Please advise on drivers pay.

[KCLimos]

I would like input on drivers pay. We are a new company and just started adding drivers. Need to figure out if we should pay flat hourly rate and tips up to customer, or if we should let drivers work for 20% min. tip on every job. Do customers get mad if you have a minimum grat. or do they just expect it? Thanks

Kevin

[limo bill]

I not sure how much you want to pay your drivers, but I can gurantee you your drivers will screw up your cars and still expect to be paid. Nobody will treat your cars like you do. Hey ... I'm just the messenger !!!

[Steve W.]

Most customers will come to expect the gratuity to be included but only because they are calling around and every other company is doing it that way so they think it's normal. So you can try to be diffrent in that reguard but you will have to balance that off of the houly pay you pay your chauffeurs. If you pay them the minimum wage and dont include the gratuity then they will get stiffed sometime and that may lose you a good employee. However if you pay them a fair liveable wage then any tip they get is just gravy. But that means higher expences for you.

Basically comes down to what do you have to do to keep quality people on the payroll. Balance that off with what do you have to do to keep your payroll expences low.

Only customers that may put up a fight about not including the gratuity are corporate customers who do not want thier clients in the car having to worry about any tip or any money for that matter. But retail it's a mixed bag some put up a stink about it and some like that it's there. I would just be very flexable about it. I mean since you are not going to see any of the gratuity anyway just concearn yourself with the hourly rate as that is your money. I would approach it somthing like this:

Customer: How much is your limo per hour?

You: Our limo rents for $60.00 an hour and as it is customary to tip you chauffeur I would be glad to include the standard 20% tip on your bill. However if you would like you can decide the night of the run and tip accordingly.

You will get two responces:
1. Ah just add it and be done with it I dont want to have to figure it out and deal with it.
2. I will take care of the driver myself.

You will then have to include something on your drivers sheet that lets them know they have already been taken care of if that is the case. But if asked by the customer they will probly lie about it anyway saying no they are not recieving a tip in hoes of a mistaken double tip, thats gonna be an issue sometimes no matter witch way you go.

Or you could be very revoloutionalry and be the company that does not accept tips at all!

Check with your local labor boards and make sure your pay structure is legal once you figure it out. Things like paying them for prep time, travel time, overtime and the like.

[KCLimos]

Originally posted by limo bill:
I not sure how much you want to pay your drivers, but I can gurantee you your drivers will screw up your cars and still expect to be paid. Nobody will treat your cars like you do. Hey ... I'm just the messenger !!!

Thats what I want to figure out. What is considered good hourly pay with an optional tip that will keep good workers happy. Anyone in the mid-west doing it this way? Your expertise would be a big help.

[TxLimoGuy]

Pay methods vary around the country. Opinions about what is 'best' vary from person to person on this forum. Use the search button to find many previous discussions on this topic.

Before someone even thinks about starting up they should have known two things about the local competition, all easily answered with some phone calls:

1) What method do they use to pay (ie straight salary, pre-charged gratuity, no gratuity, etc)
2) How much is the gross hourly rate
3) What they charge per hour for various vehicles.

Answer to number one and two will assist you in answering the best method to pay your folks in your local market.

Once you determine a number, the final factor to consider is wage pressure from other industries. Are you offering a competitive wage in the general market?


Originally posted by KCLimos:
I would like input on drivers pay. We are a new company and just started adding drivers. Need to figure out if we should pay flat hourly rate and tips up to customer, or if we should let drivers work for 20% min. tip on every job. Do customers get mad if you have a minimum grat. or do they just expect it? Thanks

Kevin

[David Merrill]

Just heard something on the news about Starbucks in Calif. just got a big fine and order to make restitution for violation of tip laws. Seems they were giving part of the tips that should be going to the help to the management. What do you California Guys know about this????

[Salicete]

Assuming you live within the area that you serve, you should have a good idea of what a "living wage" actually is.

It is nowhere near minimum wage, I can say that for sure.

Whip out the Sunday paper and see what employers looking for applicants with skills commensurate to those of the drivers you are seeking are offering; that may help narrow it down a bit.

Pay drivers from the minute they hit the shop until they walk out the door at the end of the shift, but have an established company policy on reporting times and allowable clean up times after a run so that they can't milk you for more by standing around drinking coffee after a trip. (That is more of a management issue for another thread.)

As a sidebar, we do not bill the tip up front. We do; however, clearly state in all quotes that the client is expected to provide a gratuity to the driver at the end of the trip, assuming they were pleased with the services provided.

We receive many positive comments and a good number of bookings based in no small part on this policy since many people feel that requiring a tip up-front is tantamount to being required to tip the waiter before the food has been served.

