Free Miles Why ???

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twinbulls	Free Miles Why ???		Lead	[-]
Posts: 4093 06/23/2008 10:13 Featured Member May 2008 Florida	Tags : None OK I have asked and talked about this many times, But get NO real answer to why we give FREE miles.. Motor Club work is wholesale work right ?? At a lower hook rate ? A lower per mile rate ?? A 30 day to get payed deal ? And they are then going to give you more of it.?? So with all these discounts why then do we still give up free miles ?? When you sit down and know your true costs you start each and every club call at a loss of at least $15 to $25 Because of FREE miles Seems to me they (the Motor Club) make out way better than the tower who does the work.... I tell ya they must have had some GREAT sales people way back when they started this... So I ask in this time of fuel hitting $5 a gallon And trucks costing $ 50K $60K $70k Insurance is Higher every year And we are now getting trained ,Certifed and whatever else we do..... I bet when a new account calls we or they dont ask for FREE miles ..... And if they did we would shot that idea down so fast !! But we still let the MCs do it all day long !! WHY ??? You as a MC tower how would your books look if you had a extra $15 to $20 on every call ??? I bet that would take TONS of preasure off your shoulders... That would put there rate at a better wholesale level ?? So why do you accept FREE miles ??? Is there a secret plan that I don't know or understand ?? Do you offer new accounts free miles ?? and just charge more for hook up ?? I personally think all Free stuff should have the word china stamped on the bottom..... Just a thought I have everyday... Tim Edited for spelling Last Edited By: twinbulls 06/24/2008 09:18. Edited 1 time.
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bigberthastowing		#1	[url]	[-]
Posts: 3336 06/23/2008 18:15	This is what the RA boss says: "- Dead Head Miles- True, most clubs do not pay for dead head miles, however we are not in a position to pay for service time which is not directly associated with our customer. This does not preclude the service provider from arranging local relationships with customers in adjacent cities, potentially minimizing "dead head" or non-revenue unloaded miles. " If you can make any sense out of that, please feel free. If it is not directly associated with the customer, how did you get 25 miles from base to begin with? And the second sentence, well it just bordering the edge of the fringe area. It means nothing. The problem is many read this and derive logic from it. I can't. You have to know what it costs to run your truck per mile. If you don't then go ahead and give them all the free miles you want. Burn up that fuel, drivers time, equipment tires, engine, and on top of getting NOTHING, count on missing a call while you are out there for free spinning your wheels for naught! Big_Berthas_Towing@msn.com www.Big-Berthas-Towing.com
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jal70		#2	[url]	[-]
Posts: 95 06/23/2008 20:21	Tom, My comment was refferring specifically to "dead head" miles which as you are aware primary impact rural towers. If I am not mistaken, twinbulls reference to "free miles" are with the miles typically stated in most motor club contracts in relation to en-route & loaded miles. To be clear on my statement road america pays for mileage "directly" associated with servicing our customers. For rural towers, this would include en-route miles outside of the normal service area (typically 5-10 miles) and the negociated loaded milage rate. Please note that in many rural tows where the vehicle is coming back to your base city there are no "dead head" miles, only in the case where the destination is in the opposite direction of your base. How about those cases where you return with another car loaded after the drop? Or when you can tow 2 vehicles at the same time?? Or when you are on hook for an mc, and you are able to service light road service calls while on the way to final destinations?? Just my opinion of course, but certainly more sides to this story... Regards, Joseph
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FredsTowingnj		#3	[url]	[-]
Posts: 3233 06/23/2008 20:35 Featured Member July 2002 WreckMaster #99805 Traa Ct#8216 Moderator New Jersey	Joseph With all due respect,what a tower does with another car has nothing to do with a motor club call.Isn't it the towers home run if he gets another tow coming back from someone else.Why should a motor club benifit from it.What you motor club reps forget is your just another customer to a towing company.
