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| Subject - Tech owned service vehicle compensation | |
| John A. Peters |
Having a truck, van or other service vehicle like a 4x4 or SUV etc. is prerequisite to working for my company. I am sure that other companies do it differently, such as providing a vehicle. Even though the men get more than one dollar per mile driven (after taxes) whenever they have a big expense like $800 dollars for brakes or a tune-up they feel like they're not getting enough money for use of their vehicle. I wonder if it would be any better to pay them just the per mile fee that the government allocates and set aside the rest of the dollar per mile for use as needed when repairs come up? Anyone have suggestions other than telling me to buy new vehicle for him? |
| zol_man | john, if you go by the guidelines as a company policy, then maintenance is part of your guys responsability. any amount over that and they are getting a bonus. i was rounding all of my guys hours up and then adding another hour or two for fuel and he was still unhappy after a while. as the boss, you are going to have to make the call. i wound up going with a van and reducing the hourly rate. that isnt making my guys happy either. not sure if this helped, carl |
| John A. Peters | Did you end up with a nicer looking vechicle for the same costs or did it cost more when you factor in the reduced labor rates? |
| zol_man | too soon to tell on the cost part, but the van looks much better(professional). Helpers and apprentices either ride in the van or drive there own car to the job site. |
| John A. Peters | If they take there car there is no compensaton, right? |
| MONOLITH | I think this situation (discontentment) occurs almost anytime an employee uses their own vehicle for the company, no matter what the compensation. No matter what you do, there seems to be no escaping that feeling of "I ruined/wore out my personal vehicle for your company". I will say that the $1 per mile you said you are paying is the highest compensation I've seen. In one year that would pay for the the whole vehicle. I personally would be happy with $1 a mile. Add that up and see what the guy gets a year from that. |
| zol_man | John, if it is one jobsite for the day, they are responsible to show up for work at their own expense. |
| wilkie | I am curious why you are not open to company owned vehicles? Do you believe your service vehicles should be well identified with your logo and phone numbers? What about the stocking inventory, is the employee responsible for providing the 4 to 5k of inventory, or do you provide all of that in their vehicle? Is their a strategic reason why you do it this way? |
| MONOLITH | quote: Just want to make sure this doesn't get overlooked....John, how many miles would you say they drive a year? I would think 10 to 15K in the course of a year for a service vehicle is more than possible. |
| stedder | I've always driven my own van and used materials (if not provided) from my own truck stock, could it be the guys I worked for were that good to me? That I didn't mind it? It seems that it goes both ways, if I don't mind using my stuff (tools and materials)and my tires, brakes, fuel, tune ups etc. the boss don't mind throwing some cash my way when possible and replacing a tools or blades or bits that he sees I go thru alot of, of course he dosen't mind me getting side work and using his accounts and borrowing tools I may not have,(although lately I seem to have whatever the job calls for)I guess, WCAGA, or I may be naive and a pushover. 
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| John A. Peters | Truck Costs Van Buy a Truck Job and truck man What a friend says he paid. 2,000 down payment for a new van zero interest 2,500 other = 1K racks, 500 ladders, 1K stock 480 a month payments 100/mo or 900 to 1,500 or 2K year commercial insurance ==== 580 per month What we have been paying to the tech (dollars) 586 February 05 660 January 739 Dec 594 Nov 513 Oct 367 Sep 04 (Vacation) 472 Aug 512 July 575 June 424 May 404 April 487 March 462 Feb 2004 |
| MONOLITH | So that means your vehicles only averaged 6300 miles? Lower than I expected. I'm certain I drive twice that distance a year. |
| John A. Peters | Yes, that is about right or maybe even a little less miles less than that. San Francisco is a very compact city surrounded by the ocean, it really is just a peninsula about seven miles square. We do limit our service area to the city and county of San Francisco, which is all the same thing. We only stock about $300 worth the parts, or so. The vehicles need to be small for easier parking. The houses are shoulder to shoulder and the lots are usually 25 ft wide. Not much room for parking spaces after you deduct the driveway. I prefer to work with man who have the ability to provide and maintain a vehicle. Does anyone have any suggestions on how to satisfy the ongoing problem of the fact that they feel like they are wearing down their vehicle for the company that no matter how much money you compensate them for the use of the vehicle, they still feel that they are wearing down their vehicle for the company? They say the hills and the stop and go are hard on the vehicle. Maybe it is endemic. en·dem·ic (#277;n-d#277;m'#301;k) adj. Prevalent in or peculiar to a particular locality, region, or people: diseases endemic to the tropics. See synonyms at native. |
| MONOLITH | Ahhh. An english lesson and business lesson all in one. It's certainly not a unique problem to San Fransisco John. You might have the issue with hills, but that actual problem really isn't how much wear goes onto the vehicle; it's the psychological aspect of 'hey, that's my own truck you know', and that seems to be prevelant anywhere your business calls home. As an individual who recently drove his own vehicle for a service company, the only way to overcome the issue is to make certain the employee feels like he's gettting enough to offset what's happening to his vehicle; and that is very hard to measure. |
