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As a fairly new owner-driver I am told that if

25th April 1975, Page 38
25th April 1975
Page 38
Page 38, 25th April 1975 — As a fairly new owner-driver I am told that if
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Which of the following most accurately describes the problem?

I accept a rate lower than that which covers both standing and running cost, then I am risking insolvency. However, in these hard times it seems feasible to cover running costs and at least make some contribution to standing costs. What do you think?

While the argument you expound might have some merit in the short term, it is the quickest way to bankruptcy; though a rate which does not altogether cover fully the cost of providing the service is intended perhaps to be only a temporary arrangement, it is very difficult to terminate and obtain a realistic rate. Further, it encourages the unscrupulous to play off one operator against another to obtain cheap— and perhaps ruinous—rates. Such a customer will desert one operator for another as soon as a reasonable increase is sought. The best and safest way is to charge a fully costed rate to cover both standing and running costs plus a reasonable addition for profit and contingency.

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