Quote from: luvrbus on January 19, 2010, 07:56:02 PM
Proably no use to you but Arrow leases their coaches for 500.00 a day for a 44 passenger coach with a 1.38 per mile for insurance and fuel plus if Arrow furnshes the driver it is 300.00 a day for him or her plus expenses.
It seems that Arrow is making a decent profit on that driver. What does a driver get, maybe $150 a day? Arrow has overhead, but the daily and per mile costs help cover that too.
Quote from: belfert
It seems that Arrow is making a decent profit on that driver. What does a driver get, maybe $150 a day? Arrow has overhead, but the daily and per mile costs help cover that too.
OK Brian,
Lets just say Arrow or you or I are in business for profit. (anyone want to let our president in on this! :o Opps sorry I didn't mean to steer this off on a political rant!)
OK now again say $150 in payroll to the driver. Now let's add payroll taxes, workman's comp insurance, drug testing, training (updating, trainer and etc.), and any other hidden costs directly associated with that drivers pay. (WC ins is based on payroll amounts! Fed regs require drug testing before hire and random. Insurance companies require constant training updates of which the driver/trainer wants compensated for the time spent doing so!)
Now these are only the things directly associated with THAT driver. Not other overhead such as the payroll clerk, light bill, phone bill and yada yada yada!
So in the end how much of that $300 is really a profit?
OH wait we're just in this for fun not a profit right? I guess if yer real savy you can go online and find a Chinese driver cheaper! ;)
;D BK ;D
There you go again bryce, letting facts cloud your vision of a brighter future. lol
I understand there are plenty of other expenses in employing anyone, but something would seem to be wrong if if additional payroll costs added up to 100% of the driver's pay. Arrow certainly has other overhead, but Arrow is already getting $800 a day before the bus is driven anywhere.
I have run a business before and I do understand that employing workers costs more than their wages. Now, I never made any profits running my business until I sold it. The business grew so rapidly that every extra penny was put into expansion.
Quote from: belfert
I understand there are plenty of other expenses in employing anyone, but something would seem to be wrong if if additional payroll costs added up to 100% of the driver's pay. Arrow certainly has other overhead, but Arrow is already getting $800 a day before the bus is driven anywhere.
I have run a business before and I do understand that employing workers costs more than their wages. Now, I never made any profits running my business until I sold it. The business grew so rapidly that every extra penny was put into expansion.
OK Brian I didn't say those costs added up to 100% of the drivers pay.
What I did say is most of us in business are in it for a profit! And in order to make a profit, you have to charge more than something costs!
Arrow is one of the largest independent bus companies out there.
Any idea how they got to be one of the biggest out there? They made a
PROFIT! If you don't make a profit while in businees it is best to sell it if you can! FWIW ;)
;D BK ;D
When I was running a division of our business (granted, in telecom not transportation) I used 250% of salary as a guide line to gross employee cost, let alone the price I would charge for an employee. 200% seems reasonable to me. As does $300 for a driver, if you think that could be up to 14 hours. Unless you think that $15/hr or less is a good wage to drive a bus. I have no idea, what does a professional highway coach driver get paid these days?
Brian
We're pretty far afield from the OP's question, but...
Quote from: belfert on January 20, 2010, 10:21:59 AM
I understand there are plenty of other expenses in employing anyone, but something would seem to be wrong if if additional payroll costs added up to 100% of the driver's pay.
In fact, actual salary is almost always less than half of the "loaded cost" of an employee, in almost any industry. IOTW, the cost of insurance, benefits, training, utilities, etc. etc. always adds up to more than what the employee is actually paid. Many people who start businesses underestimate this payroll loading and find themselves in trouble in short order.
If you did it for less in your business, more power to you, but that is definitely not the norm.
Quote from: bevans6 on January 20, 2010, 11:17:41 AM
When I was running a division of our business (granted, in telecom not transportation) I used 250% of salary as a guide line to gross employee cost ...
Q.E.D.
-Sean
http://OurOdyssey.BlogSpot.com (http://ourodyssey.blogspot.com)
Sean and bevans6,
While I realize we did stray off the original posters question.
