What Do You Charge For Travel Time?


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So what do you think would be a fair cost to charge for travel time in cases like this when the travel time can be 2, 3 or even 4 times the onsite time? 

Let's say your rate is $225/hour and you have a job that will take 2 hours of onsite time (assume no post processing).  That's $450 total.

But let's assume the job is 2.5 hours drive away, 150 miles.  So 300 miles total, 5 hours total travel time.

The standard mileage rate is currently $0.58/mile - so by that rate, the travel time charge would be $174, or effectively $35/hour.  This per mile rate is suppose to compensate for all costs of operating the vehicle, including fuel.

I know in the consulting industry, consultants charge their full hourly rate during the portion of the travel they can work on your project (sitting in a plane or train).  The travel time they aren't working, I've heard typically they charge half their hourly rate.  This is because while they are traveling, when they can't work, that is downtime caused by the project that prevents them from otherwise working and making their full hourly rate.

If your standard rate is $225/hour and onsite is 2 hours and travel is 5 hours for the job, let's do the math...  $450 + $174 = $624 divided by 7 hours total of your time = $89/hour.  Note, this travel time is traveling at freeway speeds.  Travel in a crowded city, it could take you an hour to go 30 miles - so at the mileage rate, while you were in your car, you would be making $17.40 an hour. So an effective $89/hour for this hypothetical job is on the high side using the standard mileage rate.  $89/hour doesn't sound that bad but that's just gross revenue and not including cost of equipment depreciation, insurance, advertising, software, and on and on and on.

Similarly, if you have to fly, you might charge for your airfare, hotel, rental car, and mileage.  But if you are flying, including time spent in airports and rental car counters, you are probably spending a good part of a day (4-8) hours traveling which is time you can't spend onsite during another job at $225/hr.  

So seems to me, charging the mileage rate and/or actual travel costs without factoring in any value for your time spent traveling  is shooting yourself in the foot as for every hour you are spending driving you are making $17-$35/hr instead of spending that time onsite at a second closer job at $225/hr.  One might argue assuming you have the option to do a second job during that time is not realistic.  Better to make $17-$35/hr driving to a job than nothing at all but that time could be used for other valuable activities like networking with potential large clients. 

So what do you think would be a fair cost to charge for travel time in cases like this when the travel time can be 2, 3 or even 4 times the onsite time? 

 

Edited by Jazee
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