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jal70		#4	[url]	[-]
Posts: 96 06/23/2008 20:36	Tim, Good news... I believe that I may be able to answer this question you have regarding "free miles". The answer is quite simple, motor clubs have certain budgets we are responsible relative to average claims costs, primary due to our clients wanting to manage their own claims cost. For this reason we manage costs based upon the cost per service type (meaning tow or road-service). The ideal situation would be to negotiate with a towing provider a "flat rate" for all services within his / her area and eliminate any confusion regarding costs or payment problems. Many clubs have attempted flat rate programs which have failed due to the towing industry not accepting this rate model in the US. Therefore, the mc industry has implemented a base rate & mileage model for claims payments, of which "included or free miles" are part of the calculations. At the end of the day you have calculated a certain expense per call and what you need in order to be profitable, no different than the motor clubs. So ultimately, no one is asking you to work for "free" but rather manage your avg. claims cost to be competitive in your respective markets. Hope this helps... Regards, Joseph Licciardi, Road America
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FredsTowingnj		#5	[url]	[-]
Posts: 3234 06/23/2008 20:42 Featured Member July 2002 WreckMaster #99805 Traa Ct#8216 Moderator New Jersey	Joseph Thats a pretty interesting explanation.So tell me this how many hours do you work for FREE for Road America,So they can meet the budget?
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Robert Millsaps		#6	[url]	[-]
Posts: 638 06/23/2008 20:43 Tennessee	I know the clubs call it free miles. But the way I see it is you contract for a base rate and base coverage area. When you go outside of the base area you either charge a to mileage rate or a tow mileage rate. The base is no different than a flat rate tow within a certain radius. We flat rate most of our local tows anyway so it is no big deal for us. There are always exception to the rule. Like when you have bad directions and vehicles are not where they are supposed to be when dispatched. On those we always get additional to mileage. The free mile deal to me is just marketing gimmick, like free or unlimited long distance or text messaging on a cell phone plan. The clubs and commercial accounts I work with pay me my agreed upon rate so I don't see as giving them anything free. The same way as when I pay my cell phone plan for unlimited long distance the cell provider in not giving me anything free I am paying for it. Last Edited By: Robert Millsaps 06/23/2008 20:48. Edited 1 time.
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bigberthastowing		#7	[url]	[-]
Posts: 3337 06/23/2008 22:07	RA: Just to clarify...Should I take a task from you to pick up a vehicle that is say 15 miles out in the Northerly direction. Then tow the vehicle another 25 miles West. The return miles Southeast to base is approximately 30. The contract included 'free' miles are 3 unloaded miles and 3 loaded. I should get paid for 42 unloaded miles and 22 loaded miles plus the hook. Is that the way you see it. Or would you pay 12 miles unloaded and 22 miles loaded? Leaving the 30 miles for the tower to eat? Big_Berthas_Towing@msn.com www.Big-Berthas-Towing.com
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alan407		#8	[url]	[-]
Posts: 650 06/23/2008 22:31	Ya What Fred said about sum's it up.
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twinbulls		#9	[url]	[-]
Posts: 4100 06/24/2008 13:20 Featured Member May 2008 Florida	So Flat Rates are better ?? Ok I can do that any tow within 5 miles of my base is $65 and any tow within 10 miles $85 and 15 miles is $105 I can go on...But I bet thats NOT even close to what a MC wants to pay .... This is my So how do we work out all the pricing issues that are NOW coming to a head.. because of fuel ??? Well I think all Motor clubs need to look at the REAL ,up todate costs of running a tow company... So who do we have to talk to to get the formula changed and get rid of ALL FREE miles....Because we all know nothing is free.... I know its hard to change a train thats moving but if we start now ..You might beable to stay at the top of the club chain in the years to come... I know for a fact that all the clubs been talking about a fuel adjustment increase for over 2 years But thay all just drag there feet... Well 3a did add 15 cents and then put $1 on the customer.. I feel all free miles should be GONE !! Sorry Joe. Bad news, Free miles are not helping anybody but your company undercut the other Motor clubs.. and the tower is expected to eat them.... With Fuel hitting $5 we are NOT going to follow this OLD style plan...Sorry.. time to re work your numbers... Just an idea I had.... Tim
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rssljws3		#10	[url]	[-]
Posts: 42 06/25/2008 07:48	my opinion for what they pay us in tow rates they will make a fortune in the free miles they dont pay us cause they are allready overcharging the repay from there users as it is, so i got to say screw the free mile b/s and time to pull their @#$$ out of our %^* and tell them to go %^$# off and pay us our rates or there going to have to deal with the pissed of consumer when they cant get service to them at a free price, m/c's are scum of the towing industry, we make it up and we need to control what is going on, cause they know at THEIR PRICE we either have to do the calls or what i call no dough no tow, we will still have to except there rate, now with fuel prices exceding the price of gold(thats cheap to what it actually costs), our profession will have to step up as a whole(that means all of us at one not underminding each other), we our the industry not the m/c's
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tlw towing		#11	[url]	[-]
Posts: 71 06/25/2008 08:16	I would Like to see some more money as same as anybody would. But name calling is really not going to get us anywhere. You as an owner just have to make the judgement can I accept what I am Being offered or not. As I have said before the majority of the clubs I work with have stepped up to the plate. One did not and was fired. The motor clubs are going to be part of the towing industry just like brokers are part of trucking so everybody is just going to have to accept that. I agree I would like to see the free miles disappear. But we have to be constructive and not call these companies scum and the sort because they will always be there and we must choose to work with them or not.
