Rate Sheets for Motor Clubs...

[TowZone]

07 Dec 2017 13:29

fener6 Wrote:

I know some (most?) people don't like to talk about rates, but I'd like to get some input if anyone is willing. We have added a light duty flat bed to our shipping container business (we own a couple of landolls and do heavy equipment tows with them when not moving containers), and I'd like to get some additional money out of the truck instead of it sitting when not doing container related stuff.

In the larger cities what are the average rates that you guys have negotiated with motor clubs? The rates that I was given from a couple of providers were shocking. Granted these are the standard rates and they say that they are negotiable, but still...how does anyone get by with any of the base rates they are offering...

If someone does a local light duty tow for $100-$120, is it expected that they should offer to do that for MC clubs at $50 or less? What about mileage? Also discount 50% off the normal rate?

Any insight would be helpful so I can properly negotiate terms moving forward.

 

Justfishing said:

No one is going to discuss price with you it is against the law!
On another note you will never receive a fair price from a motor club............my 2 cents.
The world is full of someone who will always try.

 

ESC said:

Something else to consider with the clubs..... they want a discount... but youll end up doing more work for each call.    On a customer call i need name, location, phone number and quick description of the issue. Get there, get it done, get paid on the spot. 

When the clubs call its like pulling teeth to get all of that.  Then wait 10 min, fax or email doesnt come, call in again. Get info, call customer, no answer.  Get to location, find out address was wrong, car is across town.  Or its upside down in a ditch and they just want a winch out.    Complete the service then you have to submit for payment.  A week or two later (if your lucky) a shorted payment comes in.  Then you have to dispute it to get the extra money owed, etc.   Discounting for a club isnt worth it.  Personally, id say double your retail rate if you want to come out ahead of the game.

 

Rod VT said:

It seems that in some urban areas money can be made doing m/c work, but I think it's by completing 3-4 calls an hour that a profit can be found. In areas where you are giving up lots of free miles, towers are more careful about which calls they take, to fill in gaps in their day. In the end though, many towers seem satisfied with "just making it" and have a "job", not a profitable business...

 

fener6 replied:

Thanks for the answers. I think I am going to focus on getting some agreements in place with service shops and dealerships. This would also allow me to schedule additional work for the truck around our container deliveries.

 

@JUSTFISHING @RodVT @ESC

[Ed Johnson]

There is no law that prohibits discussion of prices per se. According to the Federal Trade Commission:

"Price fixing is an agreement (written, verbal, or inferred from conduct) among competitors that raises, lowers, or stabilizes prices or competitive terms. Generally, the antitrust laws require that each company establish prices and other terms on its own, without agreeing with a competitor."   https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust.../price-fixing

 

Some motor clubs have you sign a contract that prohibits you from discussing prices with other tow companies and they scare you into believing you will be dropped if you do so. That contract provision is there to help the motor club get the cheapest prices it can from prospective tow companies. In my area, tow companies are scared to death because of these contracts and fear they will violate antitrust laws and can go to prison if they are caught. I have never heard of a motor club filing criminal charges because a tow company discussed prices.

 

If two or more tow companies discuss prices without any interest in collusion or controlling rates, what violation is there? Mine is a very small tow company in Virginia and I wonder who could be hurt if I found out what another company in another my area or even in another state charges. For years, a major motor club has used a contract that paid the same rates for almost all of their contractors. Since that club is setting rates that everyone must follow, are they violating the law? No! They have a right to offer contracts to anyone they want and anyone who wants to accept their bottom prices is free to do so.

 

If the forum establishes a policy against any form of price discussion, that is the right of the forum and it can penalize anyone who violates that policy. It should be understood however that the FTC and anti-trust laws do not prohibit routine price discussions unless there is criminal intent or agreement.

[TowZone]

Ed, the history of the message board goes back nearly 2 decades. In the first few years there were government agencies that would monitor for such discussions. They did not care if those discussions were specific, and rates which were public such as police towing were not viewed as anti-trust or collusion a word we hear nearly every day now. However those agencies lost funding more than a decade ago, so they do not monitor social media for the small offenses to justify their existence.

 

The worst that can happen or would have happened in the past is for the Motor Club to discontinue the contract. We have eased up on the policy of rate discussion over the years. It was always looking out for members as Tow411 would not have been anything but the venue for such discussions. Like the place 25+ years ago where a group of towers meet and the discussion turned to rates. A dishonest or tower who had a grudge pushed the discussion so he could tape it. That evidence of collusion was turn over to an agency that investigated anti-trust violations. The rest is history that has likely been long forgotten, as I can no longer find the details. Perhaps Michael McGovern remembers the circumstances that surround that event and others.

 

@Michael McGovern @Ed Johnson @JUSTFISHING @ESC @RodVT

[Ed Johnson]

Thank you for your very good response.

[DodgeTowGuy134]

Tow Partners has regional and national "averages" that you can look at regarding the rates for various areas.

[For The Industry]

We are also updating those statistics to be more relevant to your businesses.  I expect you will see a change in how we present the rates and such in July.