I was merely trying to make my point to Brian that $300 a day for driver charges were not that far out of line. And as both of you helped confirm it is NOT! Thank you for helping me make my point.
Point being when in business the object is to REMAIN in business by MAKING A PROFIT! ;)
It was not and is not my intention to misdirect this thread any farther away than it already has.
Don & Sheila my sincere apologies to the both of you for stealing your thread! ;)
;D BK ;D
I never said Arrow should make no profit. They are making profit on the driver, daily bus lease, and per mile fee. My employer has given us pretty exact numbers on what it costs per employee above the actual wages (Not including office space, computers, etc.). It costs them from approx 33% to approx 50% or more for payroll costs beyond wages. The amount per employee is not the same across the board because health care is a fixed cost.
My own company never made any profits because we were way undercapitalized. We got into Internet access just as the market was starting to explode. We started with almost nothing in equipment and ended up spending something like $300,000 on equipment in a few years along with moving two times. I did draw a relatively small salary just like my employees, but on paper there was never any profit. My brother and I were co-owners and we decided to sell when we saw that Internet access would become a commodity offered by phone and cable companies.
Bk, it was not your fault I just threw that out so the guy would have some idea on how it was figured my mistake sorry.
Working 120 fulltime employees that I employed for years you factor everthing in like a 401 plan which they have Arrow is not getting rich on a driver.
500 or 800 bucks a day plus mileage on 450,000 dollar bus they are not getting rich there either not like the coach is running 7 days a week 365 days a year.
good luck
Brian, I know you posted this in the other thread, but I am responding here in keeping with the wishes of the administrators.
Quote from: belfert on January 20, 2010, 02:45:18 PM
... My employer has given us pretty exact numbers on what it costs per employee above the actual wages (Not including office space, computers, etc.). It costs them from approx 33% to approx 50% or more for payroll costs beyond wages. The amount per employee is not the same across the board because health care is a fixed cost.
True loaded salary goes above and beyond payroll taxes. You also have to include workers compensation insurance, the additional cost of liability insurance per employee, the cost of initial and ongoing training, as well as sick time and other types of leave, and, yes -- office space and the utilities to support it are also included. When you expand from five employees to ten, they need a place to sit -- that all becomes part of loaded salary. If a company-supplied tool, such as a computer, is required for that person to work, the amortized cost of that asset and its maintenance can also become part of the load. As I said earlier, every business has this issue, although the specific factors change from industry to industry. What goes into the loaded salary of an assembly line worker is different from an office worker which is different from a bus driver. But you have to include all of it when you figure out what to charge for a person's time -- this is why the shop rate at Bob's Diesel is $90 per hour, when the mechanic might only be earning $18 per hour.
These sorts of issues are easily overlooked by the inexperienced, and sometimes even seasoned managers. For example, it takes five full-time personnel to fill one chair 24 hours a day. If you have a business, such as towing, that requires dispatchers, and you have at least one 24/7 need, that will require five employees to handle. As dispatch requirements grow, you can grow incrementally from the five (you don't add five full people for each additional dispatch position), but this is a lower limit.
I don't know enough about Arrow to say definitively whether their costs are in line with their revenues, but experience tells me that it's hard to make a living in the bus business; I'm guessing they are not rolling in excess profits. But I do know that what you said about their costs not being double the driver's pay just doesn't ring true -- I am willing to bet that their costs in fact exceed twice the driver's pay, which is consistent with most industries.
FWIW.
-Sean
http://OurOdyssey.BlogSpot.com (http://ourodyssey.blogspot.com)
When I had employees I never really considered office space, utilities, computers as a cost of an employee. Thar stuff was part of the overheard of running a business. Certainly, FICA, unemployment taxes, worker's comp, and other benefits are employee costs.
Quote from: belfert on January 20, 2010, 04:28:01 PM
When I had employees I never really considered office space, utilities, computers as a cost of an employee.
However, in accounting terms, that is exactly what they are. Moreover, when billing someone else for an employee's time (which is what we were discussing), ALL of these costs must be figured into the bill. Otherwise you'd lose money on every transaction.
