Know your costs
Odds are you’ve taken an Uber ride at some point, or that you’re at least familiar with the ride-sharing concept.
Uber’s convenience makes it a go-to service for me while traveling the United States for work or vacation. My experiences as a rider have largely been pleasant, and I enjoy chatting with drivers and learning about their experiences making a living behind the wheel.
Those conversations over the last couple of years piqued my curiosity about the Uber driver’s experience. As an experiment, I registered this summer as a driver to see the world through an Uber driver’s eyes and get a better understanding of the livelihood these folks say they enjoy.
The experiment offered too many takeaways to share within this column space. But one takeaway I can tie into your business is to know your costs.
Having completed 30 Uber rides in my experiment, I’m guessing a number of drivers simply don’t know or track their costs. As a rider, I frequently hear drivers brag about the money they make each week. What they don’t brag about is their expenses – gas, oil changes, car washes, general maintenance and miscellaneous items or vehicle services – that are fundamental to making a good living as an Uber driver. Based on the gross profit earned during my experiment, I question how anyone can comfortably live as a ride-share driver full time.
Be mindful
The cost-management logic applies to any line of work, including businesses that operate portable plants. Brian Madden, who operates a landscape supply company (Madden Brothers) with his brother, offered some insightful cost-management takeaways during a recent PP&E visit.
In recent years, Madden has observed a number of new companies entering his industry around northern Ohio. He believes some of these entrants simply aren’t aware of the costs associated with running and maintaining portable processing equipment.
“As new guys come into the industry they don’t realize the true cost to run a machine,” Madden says. “The maintenance cost of our tub grinders is expensive. Between a tip and a couple of bolts, you’re at $24 a tip. The machine has 24 teeth on it. If you hit one rock, you can knock 10 of those off.”
So imagine the surprise operators are in for when a major event damages equipment. Some companies also forget to factor in support equipment as an expense, too, when adding a new phase to an existing business.
Cost management was also a central theme during a visit to Cardinal Aggregate, where Phil Eisel downplays renting equipment for contract jobs.
“Most of our jobs on portables are 20,000- to 50,000-ton jobs,” Eisel says. “If you rent a crusher for $25,000 per month on a 25,000-ton job, that’s $1 per ton. That’s not going to work.”
Know your costs. The same goes for any of you doubling as Uber drivers.