Flying for an Inspection Company as Contractor - Lots of Concerns/Questions


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I responded to a job post looking for part 107 pilots to fly for their company (I am certified). They do thermography and hail damage inspection as well as property monitoring (watch the weather for each property that hires them, contact owner if they think there was storm damage and go inspect for insurance claims). They do stuff all over the US and I'm pretty certain they are legit. Had lots of meetings with them. They had me out to test fly their Matrice 210 v2 with XT2 thermal and Z30 cameras mounted. I did great and perfectly captured what they needed and demonstrated safe & efficient flying, so they for sure want to hire me.
 
But they want to hire me as a contractor and would effectively lease me the drone for free then pay me a day rate. Here's the problem though, they said they need me to have insurance to cover Liability up to 1 million and complete Damage/Theft coverage for the drone. The drone and all parts cost about $34,000 and every insurance provider I've checked quotes at least $3500 for the year and that has to be paid in full. I do freelance photo/video stuff and this is all a lot different.
 
Does this all seem normal? Is this how this side of the industry works? How do I choose a day rate? Is there a place I can find more info about this? They said they could give me a ton of work, but it's weather dependent and I honestly not sure how often I'll actually be able to fly.. so do I do like a monthly minimum/retainer type deal? I dont want to get stuck paying $300 a month on insurance if I'm only gonna be able to fly a couple days or something... but this could be a huge source of income for me if I can get it right. 
 
Apologies for long post but wanted to give details for the full picture. Thanks for anyone who can help! 
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Don’t worry about the length of your post, all good questions.  

Scaling a service company is very difficult. By hiring you as a contractor they’re trying to shift the burden of expense to you.   Not unusual nor is it a bad thing.  However, generally you need to travel a lot, do they cover your expenses?  If so how?  Do they pay a flat rate per diem?  Do they pay mileage or cover your fuel?  Also, how they deploy you is important.  You don’t want to have to travel 300 miles to a location, then turn around and travel back within 10’miles of where you started when you might possibly be able to do multiple missions in one area and then travel the 300 miles to rinse and repeat. 

What happens when you travel 300 miles, it’s raining, you have to spend the night and it’s raining the next day.  Can you afford to wait for the weather to clear or will they pay a reduced rate to wait or do you only make money when the drones in the air?  

Insurance sounds really high.  Our UAVs and payloads are valued at about $50k for  $1200 year with $4M liability. Aviation insurance is a bit different in that this is also our business liability insurance.  You can get drone insurance by the hour but I don’t think it covers your business outside of the flight.  Either way $3500 seems pricey.  Do you mind sharing who it’s with?

most companies like PrecisionHawk are paying contractors $500 day for flight days, $300  for training and weather days plus room and board.  They supply the I2 or M200.  Not only is the rate important but so are the terms.  When do they pay expenses and when do they pay labor.  Net 60 is not unheard of although we would never ask our contractors to do that.  We generally try to pay our contractors on the same pay periods as our employees.  That can be effected by the contract we have with our customer so occasionally we can’t meet the same pay schedule but we won’t go beyond net 30.  

If they’re legitimate it might take a month or so to sort out the details but generally once you e figured out a system that works for both of you it can be very lucrative. 

Good luck.

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Remember you will also get a 1099 and have to pay the taxes No medical or retirement either. $300 is too little for a non flying day. You still need to eat, pay medical, and pay toward your retirement so your $300 isn't what you are getting paid! Yes the way they want to do things is normal but, $300 to 500 is way too cheap. It would be right IF you were their employee. Look I have been self employed for 44 years. I am NOT rich and yet NOT poor either, just lucky, 69 years old and still working... but I never have worked... I get paid for my life's passion! If this is what you live for... go for it at any price ... If your prices are too low you will figure it out. If this is just business, well Employers match employees FICA tax and depending where you live maybe a lot more taxes that as an employee you won't see. Form 1099 you are both the employer and the employee so figure a hefty tax hike! You get hurt on the job you make nothing till you work again. There is a lot to consider but I would think $60 per hour standby time in the rain is probably where you should be & $150 per hour flight time per hour (4 hour minimum) plus travel time at $35 per hour plus costs should get you started without immediate failure! Best of Luck

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All good advice.  

On 1/24/2020 at 10:31 AM, Av8Chuck said:

PrecisionHawk are paying contractors $500 day for flight days, $300  for training and weather days plus room and board.

This is not what I think people should make but what the going rate is.  This is approximately $125K per year.  If you were to win this contract and paid your employees $125K loaded or 1099s $500 day service providers have to charge at least $2500/day rate to make approximately 15%.  The reality is that very few enterprise companies will pay that much and the risk is too great for 15%.  Although this might represent millions in revenue the service provider is lucky to get to break even.  

How many of us are charging $2500 per day?  How many are making $2500/day doing property videos?  Inspecting cell towers?  Etc.. 

Until the value of the data collected is significantly higher, I don’t believe the labor market will support the numbers @village video is suggesting. Not to say that I wouldn’t want that.  

If there are forum members making this or more please let us know.  

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May I ask which company is offering this? I had a very similar experience with best drone services llc, a shady drone company that is trying to be the Uber of roof inspections. They wanted me to fly drones for them and inspect some roofs for insurance purposes. Overall, they almost sold me on it before I realized that the pay was not worth the insurance costs. Name and shame.

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