Your original assertion was that Arrow could not possibly incur costs equal to or greater than the salary they paid the driver. I (and apparently several others) would refute that assertion. In addition to Arrow's direct payroll costs (taxes, unemployment insurance, etc.) they also must account for sick days, training, drug testing, and all the other items that a driver "costs" them each year but for which they do not directly bill. Those costs
must be apportioned over the entire set of work the driver completes; they don't come from some magic "overhead" account. If they provide the driver with a locker, uniform, trip log, etc. those costs also must be recovered.
Again, I do not know enough about the specifics of Arrow to say one way or the other. But your back-of-the-envelope math leaves a lot out of the equation and unfairly paints them as usurious.
I'm not trying to be argumentative, just fair. I don't have a dog in this race, but Arrow is not here (I assume) to defend themselves.
-Sean
http://OurOdyssey.BlogSpot.com (http://ourodyssey.blogspot.com)
And don't forget the cost of employee turnover.
The coach market sees a lot of turnover, and the ongoing costs of recruitment, advertising, interviewing, as well as the mentioned training, MUST be included, or you won't be in business for long!
Whether you apportion the costs to the driver availability, or bury them into a mileage cost, they have to be included someplace.
And what return on investment do we think is "fair" for this market segment, where the depreciating capital asset, (the motor coach) costs at least $7000 a month in payments, before you turn a wheel one inch or fill the fuel tank?
And how many days a month might the coach sit still, and how many competitors might undercut to unprofitable rates on their way to bankruptcy and leave yours sitting more?
Would you expose your finances to this kind of risk for the same return as a savings bond?
I think not.
happy coaching!
buswarrior
Golleee, but you guys get so serious :).
And about what? How much the driver gets paid? Do we care what the mechanic gets paid? Nope... we just cough up the $85+ per hour to the 'repair' shop... and hope the mechanic actually did what we're getting billed for (in my limited experience, hardly ever).
If the drivers weren't happy, they wouldn't be driving. My trucker buddies have tons more worries (and out-of-pockets) than bus drivers. And do a LOT more labor.
C'mon guys, we drive these crates for free (and for fun)... how bad can it be?
Pardon my silly female take on the argument.
Nellie Wilson
Why do we always seem to think it necessary to include little digs on Obama, China, Reid and others. Seems there are never comments any about our boy Bush who got us into this mess in the first place. Wonder why that is, could there actually be "Fox" fair and balanced in play here?
We really don't need this cheap stuff.
Quote from: gus
Why do we always seem to think it necessary to include little digs on Obama, China, Reid and others. Seems there are never comments any about our boy Bush who got us into this mess in the first place. Wonder why that is, could there actually be "Fox" fair and balanced in play here?
We really don't need this cheap stuff.
Gus,
The Obama remark was a JOKE and I even attempted to make note of it. The China remark was a serious effort to make my point to Mr. Elfert that he was missing some "costs" and you don't just order imported drivers like you do online products!
Reid I didn't mention, nor did I see where anyone else did.
And if dumb-@$# "Dubya" was still in office I'd still be making jokes at him too! (by the way he nor any one single other person "get us into this mess!" It goes back way farther than "Dubya" and it involves way more than one person & "big business" getting us in this mess!)
So grow up and get over it! Sheesh man have a sense of humor.
But since you and Obama do have it all figured out could you enlighten the rest of us? Or at least prove to us he is who he really says he is and that he is really a US citizen and legally eligible to be US PRESIDENT! After all what is he hiding his birth certificate for?
And for all others besides Gus I apologize for even stooping to answer too him and his political ranting!
;D BK ;D
Get a life Gus,I never watched FOX in my life till you started in on Fox news now I watch it every day no more Katie for me LOL
good luck
The answer as to who brought this economy to it's knees is easy, we all did, does anyone remember back in the early 60's? when your parents wanted a tv, what did they do, did they whip out that little piece of plastic? or did they save up. How many had more than one car, how many needed more than one job? We all brought this on, each one of us did when we forgot how to make that one easy payment to buy something and found out how easily it was to buy on credit, hang the interest, it's just a small thing, right? and how much did that interest cost at the end of the year. Did you ever hear your grandfather say he wanted your father to have a better and easier life than he did? did anyones father say they wanted your life to be better than theirs were? The only problem with that idea is we forgot the responsibility that goes with it. We were asked to do a fundraiser this coming saturday for a family that lost everything in a fire last night, we'll provide the music and are proud to be able to do something to help them but it brings to mind how close many of us are to feeding the wolf at the door.
