The hourly wage is only one part of labor cost.
When operators focus only on hourly wage, they can miss the costs surrounding that wage. Workers’ comp, payroll taxes, overtime, recruiting, training, and turnover all compete for the same reservation revenue.
Chauffeur labor carries expenses and exposure around the wage itself. Payroll taxes, workers’ compensation, overtime, recruiting, training, turnover, and time spent managing the schedule all compete for the revenue generated by the trip.
The pressure can be easy to miss when rates are built around the hourly wage alone. As labor-related costs change, the company may be carrying a larger staffing burden even though the posted wage has barely moved.
- Labor burden beyond wages
- Changing premium exposure
- Staffing decisions that affect margin
One question worth asking
Are you evaluating chauffeur cost by wage alone, or by the full labor burden?