Do you charge for drive time on commercial jobs priced as hrly labor?

[solarken]

Commuting is a part of life, nearly everyone has to do it. If an employee goes to the shop to get the company vehicle, then yes his time starts when he gets to the shop, but in general I don't think the customer is getting (directly ) charged for that employee's time driving from the shop to the job, that is built into the overhead and hourly rate in most cases I would say. At least in my world, 99% of customers are going to balk if you charge them for drive Time for a T&m job that is not service, emergency, or specialty type of work.

Thank you, I agree.

 

[electrofelon]

I am hoping to get as many responses as possible to this, kind of a survey.

For small commercial job, say a 5 day span of work installing conduit and disconnects, etc, with the job quoted per man-hour for labor, no materials:
1. Do you bill from the time your guy(s) arrive in am and start working til the time they are done cleaning up and leaving for the day?
2. Do you bill (and pay your guys) for drive time to and from the site?
3. Regarding (2) above, is there some threshold of drive time that changes the answer? For example, if 1-way drive is 30 minutes? 1 hour? Other?
4. As for truck/gas costs, do you add into overhead and incorporate into the hrly man-hour rate charged for the labor?

I am not asking about many little service calls that may take an hour or 2 at each customer site, which would involve significant driving time relative to onsite work time, I am only talking about going to one site, doing the work, and leaving.

Thanks, Ken

IMO if someone is going to bill for travel time, it should be discussed with the client. If it's say 1.5 hours away, perhaps I would propose something like we charge one way or something like that. Of course it's all going to depend on how bad you want the job, how much closer work you have, etc. my main point is I just think most clients would not be expecting to pay travel time unless it was discussed.

 

[petersonra]

Do lawyers who travel to a courthouse directly from home charge for that travel time?

Some how you have to charge for whatever time you pay your employees. If you are paying them to drive you either have to charge the customer directly or indirectly.

We used to have a customer who complained that we were charging him the same rate for time "worked" as for travel time. He was quite happy when we reduced the travel rate by about 20% while increasing the regular service rate by about 10%, even though the net effect was to increase the total cost. It would not surprise me if he got a bonus for it.

You also have to account for whatever mileage and other expenses accrue. Again, don't have to charge them directly, but the customer is going to foot the bill, one way or the other.

 

[electrofelon]

Do lawyers who travel to a courthouse directly from home charge for that travel time?

. Who knows. I assumed we were talking about electricians.

Some how you have to charge for whatever time you pay your employees. If you are paying them to drive you either have to charge the customer directly or indirectly.

.

Of course, I think we all are aware of that. You can charge your customer double time for your lunch break and less for your regular time, but I'm guessing that won't go over so well

 

[LarryFine]

We used to have a customer who complained that we were charging him the same rate for time "worked" as for travel time.

If you're traveling, it's time you're not working elsewhere, plus you have vehicle expenses.

When I'm working somewhere, they're paying me to not be working somewhere else.

 

[jim dungar]

When I was in sales, the IRS considered my travel from home to my first customer as a commute and therefore not a deductable business expense, even if it was a multi-hour drive.

I was lucky to live less than 1 mile from my office, so I would always go there first each day.

 

[gene6]

However, as electrofelon pointed out, it is likely common in the electrical contractor world that if an employee drives to a shop to pick up a vehicle or materials, that the drive to the shop is not compensated, but the drive from the shop to the jobsite is compensated. But how is that cost allocated on a T&M job that is not a service? Is it built into the overhead within the hourly labor rate, or added hrs tacked onto the on-site timesheet hrs?

The issue is if travel time is added to the onsite work time and billed separately instead of within the hourly rate, then the customer needs to be told that, right?

I suppose there must be some business metric for weighing jobs that are farther away and building that cost into the particular job.
Merit based shops like the one I am in now somewhat follow what organized labor does, that is probably where the tradition comes from.