Cody, good for you to provide the music at the fundraiser. You make it thump!!!
Back to the OP. There is tremendous overhead in business, like BK said. When I am looking at a job, I try to add in a significant bit of extra, simply because of other expenses. They expenses always go up, not down.
God bless,
John
Back in the early days when I was first in the industry, if a fellow started a charter bus outfit, and could do the majority of his own preventative maintenance, he'd make some money. Wouldn't get rich, but could keep a roof over his head, groceries on the table, and a little extra to play with.
When he got busy enough to add a second coach, plus a driver, he'd barely break even.
Adding a third coach would bring him back into the black, somewhat
The fourth coach would again create very thin margins - a blown engine could be fatal.
But interestingly, when the fifth coach was added, and following good fiscal policy, the company would be profitable. Often the fifth coach was actually the back-up, with the other four rolling constantly. Subsequent fleet additions, in the same proportions (4:1 or 5:1) kept everyone getting a paycheck.
Not sure if that still holds today, with the sophistication and complexity of the modern intercity coach compared to the (relatively) simple and virtually bullet-proof GMCs of the day.
FWIW & HTH. . .
;)
BK, are you listening to RJ's post? ;)
Great post, RJ. Thanks a lot.
God bless,
John
Quote from: John316 on January 20, 2010, 09:35:39 PM
BK, are you listening to RJ's post? ;)
Great post, RJ. Thanks a lot.
God bless,
John
Yeah, and I'm try'n to learn how to "break even" let alone make any profit! ;D (ya know with it being to much to charge $300 a day fer a driver and all ;))
;D BK ;D
Quote from: belfert on January 20, 2010, 09:32:07 AM
Quote from: luvrbus on January 19, 2010, 07:56:02 PM
Proably no use to you but Arrow leases their coaches for 500.00 a day for a 44 passenger coach with a 1.38 per mile for insurance and fuel plus if Arrow furnshes the driver it is 300.00 a day for him or her plus expenses.
It seems that Arrow is making a decent profit on that driver. What does a driver get, maybe $150 a day? Arrow has overhead, but the daily and per mile costs help cover that too.
Does it really matter how much Arrow charges for a driver when providing your own driver is an option? If you can easily find an an available qualified driver for a cheaper price (including whatever value you place on your extra time and effort), then you have arrived at your actual market price based on supply and demand.
John, we're soft touches for burnouts, especially when small children are involved, I can't remember ever turning down a request for a music fund raiser, we've been doing this several times a year for a long time, it's an easy, fun evening and makes me feel good. This one is especially appropriate for the thread, lol the guy is a school bus driver for the local school district.
Quote from: belfert on January 20, 2010, 10:21:59 AM
I understand there are plenty of other expenses in employing anyone, but something would seem to be wrong if if additional payroll costs added up to 100% of the driver's pay. Arrow certainly has other overhead, but Arrow is already getting $800 a day before the bus is driven anywhere.
You're looking at it like a hobbyist. You bought a coach which was no longer in service, you do your work instead of paying for a shop full of every tool that you might need and enough mechanics to handle most emergencies, and you don't have the massive amount of government paperwork to deal with.
Consider:
1) They can't send out a coach which doesn't exist. Someone had to build it. Someone had to pay for it being built. Someone has to make sure it's ready for the trip. Someone has to pay the insurance. Someone has to pay for the property taxes, the weight fees, the registration, the permits to operate in various towns, etc.
2) All of those costs must be paid whether the coach turns a wheel or not, just to have it available when needed.
