

Tell me about it Tucker :mad: Including insurance (350), MOT (50), road tax (185), petrol (1700), servicing/repair (500) and depreciation (800) it costs me ~35pence per mile to run my car.

I include 10miles free travel for onsite jobs which, now I think about it, is potentially costing me 7 for a 20mile round trip.

If you start charging from the time you leave your premises, please let us know how it goes :) I can't imagine many of my customers liking that policy though.

I personally charge 40 pence per mile for the round trip (if they are outside the 10mile free callout area), which is a fairly standard rate for travel expenses in this country. Could you not get away with charging $0.50/mile for the round trip?

Jory
04-20-2008, 04:07 PM
I start the service call from the time I leave my house. I don't charge for the return trip so they're basically paying me half rate for travel. By the time you factor in travel costs I think it's more than fair.

ThirdMCC
04-20-2008, 04:20 PM
I personally charge 40 pence per mile for the round trip (if they are outside the 10mile free callout area), which is a fairly standard rate for travel expenses in this country. Could you not get away with charging $0.50/mile for the round trip?

I could probably get away with the $0.50/mile round trip a lot easier than $1/mile one way, even though mathematically it works out the same. It just sticks in the customers mind that $0.50 is less than $1. Like Starbucks calling a small cup of coffee a "Tall". :-)

One question I have for you: If your customer is 30 miles away, do you charge them for the full 30 miles or do you charge them for 20 miles, since you offer a 10 mile free callout area?

ThirdMCC
04-20-2008, 04:25 PM
I start the service call from the time I leave my house. I don't charge for the return trip so they're basically paying me half rate for travel. By the time you factor in travel costs I think it's more than fair.

Yeah, that's about what I was thinking as well. Have you had complaints from customers, or do they understand?

JohnG
04-20-2008, 04:25 PM
I don't charge within a 10 mile radius. Outside of that, here in the US, I use the fuel allowance standard that is set by the IRS (infernal revenue service), currently 50.5 cents per mile. You can find this info on their site, I would post the link if I could...irs dot gov, then search standard mileage rate.

Jory
04-20-2008, 04:58 PM
Yeah, that's about what I was thinking as well. Have you had complaints from customers, or do they understand?

I've never had any complaints. I explain it to them on the first call and after that they know what to expect, but I don't live in an area with traffic so it's always going to take me the same amount of time to get there give or take a few minutes.

I could see the inconsistency with invoices being a problem if you have to deal with traffic. If it took you an hour to get somewhere it normally takes you 15 minutes they're probably not going to be happy with an unexpected 45 minutes on their bill. In that case I'd have to find some type of compromise based on their location rather than how long it takes me to get there, and average it out so they pay the same every time. You might take a big hit on trip time occasionally, but it should balance out with the short trips.

TechnoKelvin
04-20-2008, 04:59 PM
I guess I may be alone here but with how much you can charge for your services, gas is included. What I mean is this.

I charge $99.99 for data recovery if I come to your house and pick up your computer. If you make me stay at your house to fix it I charge $199.99 because I have to sit there for however long to get it done as opposed to taking it home I can get so much done and still get the job done.

I charge flat fee's by the way.

Thing is, if they live far away (Within reason of course) I don't charge them differently. For others with flat fee's I think you may understand. If you charge $199.99 for data recovery on site and you happen to get it done within 2 hours, you get $100.00 an hour. If you get it done within an hour you get $199.99 an hour. You get my drift.

It's not so much skill but circumstance. How fast is their computer? How many files need to be recovered? Etc. You may get lucky and finish in 2 hours or finish in 6. Just as you may get lucky and only have to drive 5 miles or drive 20.

So my point is instead of making my normal profit I may make less because of gas but same goes for how much time it takes me to finish. It's all circumstance.

NOTE: I have to drive 30 miles south in my county and 10 miles north of my county on a weekly basis because of college so odd's are I'm passing by a customers house anyway.

Simmy
04-20-2008, 05:27 PM
One question I have for you: If your customer is 30 miles away, do you charge them for the full 30 miles or do you charge them for 20 miles, since you offer a 10 mile free callout area?

The latter :) Although I may start charging for the whole distance simply because the travelling time is greater.

I'm glad you started this thread as I have been meaning to rethink my callout pricing. I don't think I could get away with raising my fees with the way the economy is going at the moment.

MrMille
04-21-2008, 08:17 PM
With regard to the speed of the clients computer....
Just my two cents but here goes....
If they won't let you take the machine,
Why should you bear the burden of spending your time on their slow machine? 6 hours!

With regard to travelling, in Dublin, 10 miles could easily take an hour. I had to charge for that time. At first I found this difficult, but then I started coming across customers who were not willing to spend their personal time driving 10 miles to me, so I decided, "Sure! I'll come to you" but I will charge them for it.

It's only fair, you can't rip of your customer, and it's equally important that you don't rip yourself off...by driving to god-knows-where for zilch, nada, squat, zero deniro.

nonchalant
04-26-2008, 03:59 AM
Yup, im about to increase my rate by $10 an hour too. Someones got to pay for the extra overheads. And personally I dont feel too bad about it - I mean everything else has gone up, why shouldnt my prices?

justpcsupport
04-26-2008, 04:49 PM
We currently charge 1.77 a mile 1 way and we use google maps to calculated this. The Technician that goes out gets to keep all of it so they tend to like it, and our customers don't seem to mind it however our rates are 1/3 less than any of our major competitors.