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Excessive costs of Delivery Driver

WhyTheFace

Hi,

I work for an independent company that requires deliveries to the same 7-8 customers (business to business) every evening. At present we use a taxi driver who charges us a set fee per delivery. The fees are less than what it would be on the meter but in some cases not by much. e.g. One delivery is 10e instead of 13e but he then charges another 10e to drop to another client 500m away from that one. He also charges 10e to return items to our shop at the end of the run.

This is working out around 100e per evening (6-9pm), over 6 days thats around 30k per year which is handy considering this is just a side job for him. But unsustainable for us.

While we are not at the volume yet to justify buying our own vehicle and employing our own driver I'm wondering would we be better off to negotiate an hourly rate instead? He is a reliable driver and represents the company well but we need to somehow cut down this cost.

Would offering someone €20-25 per hour for a 3 hour shift be a better pricing structure. An average shift would require less than 10e in fuel. I am not trying to exploit anyone, just trying to figure out how to get costs under control!

Thanks

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davo10

You can offer, but driver can decline. You are paying for three services, a taxi service, a delivery service and a reliable service. You could argue that the taxi and delivery are in fact the same service, but you are using a taxi which has set fares for passengers/people to deliver a box. This is possibly the most expensive way of doing it but as you said, he is reliable and represents you well.

Why don't you hop into a car and do it yourself?

TheBlock

WhyTheFace wrote: »

Hi,

I work for an independent company that requires deliveries to the same 7-8 customers (business to business) every evening. At present we use a taxi driver who charges us a set fee per delivery. The fees are less than what it would be on the meter but in some cases not by much. e.g. One delivery is 10e instead of 13e but he then charges another 10e to drop to another client 500m away from that one. He also charges 10e to return items to our shop at the end of the run.

This is working out around 100e per evening (6-9pm), over 6 days thats around 30k per year which is handy considering this is just a side job for him. But unsustainable for us.

While we are not at the volume yet to justify buying our own vehicle and employing our own driver I'm wondering would we be better off to negotiate an hourly rate instead? He is a reliable driver and represents the company well but we need to somehow cut down this cost.

Would offering someone €20-25 per hour for a 3 hour shift be a better pricing structure. An average shift would require less than 10e in fuel. I am not trying to exploit anyone, just trying to figure out how to get costs under control!

Thanks

Advertise this as a job in its own right. You'll have people bitig your hand off. Tons of people out there who have there own vehicle and are looking for additional income. Look at what the guys who do Pizza and Chinese work a full nightly shift for. I'd say you could easily half your costs. You are paying a Taxi man to cover his costs High Insurance etc and also for the fact that while hes doing your deliveries hes not picking up fares.

mel123

Just use a courier, pretty sure the courier we use in work is €5 for tracked delivery in ireland. Not sure about evening deliveries however, but its worth ringing a few couriers to get pricing.

ED E

Whats the range? Could this be done by the likes of a Deliveroo?

Jurgen Klopp

mel123 wrote: »

Just use a courier, pretty sure the courier we use in work is €5 for tracked delivery in ireland. Not sure about evening deliveries however, but its worth ringing a few couriers to get pricing.

This

I got a few bits from an Irish seller in eBay recently and it was €5 delivery charge via courier can't remember the company tho

Only thing is maybe you'd need take out a standing contract I dunno

Jurgen Klopp

Tbh tho youd surely get plenty to do 3 hours for €75

Especially if it's cash in the pocket no docket

.G.

Use a courier. I used to do that kind of work years ago and different companies paid me as a courier different rates. Some clients would pay us 5 quid per delivery, others much higher. Call some courier companies and ask them. I was a van courier, if your items are small a bike courier could do it which would probably be cheaper again.

WhyTheFace

It would need to be someone with a van due to delivery size.

90% of deliveries between 6-9pm. Need more than just a drop and run service.

I have told him costs need to reduce by 50%, hopefully we agree on 25-30%.

If not, I will look elsewhere. Advantage of taxi drivers is they can use the taxi lanes but still not worth paying way more than is necessary.

iamtony

If same day delivery is required and at that time in the evening I doubt you will get a much cheaper service. Especially if it's bulky items that need a van. And I bet that service the Taxi driver is supplying is way cheaper than buying a vehicle and paying someone €10 an hour to work for you.
Owner Van drivers are rarely idle these days and make very good money so I'd be very surprised if they would take this on as a nickser after work.

Heebie

Check how much it would cost you to have a proper courier service do the same job. If he's cheaper, then he's a bargain. If he's not, go with the courier who'd actually have insurance to cover your losses if they have a smash etc..

iamtony

Heebie wrote: »

Check how much it would cost you to have a proper courier service do the same job. If he's cheaper, then he's a bargain. If he's not, go with the courier who'd actually have insurance to cover your losses if they have a smash etc..