3) If those costs average out to, say, $1000 per week over the coach's service life, that means that the coach MUST run two days each week to break even (no profit and NONE of the other overhead covered). Just so you know, an intercity coach costs at least a QUARTER OF A MILLION DOLLARS, twice what a top-of-the-line Freightliner tractor costs, and the payment on that Freightliner is FIVE HUNDRED DOLLARS PER WEEK, so that $1000 may be a low guess -- and we're already talking about running the coach nearly 1/3 of the time just to cover the cost of the thing existing -- add fuel, tolls.etc, and you are up to another $1000, so that means it needs to run 4 days out of each 7, just to pay the expenses. And the coach is good for maybe 10 years, so about the time you get one paid off, you're ordering the replacement, and hoping to find someone who will buy the expended one -- either a church, local government, B (or C) level operator, or a busnut who wants to convert into a motor home or an entertainer. Something like one coach in ten is SCRAPPED because it's worth more as parts and shredded metal.
4) In order to have a reasonable chance to actually have a coach available when someone wants one, they have to have several in reserve, close enough to bring into town -- they can't just call up the factory and say "I'll take another one on Wednesday," If the needed coach is at a different yard, it has to be brought into town (and the transfer costs also come out of that $500). If the coach is too far away, they may find themselves actually losing money on a trip being made for a customer that they don't dare say "sorry" to!
When you look at ONE coach and ONE driver for ONE day, it looks like the company is getting rich. If you look at the big picture, though, you see that the costs are staggering, and the profits not all that great. That's why we don't all own bus companies.
Hey Cody and RJ, great posts. It is so true about the ratio of units to profit , break even and loose money. In todays standard 800 bucks a day seems reasonable to me though. Try to keep your expenses down and put an older bus in service that one can actually afford ,and everyone will want to ride the new shiny one. It's all relavant.
Grant
BG6
Great expansion on the simple explanation I posted earlier, with one exception:
The average selling prices of a new MCI model J4500, their best seller, is $490,000 - 520,000. Got that info direct from Marshall Deems, Used Coach Sales Manager at MCI's CA facility.
So an operator REALLY has to run the wheels off the thing in order to just make the monthly strokes!!
FWIW & HTH. . .
;)
BK,
You make a pretty good case and then go into the same old rant about Obama's birth certificate. This is the same garbage almost word for word from Fox World and their like. I have a hard time believing these digs are jokes.
I'm pretty sure I have grown up by now.
It is amusing that when I object to the constant right wing ranting on this forum I'm accused of "ranting"??
In my opinion, when anyone takes cheap shots about politics (or any controversial subject) in a serious thread, you're working to derail the thread. If it's deliberate, then it's a conscious attack on either the subject or the writer. If it's not deliberate, then it's being disrespectful. Either way, it's not nice and not helpful.
Unless you have more to say on the original subject, I'd suggest not saying anything at all. This isn't the off-topic section, after all.
Nusa -
Don't know you from a bar of soap... but Amen on all counts.
Who could possibly give a crap, except for the driver and employer... or the employer/ driver.
Sheesh.
Nellie Wilson
about $20 per person, each person(mostly) couldn't drive all day for less than that in gasoline. Not to mention the savings on pollution of all those vehicles,
Bussing saves money and the environment. :)
I'd like to take a moment to take note that in one of the biggest economic downturns that this country has seen in many years, when companies all over the place are going belly up, BK is expanding and buying more buses, he's hired more drivers and they are busy, forgive me if I'm naive but what does that indicate? To me it may mean that they are doing something right? Could it be that they know what they are doing? LIke many here I've ran companies, owned small companies and still do, money is a pretty elusive comoditiy at times, to suceed when conditions are at their worse tells me that they know what they are doing and if they say someting in regards to business, perhaps a wise person would listen to it, I know I would, I'm never too old to learn.
I tried to stay out of this argument, discussion, but I can't resist throwing a few of my 2 cents in.
We run a small business also. . . and there were many years early on when we worked night and day building it, not pulling in much profit because we, too, were rolling the money back into the business buying tools, vehicles, etc. This went on for a while, but eventually we got to the point where we could hire, and we added guys one at a time.
IMHO, it would be pretty stupid, much less unfair to our customers and to our guys, to try to run the business and not make a profit. Running a business into the ground is turning our back on our customers, and on our employees. The customers have built this business, they trust us, they rely on us, they send their friends and family to us, they NEED us. Our employees have been great. They work hard, they are dependable, kind, they take care of the customers, they have BUILT this business. They have families to support, house payments, car payments, they NEED this job and they NEED us to make sure it's there for them.