The number of clients who fail to or under-tip is so small that it has never been a problem.

[InTheLeftLane]

Originally posted by David Merrill:
Just heard something on the news about Starbucks in Calif. just got a big fine and order to make restitution for violation of tip laws. Seems they were giving part of the tips that should be going to the help to the management. What do you California Guys know about this????

Not from Cali Dave - but here is a link from Seattle on the $160M judgement that was made; SB's has announced that they will appeal I think...

Starbucks ordered to refund tips to baristas (http://seattlepi.nwsource.com/business/355839_sbuxtips21.html)

[Greenpala]

When I first started working I was earning 30% of the job + tip if customer wants to. After 4 mts it went up to 40%(I pay supplies, car wash,etc). After about 8 mts a used to get paid 50% (and all the expenses were mine including gas) + tips.

That was back about 8 yrs ago.

Right now we pay $15/hr (garage to garage) on a 6-10 pass stretch, $20/hr on a SUV stretch. Tip is not included in the job so people tip the driver. Expenses - we pay it all.

I find paying $15/hr garage to garage to come out the same as 30% of the job.

Usually with tips comes out twice what they make as a salary.

[KCLimos]

Thanks for all the input. Most companies in my area pay minimum wage and say there is a 15-20% minimum tip. Thats roughly $15-$18 per hour combined for a 120" T-Car and $20-$30 for a 180-200" SUV. I was thinking of Paying drivers a flat $12 or $13 per hour and telling customers tip is at your discretion to get ahead of my competition. Average rate is $75/hr for a 120" and $100-$125/hr for the SUV. Do you think this would work? Some people will tip a little and some probably would tip well so I think it would average out to good pay.

[Celebritylimoky]

Our Drivers start at:

Sedan or SUV: 12.00 per hr
10 PAX :18.00 per hr
Strech SUV or Limobus: 23.00 per hr

Drivers are guaranteed minimum 4 hrs.

We do not require gratuity any longer. We tell the client it is their choice, not ours. We have been using this method for a few months now, and so far the drivers, as well as the clients like it.

Dan

[Elegant Limousines of Palm Coast]

We have a question about this matter.We are in Florida and would like to know what the average rate is for sedan and limo drivers.Also are the drivers required to take care of the vehicle after the run.I mean vacume out the sedan or clean the limo after a night out, or just keep up with the cleaning all night other than washing the glasses.

[Celebritylimoky]

Originally posted by Elegant Limousines of Palm Coast:
We have a question about this matter.We are in Florida and would like to know what the average rate is for sedan and limo drivers.Also are the drivers required to take care of the vehicle after the run.I mean vacume out the sedan or clean the limo after a night out, or just keep up with the cleaning all night other than washing the glasses.


Our drivers are required to keep the vehicle spruced up during the run, then remove all trash and dirty glassware at the end of the run. Our detail guy cleans the car the next day. The only time the driver has to clean the car, is if there is another run. the same day.
Dan

[David Merrill]

Dan: I want to come work for you if you are paying $23.00 per clock hour plus tip. Out of the several thousand Limo runs I have completed, I would say 95% exceeded the 20 % tip. Making this kind of money, it would not take too long before I could retire comfortably. In the Detroit area, you are lucky to find a Limo company willing to pay you minimum wage per "contracted" hour. I use to pay my Guys $8.00 per clock hour (meaning from the time they walked in the door until they walked out) plus they were able to keep all tips. (I did request that they report all tips to me to be properly taxed but I know they did not) I know this is low but Northern Michigan is not known for being a high wage area. They were required to keep the car picked up and tidy during the run and remove the heavy trash at the end but I (being the do everything Guy) cleaned the cars.

The poor Michigan economy has done me in but I am still in the Motor coach and pupil transportation business.

[KCLimos]

Originally posted by Celebritylimoky:
Our Drivers start at:

Sedan or SUV: 12.00 per hr
10 PAX :18.00 per hr
Strech SUV or Limobus: 23.00 per hr

Drivers are guaranteed minimum 4 hrs.

We do not require gratuity any longer. We tell the client it is their choice, not ours. We have been using this method for a few months now, and so far the drivers, as well as the clients like it.

Dan

Dan,
Thanks for the info. Thats exactly the type of info I was looking for. That sounds like good money, especially if the customer kicks some cash to the driver at the end of the night. Are your drivers employees or independent contractors? I have never had employees before, but I heard that you have to match thier taxes. If thats true, it seems like its costing a lot more then the hourly pay. Anyone else doing it similar to Dan?

Kevin

[Limo Scene]

Dan,

Do you employ different chauffeurs for different vehicles? Does a sedan chauffeur ever drive a limo-bus? What makes a chauffeur worth more money for driving a stretch SUV than a 10 PAX? I would be wondering why one one day I am worth $23 an hour but the next I am only have as valuable to you?