A Taxi has insurance for carrying parcels etc.

Water John

Lots of retired responsible people would love the contract.
Pity you're not in Cork.

ED E

Water John wrote: »

Lots of retired responsible people would love the contract.
Pity you're not in Cork.

And couldn't do it without adding commercial insurance to their vehicle.

WhyTheFace

Ideally I would like to stay with the taxi driver but he would have to cut his rate.

My main query is, is €100 for 3 hours work a handy number compared to what he would get on the job 6-9 Mon-Fri in Dub City.

Report below shows average earnings is €25/hour which would include peak weekend night hours etc.

https://www.nationaltransport.ie/news/two-new-research-reports-irelands-taxi-sector-published/

He does a good job but €30K+ on delivery is seriously impacting on already slim profits.

iamtony

WhyTheFace wrote: »

Ideally I would like to stay with the taxi driver but he would have to cut his rate.

My main query is, is €100 for 3 hours work a handy number compared to what he would get on the job 6-9 Mon-Fri in Dub City.

Report below shows average earnings is €25/hour which would include peak weekend night hours etc.

https://www.nationaltransport.ie/news/two-new-research-reports-irelands-taxi-sector-published/

He does a good job but €30K+ on delivery is seriously impacting on already slim profits.

As a taxi driver I can tell you that 6-9 weekdays is very busy and the hours you will get all the business travellers going back to the airport from all over the city and you wouldn't have a problem earning that in those hours. Plus if your on a fixed job everyday you need to take into account the previous hour that you can't really take jobs in case they are going in the opposite direction. We wouldn't make that much every hour and some hours you might not make anything at all but the hours your talking about are peak on weekdays.
Think about one job from Sandford ind est to airport at 6 pm(which is a very common job) with a business customer and he will request motorway and its €50 at least for a half hours work.

topcat72

Jurgen Klopp wrote: »

This

I got a few bits from an Irish seller in eBay recently and it was €5 delivery charge via courier can't remember the company tho

Only thing is maybe you'd need take out a standing contract I dunno

Probably GLS - I use them as courier company - they collect from our door, tracked and dependable, €5 per parcel, size no issue.

Jurgen Klopp

topcat72 wrote: »

Probably GLS - I use them as courier company - they collect from our door, tracked and dependable, €5 per parcel, size no issue.

I just checked, it was fastway

Avatar MIA

You've highlighted the main problem already. He's charging an additional fee for dropping another parcel 500m away. That element needs to be looked at.

However, driving 500m parking up, dropping something to reception, waiting on someone to review and sign off on a delivery can take time as well, which is above and beyond what a taxi driver normally does.

With that said you should explore your options. You will find cheaper self employed van drivers, but will you find them as reliable?

WhyTheFace

Avatar MIA wrote: »

You've highlighted the main problem already. He's charging an additional fee for dropping another parcel 500m away. That element needs to be looked at.

However, driving 500m parking up, dropping something to reception, waiting on someone to review and sign off on a delivery can take time as well, which is above and beyond what a taxi driver normally does.

With that said you should explore your options. You will find cheaper self employed van drivers, but will you find them as reliable?

Yes it's the reliability and flexibility which is important. There's no reason why we can't find someone as long as we clearly set out what is expected of them from the beginning. I have brought it up with him in the most genuine way possible. Told him we want to keep him but the costs need to be reduced. He will come back to me with some new figures. Hopefully ones we are both happy with!

harr

Would the company not consider purchasing a second hand van for this type of work and give an employee an extra few quid for dropping off delivery...
Spending 30 grand a year on a taxi is madness and I can't see his dropping his price as it's a busy time of day so he probably would get fairs anyway..
A second hand van with tax and insurance should not cost anymore than 6-7 grand...

Avatar MIA

harr wrote: »

A second hand van with tax and insurance should not cost anymore than 6-7 grand...

That's an idea and give a current employee some overtime, or you could do it yourself or rotate between the two. €30k is a lot to work with.

vandriver

A second hand van with tax and insurance should not cost anymore than 6-7 grand...

Probably 4 hours for an employee@€10 an hour plus employer overhead of prsi and holidays makes nearly 50.
Add the tenner fuel,that's 60.Add 10 a day insurance and tax,that's 70.Add the cost of a reliable van with maintenance and the cost of actually buying it.
I'm not seeing great savings,if anything at all.

vandriver

mel123 wrote: »

Just use a courier, pretty sure the courier we use in work is €5 for tracked delivery in ireland. Not sure about evening deliveries however, but its worth ringing a few couriers to get pricing.