If I'm not careful, if I don't make sure we make enough money to "carry" us through the slow times, if I don't keep the insurance and comp and taxes paid, well, I've let everyone down who is relying on us. I've got to have money to replace tools and vehicles too.
If someone wants to run a business as a hobby and not make profit, they don't help anyone much, because it's not permanently sustainable at that. No profit means no taxes paid to help support schools, roads, infrastructure, etc. No profit means no "pad" for downturns in the economy. No profit means no extra purchases or spending to "spread it around". Running a business as a non-profit, hobby, hurts legitimate businesses who plan on being around for the long term, as they have to try to compete with someone who doesn't want to or doesn't know HOW to turn a profit, and will eventually fold or sell out. Then we are left to pick up the pieces, take care of warranty issues, finish the jobs they started, etc.
FINAL WORD: Remember the old term, "American Way" The American Way stood for the freedom to make your own way, including to start a business, make a reasonable profit, expand and grow, employ others and BUILD this country. Small businesses turning a profit and growing truly are a prime example of "The American Way."
Ok, off my soap box :-[ Christy Hicks
Well said Christy for years if I made a 5% net profit I was a happy camper there were a ton of risks for that 5% like the bonding co owning your first born.
Looking back now I would have kept my business under 10 million a year and became a minority contractor more tax breaks and more profit for a business under 10 mil gross
good luck
Quote from: gus on January 20, 2010, 06:12:20 PM
Why do we always seem to think it necessary to include little digs on Obama, China, Reid and others. Seems there are never comments any about our boy Bush who got us into this mess in the first place. Wonder why that is, could there actually be "Fox" fair and balanced in play here?
Or could it be because the current administration has apparently declared war against small and medium-sized businesses of all types, to an extent never seen before? His definition of "wealthy" includes family farmers, truck drivers and people who own tanning salons, because he considers ALL assets when deciding how rich someone is, including home, cars, medical equipment (and prosthetic limbs!), tools, business stock AND ALL LOANS.
Only ONE IN TWELVE of his Cabinet, advisors, "czars" etc have any experience in running a business, except for jobs as kids.
Government ovehead is a legitimate issue when discussing the amount that a bus company charges, because every penny that goes to the gvernment comes from the consumer.
I used to own a semi. My truck payment was less than the operating expenses, and that was back when fuel was $1.50 per gallon. I hear that the Federal taxes on trucks (and probably commercial coaches) have DOUBLED in the past year (and they were already too high). Last I heard, Bush has been out of office this past year, so who should we blame . . .Mickey Mouse?
Quote from: gus
Why do we always seem to think it necessary to include little digs on Obama, China, Reid and others. Seems there are never comments any about our boy Bush who got us into this mess in the first place. Wonder why that is, could there actually be "Fox" fair and balanced in play here?
Quote from: BG6
Bush has been out of office this past year, so who should we blame . . .Mickey Mouse?
I think
it he (Obama) may be GOOFY! ;)
;D BK ;D
;D ;D ;D ;D ;D :o ::) ;D,Ruthi
BK -
By "Goofy," do you mean his state of mind, or do you mean he's actually that 'person?'
Which gets me to wondering: Did he and Mickey ever make up? ; ;)
Nellie
No, it's just the big ears. :D
Nusa,
You won't ever find a post from me that isn't a response to some off the wall right wing political post by another poster.
Someone needs to respond to these cheap digs, 99% of which are not true, to show that not all bus nuts are right wingers. (Well, I sure hope that's true!!)
Now we're getting more childish by making fun of Obama's looks and personality. These are not funny, they are slurs. I don't remember any of this while Bush was in office.
My whole point is that this adolescent stuff does not belong on this board and you will never find it initiated by me.
It would be really nice if posters could comment just on buses without all these slurs, but some don't seem to be able to do that.
Gus, just so as you know, you are not alone, I just keep out of the politics thing on this board as it's one area that I don't find edifying here.
We do have an Off Topic section where we can all display our ignorance and crackpot ideas. Maybe this thread has passed the point when it should have been moved.
ZZ and Lin,
Nothing would make me happier than to see an end to these silly posts so we can stick to buses.
Buses are the one thing we all agree on!!