| Romex Racer | You know, this is a very interesting topic for me, I'm very glad JAP brought it up as I've been struggling with this issue. When I was coming up in the trade, I always worked for guys that had their own fleet of vehicles. One guy had 5 old utility body type trucks, another had 7 vans outfitted with shelves and ladder racks... I have been thinking about the most conservative way to expand the business, I pretty much decided to buy a used utility body truck outright, say for $5,000 or so. I have a new 2005 Ford F-350 Diesel utility body and my payments are $600 a month... I do not want to have to make payments on additional vehicles since I don't want that debt service when times are slow, so I figured I'd buy a truck with maybe 60,000 miles for cash, and just pray it didn't eat me alive in repairs. The idea of hiring a guy with his own truck is appealing but it seems a little exploitive, but this may be because I'm ignorant of how widespread this practice is. I recently did a search on various job sites using the term "electrician" and came across serveral ads for electricians that said "must have own truck and tools" and my kneee jerk reaction was "yeah, F-you buddy, if you're in business, where's your trucks?" This may have been a predjudice I have since when I was an electrician, all my employers provided their own vehicles. I was thinking I'd pull some cash out of my business, buy an old truck, spend the next couple of months outfitting it and adding inventory while it sat unused in my driveway, then when conditions were right, hire an electrician and put him in this truck. But if I can get a guy to supply his own truck, this solves a lot of my problems, pay him a milage fee and I'm off the hook for all the other downsides that go along with vehicle ownership. Keep in mind that the milage fee you pay is taxable, pay $1 a mile and the employee really sees maybe .70 a mile... All the other guys can find their own way to the job as that's an employee's duty, to get to the job. Let's get some more feedback on this issue! How prevalent is the practice of requiring an electrician to supply the work truck? What are some common ways to compensate the employee? What are the drawbacks? This is totally brilliant. If I don't have to buy vehicles. I can grow my business much faster. What's your opinion? |
| John A. Peters | Following this route can be a bumpy road. You hire a man with a truck and tools and he can leave just as quickly as you found him, or even compete with you. On the plus side he probably knows what is doing if he has a truck and tools. I would ask him why do you want to work for me instead of being in business for yourself, and check out what he says to see if it makes sense. In my case I do all the estimates, start out the jobs the first day with a man, and meet the inspector for the final. So it's kind of hard for them to take jobs away from me. We also have the DNA policy. I make it clear to my man that just like using DNA to trace blood lines. If the job can be traced back to my company or my advertising then they are my client and my job. It doesn't matter if the current clients tells his neighbor, who talks to somebody at his work and then they refer us to their cousin - that job has a DNA path back to my advertising. The electricians are not allowed to take side jobs in the electrical field within the city and county of San Francisco. That means they still can take side jobs for other trades in my hometown as well as electrical work outside of town, as long as it does not interfere with the company. I.e. not sleepy or tired on Monday, etc. So far my two guys have had to buy newer vehicles when they broke down and every time that happens is a lot of trauma, and comparison studies about buying viruses leasing and so on. but overall I think it's working well. The tend to buy older vehicles, to save money but they break down some times (water pump yesterday) and you can not put graphics on them but 2 of the 3 are willing to use my magnetic signs, since it lets the customer look out the window and wave them in to a parking spot and more. |
| MONOLITH | I think Romex Racer's impression of history is correct. It seems that in the past, companies were much more apt to supply the vehicles for the employees, and use the depreciation and other vehicle related expenses as a tax shelter of sorts. But times are changing; companies are discovering new ways to buff the bottom line, and making employees use their own vehicles is one of them. I can only assume there is in fact financial benefit for the employer in doing this. |
| John A. Peters | At the success day, Patrick told a story out of his past, of having a slow time and as a result he had 3 or 4 trucks parked in his front yard for a while. (Neighbors were looking out of the corners of their eyes) |
| wilkie | We have two 3/4 ton vans. They were both purchased new, covered with our logos, and then loaded with inventory. I am in the process of buying the third van. It will be new as well and when lettered, will be an exact replica of the other two. Why? Because our image is more important to me than squeezing a nickel from Uncle Sam. I don't care what the vans cost really. It is advertising for me, and the only way to make it effective, is to show them the same thing over, and over, and over again. We are bombarding our community with our corporate identity. The community sees our vehicles, not our magnetic signs, all over town. They are seeing our business. We are forced to put our best foot forward. They will always see matching vans, kept hospital grade clean, and an employee in a crisp company uniform operating out of it. The only way we can provide our services is out of a company owned vehicle. I'm not saying some of you can't, all I'm saying is we could not. And of course, we strategically plan for the tax liabilities and/or benefits associated with company vehicles. |
| sparkie2170 | Tricky subject all around. I always used my own tools and van when I worked for other contractors, I knew my stock, I knew my vehicle condition etc. It always worked well for me until one of my last employers stuck me with $3,500 bucks in inventory and mileage that he failed to reimburse. I know, my fault for letting him get that far ahead. From what I've seen as far as friends that have had company service trucks, they always have tools and material for side jobs, (F**k the boss, he's making money on me!), Paycheck+Bar+service truck= Bad news, and most of the time the accelerator has two positions. You always treat a rental car as you would your own, right? However, asking an employee to put a case of 1900s, a bundle of pipe and a couple spools of wire next to his baby seat is asking a bit much. For bigger jobs, I've considered getting a small trailer. Drop it on site, and everything is there. |