If your answer is because you make more money on the bigger vehicles then you in essence are performing a profit sharing pay plan. In that case, why not just one rate of pay and quarterly profit sharing?

While I am sure your payroll system could be adapted to have different hourly pay categories I am just wondering how it is handled by your payroll person.

My payroll guy sees a time card. It is punched in and punched out. He enters the total number of hours worked into Quickbooks. Quickbooks already knows his hourly rate of pay.

Our goal is 40 hours a week for a full time chauffeurs. If they flip flopped all over on their pay rate, how do they ever budget. I guess you could assume the worst that everyday you were destined for the dreaded, low pay, sedan assignments and if you got a bus run or a stretched SUV run it would be considered a bonus week.

I myself am curious now about pay. By the way, mine are all hourly paid employees ranging from $15 to $20 per hour. They earn whatever tips are bestowed upon them by their passengers.

[David Merrill]

KC: Don't even think about Independent Contractor unless you have a great Lawyer and accountant on your payroll. It is too easy to get yourself in trouble if you do it the wrong way. As an Employer, You have to match Social security and Medicare payments. Legally the Chauffeur is required to report ALL tips to you so that you can do the witholding of the income tax and match the social security. This is where you get "ripped" by the Government because you have to pay taxes on money you have never received. You are required to carry workers comp in most states which is assesed by the amount of payroll. I had a low rate at 11.9% you may have to pay a lot more. Some companies lump Chauffeures into the same catagory as Taxi Drivers, especally if you run a lot of sedan air port work. You do not however have to pay workers comp on reported tip income.

A Limo Driver is no different than any other Employee. Pay them a decent hourly wage for every hour they are on the clock. If they are just sitting with their finger in the wind, you still have tho pay them as long as they are working for you. One thing you can insist on is that they do move off of their Behinds and maybe wipe the dust off the car or something like that during down time. Remember if they are an Employee, you call the shots. If they are an I.C. you give up that right and if you try it, can you say "BOHICA".

[BirmLimo - Michael Birmingham]

Dave , several states including Ohio require workers comp on gratuity as well. There are many people out there , including some on here that utilize an IC policy and get away with it just fine. Hell , the prez of the NLA uses IC's. We have one company here that got nailed for over $300,000 by the IRS and others down the street doing the same damn things and no one cares.

The crap of it is this - if you do it legal , then you can sleep better at night - you may go bankrupt - but you won't go to hell.

You can cheat like many do and while you may not sleep better every night - you may be able to afford nicer sheets , since you don't pay taxes like the rest of us you filthy scumbag.

The choice is yours - if you do it right , then you can be honest and feel better about your self and your company , but keep in mind that some guy down the street will buy the same cars , newer than yours , and then undercut your prices because he isn't footing the bill you do.

And if you think for one lonley second that any public servant will come to your aid by arresting or fining the illegal bad guys , think again.

Make your own reputation by being honest always and treat everyone fair. You may not get rich quick , but you will feel wealthy sooner and for a longer period of time.

[Blue Diamond]

I think the pay should vary as to what the person is driving. A vehicle requiring a CDL should make more than a sedan driver due to the license need and passenger amount.

You set the pay. Try to keep in in line with what others in the area are paying. Too little and your help will be leaving. Too much and your just spinning wheels.

Most are adding mileage or fuel surcharge to adjust for the extra expenses. Customers will pay it if the service is good and not think twice about it. Those that don't like it, just may be the same who don't leave a tip at a resturant?!

[ADAM]

Just to play devil's advocate, let me pose this question. Why would you pay a higher hourly rate for higher grossing vehicles which typically generate larger gratuities? Do you want your clients treated differently just because they are in a different vehicle? Perhaps you should consider paying your chauffeurs more for the smaller vehicles to make up for the decreased gratuity potential.

I want my chauffeurs to treat everyone like royalty no matter the type of trip or the size of the vehicle. If this is their mindset and work ethic, they deserve the same hourly pay rate for whatever vehicle or trip type. As has been said many times, there is a big difference between chauffeurs and drivers. A chauffeur is still a chauffeur whether he is serving 2 or 25. A driver gets paid by the load.

That being said, my chauffeurs are paid differently based upon their skill and competency in many areas. One of those areas is their ability to pilot a more demanding vehicle. I would not pay them less to drive a sedan when they have the demonstrated skill to drive a 10 pax. Once they have the skill they should be paid consistently regardless of where they are assigned. I choose the assignments for my own reasons over which they have no control. They get to work for the gratuity, over which they have great influence.