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gpwtowing		#12	[url]	[-]
Posts: 24 06/25/2008 11:10	Good point TLW.
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Robert Millsaps		#13	[url]	[-]
Posts: 640 06/25/2008 13:50 Tennessee	It really is not that complicated. I wish the "free" terminology would end but I don't see that happening. It just comes down to covering zones. You contract for an area if you have done business in the area for a while you pretty much know where just about everything is in this area. Knowing this you know how many miles you will be covering and what kind of time it will take to complete most calls. Being that most clubs do the base "free" mileage and first "free" tow mileage terminology. You factor your knowledge of your coverage area and their base/tow formula and figure what rate you can or cannot accept. Rates are all over the place weather they are retail, club,commercial,ppi,law enforcement or other. Personally I can't see where one tower who says I get $125 for that tow and another says I get $100 for that tow and a third comes in says they get $250 so the other two are too cheap and the ones who contracting them are evil. No different when price shoppers call the $250 guy and they tell them thats their price. The customer has their options, the tower has their options. The business models in this industry vary according to the different companies the work in it and the regions they work in, rural vs.urban, strictly regulated vs. loosely regulated or not regulated at all. This industry has towers who are tow only companies, repair shop subsidized companies, auto dealership subsidized, salvage towers and hobby towers who just want to generate enough revenue to pay for their expenses. If I compare rates with one of my hobby tower competitors I will be higher every time. Do I like this? No. Does he have a right to be in the business of towing? Yes, as long as they meet the same requirements that I do. What is the point for me to get on a soap box and preach to them they are too cheap. Does anyone think that realistically one competitor will raise their prices to appease the other? Do you think Sears is going to raise the price of Craftsman tools just because Snap on or Matco says they are too cheap. It just looks like sour grapes to me if one company can perform a service for 25-50% less than the other and still make profit for another company who is claiming that they are charging more for the same job and getting plenty of work to rag the other company or motor club/commercial account they are working for. And on the flip side it is not good practice for a low ball company to accuse a high end retail company of gouging. But the reality is, it happens way too often. In this industry and many others. Last Edited By: Robert Millsaps 06/25/2008 19:15. Edited 2 times.
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WEBOSLH		#14	[url]	[-]
Posts: 371 06/25/2008 22:03 Indiana	jal70, I am not being difficult but I am confused."....road america pays for milage "directly" associated with servicing our customers". So does that mean from 0 miles to , say 10 those miles aren't directly associated with the customer? Because if they are directly associated with the customer, then those miles need to be paid. After all if I was on my own time and driving the same route, that expense is mine. Now if I get a run from rd amer. on the same route or where ever I am "in the line of duty" performing a service for OUR customer, I wouldn't be committed to anything else enroute except to the customer. Now if those miles are not directly associated with the customer , then I may take another run if one came in close to the route of the rd amer. call because the milage enroute is not directly associated with the customer. It is only relavent. And yes you have seen my profile with rd amer. and you know I have enroute and tow free miles. I have shops in the area that pay milage from zero and never say nothing about it. I also have two mc's that pay milage from zero, so in the light of not paying for "free" miles, I believe it is a way for certain mc's to cut their expense on a run. And if the reason for the free miles is to have an average of the cost of a run from the mc;s side, then why not pay the "free" miles and average that into the equation as the towers have to.We have to enter free or paid milage into the equation. And paid miles certainly helps much more than "free" miles. I'm not being difficult, but as Ron P. said for the forums to be a way of communication, and problem solving. Thanks. Last Edited By: WEBOSLH 06/26/2008 06:58. Edited 2 times.