Same day?
Not a hope.

robarmstrong

WhyTheFace wrote: »

Hi,

I work for an independent company that requires deliveries to the same 7-8 customers (business to business) every evening. At present we use a taxi driver who charges us a set fee per delivery. The fees are less than what it would be on the meter but in some cases not by much. e.g. One delivery is 10e instead of 13e but he then charges another 10e to drop to another client 500m away from that one. He also charges 10e to return items to our shop at the end of the run.

This is working out around 100e per evening (6-9pm), over 6 days thats around 30k per year which is handy considering this is just a side job for him. But unsustainable for us.

While we are not at the volume yet to justify buying our own vehicle and employing our own driver I'm wondering would we be better off to negotiate an hourly rate instead? He is a reliable driver and represents the company well but we need to somehow cut down this cost.

Would offering someone €20-25 per hour for a 3 hour shift be a better pricing structure. An average shift would require less than 10e in fuel. I am not trying to exploit anyone, just trying to figure out how to get costs under control!

Thanks

Where are you guys based? Have you tried negotiating with him yet?

Bandana boy

To Be honest , he sounds pretty competitive
You will not get a courier company to come close to this guys rates.
You will not be able to provide this service yourself for those limited hours for any cheaper.

Same day service ,Short window for delivery , held for three hours regardless of number of delivery's.
They are all massive premiums you are looking for in a delivery service.

WhyTheFace

robarmstrong wrote: »

Where are you guys based? Have you tried negotiating with him yet?

Yes. We have told him to come back with a renewed pricing structure. I told him we need to cut by 50% and expect him to reduce by 25%.

Bandana boy wrote: »

To Be honest , he sounds pretty competitive
You will not get a courier company to come close to this guys rates.
You will not be able to provide this service yourself for those limited hours for any cheaper.

Same day service ,Short window for delivery , held for three hours regardless of number of delivery's.
They are all massive premiums you are looking for in a delivery service.

We are looking into sharing the work between existing employees. We could buy a second hand van. Tax & Insurance would be hefty enough but after that our evening costs would be reduced to €40-45e including petrol instead of €100.

mel123

WhyTheFace wrote: »

Yes. We have told him to come back with a renewed pricing structure. I told him we need to cut by 50% and expect him to reduce by 25%.

We are looking into sharing the work between existing employees. We could buy a second hand van. Tax & Insurance would be hefty enough but after that our evening costs would be reduced to €40-45e including petrol instead of €100.

Don't forget maintenance costs of a van - DOE, tyres, road tax etc are all at your cost, not to mention if there is an accident and any claims involved

vandriver

WhyTheFace wrote: »

Yes. We have told him to come back with a renewed pricing structure. I told him we need to cut by 50% and expect him to reduce by 25%.

We are looking into sharing the work between existing employees. We could buy a second hand van. Tax & Insurance would be hefty enough but after that our evening costs would be reduced to €40-45e including petrol instead of €100.

What would it be with tax and insurance included?And all the other van costs(including depreciation)?And employers prsi?
Sound like the plan to 'maybe' buy a van is just a tactic to screw the delivery guy's price.Because if it's a serious attempt to save any significant amount of money you simply haven't accurately and honestly priced the true cost of the exercise.

WhyTheFace

vandriver wrote: »

What would it be with tax and insurance included?And all the other van costs(including depreciation)?And employers prsi?
Sound like the plan to 'maybe' buy a van is just a tactic to screw the delivery guy's price.Because if it's a serious attempt to save any significant amount of money you simply haven't accurately and honestly priced the true cost of the exercise.

I wouldn't say trying to get the best price possible is "screwing" anyone. This guy is getting €25k for a 3 hour evening shift Mon-Fri. On top of his regular taxi work. He was not available last week and made no effort to find a replacement.

There is nothing wrong with using tactics to secure the best price. This is business, not charity.

Avatar MIA

WhyTheFace wrote: »

There is nothing wrong with using tactics to secure the best price. This is business, not charity.

Zero wrong with it.

WhyTheFace wrote: »

I wouldn't say trying to get the best price possible is "screwing" anyone. This guy is getting €25k for a 3 hour evening shift Mon-Fri. On top of his regular taxi work. He was not available last week and made no effort to find a replacement.

If you can get it done cheaper and as reliable, it'll be a job well done.

WhyTheFace wrote: »

There is nothing wrong with using tactics to secure the best price. This is business, not charity.

Zero wrong with it.

WhyTheFace wrote: »

He was not available last week and made no effort to find a replacement.

It's your job to manage this, not a taxi driver. If he left with not warning that's a different story.