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bigberthastowing		#15	[url]	[-]
Posts: 3349 06/26/2008 07:47	Would you be surprised to hear that MC's are paid ALL MILES - IN FULL reported to their customer under their road services programs, whom ever that would be (Dodge, Chevrolet, Subaru)? That would include dead-head miles, free miles en-route, free miles towed? I would like to see a CERTIFIED copy of that portion of the contract between the MC and THEIR client that stipulates payments for services rendered. Anyone willing to put that document up? Or, is it just too proprietary? It is important to know where you stand and knowing how the revenue flows in these mysterous contracts for road-side services. I suggest the rates are far better than one would think and the miles are fully compensated. Therein lies the MC profit. Just the facts, Mam'm, Just the facts! Big_Berthas_Towing@msn.com www.Big-Berthas-Towing.com
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COTTON		#16	[url]	[-]
Posts: 4009 06/26/2008 07:59 Featured Member May 2007 T.R.P.L. Past Pres. I.T.R.H.F.M. Regular Member WreckMaster #99908	MCs will never show you their contracts because then, the gig would be up. If you are not part of the solution then you are part of the problem.
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jal70		#17	[url]	[-]
Posts: 100 06/26/2008 08:30	Sterling, Perhaps I am not explaining myself correctly, so let me try a different way to answer your question. If the contracted rates include "free miles" associated with a particular PO, then of course these rates are associated with the customer. However, I believe that many on the boards are missing the concept of "included" miles due the word "free". (except Robert)....... Basically it works like this, service providers are set-up in zones or coverage areas, the motor club needs to maintain certain parameters for service / claims cost within these areas. When we contract a service provider we negotiate rates for base services within his / her service area which are essentially a flat rate (meaning no en-route miles if you are in your normal primary service area)... For Road Services this is quite simple because no loaded miles are involved, however for towing we must negotiate rates which allow us to achieve the projected claims cost for the avg tow per category (ie- light duty, heavy duty, etc.)..... The included loaded miles are simply one method to achieve this goal. However, their are other rate models which are somewhat less popular, but have been used in certain situations. Hope this provides some further clarification. Regards, Joseph
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jal70		#18	[url]	[-]
Posts: 101 06/26/2008 08:45	Tom, I hate to be the fly in the ointment, however your information regarding our client pricing models is inaccurate. Let me clarify this for the board so we have no further confusion. Motor Clubs charge their clients based upon two primary models, risk accounts and pass-through accounts. The risk accounts are charged to the client per active member / per month for a given fee, in these cases we pay claims directly and are "risking" that the usage will not be excessive, very similar to an insurance concept of claims management. As for the covered benefit limit, this is driven by the client, for OEM's this would mean cover in full to nearest dealer, etc. and non-oem accounts may have a fixed benefit limit. The other type of account (pass-through) is when we do not risk the claims exposure, but rather pass the actual claims cost per service to the client with a dispatch fee attached for our services. Again in this model, the client is more sensitve to the claims cost and has certain expectations of avg costs. Unfortunately their is no mystery, but perhaps just misiformation because many in motor clubs apparently are afraid to speak with the towing industry. Hopefully I have proven at least that I am willing to engage in intelligent discussion and debate.
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bigberthastowing		#19	[url]	[-]
Posts: 3350 06/26/2008 10:05	Thank you Joe. My query was more of a question than of actual posted information. We may deduce then that any miles saved by the MC would produce profit in the 'risk' catagory, and keeping down the claims costs in the passive' account results in a positive residual to the MC account? Big_Berthas_Towing@msn.com www.Big-Berthas-Towing.com
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I B X		#20	[url]	[-]
Posts: 339 06/26/2008 12:21	Thanks Joe, Now can you tell us why the benefit limit is starting to become unrealistically low, for example $50.00, given that all other costs in owning/operating an automobile is on the rise? Is it because MCs are in fear of raising the price point and possibly losing a client? Or are they hoping everyone breaks down in front of a tow company that only has to move the vehicle a block?
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