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28th April 1925, Page 19
28th April 1925
Page 19
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Which of the following most accurately describes the problem?

The Joint Use by Tradesmen of a Light Van. Is it Practicable to Use One Vehicle for Two Businesses ?

MRADESMEN in a small way of business frequently experience the necessity for a transport vehicle, although the bulk of their work is insufficient to justify the purchase and maintenance of one .absolutely for their own use. It sometimes happens, also, that the occupation of the vehicle's spare time on haulage contract work is neither convenient nor desirable, and another trader in the district may be found who is willing to co-operate in the purchase and running, a mutual arrangement, of course, being made with regard to times and expenditure.

An inquirer has written stating his case, which is roughly in conformity with the preceding paragraph. Some of the actual data are as follow : The inquirer proposes, together with a friend, to purchase an 8-cwt. van for the use of their two businesses, but to be responsible for the licensing of the vehicle and the financial conduct of the venture. He, therefore, desires to know what would be a fair price to charge his friend for the service which he receives from the vehicle, taking into account running costs and standing charges, but profit out of the work of the van is' not to be expected. In the case in question, driver's wages are to be ignored, presumably on the grounds that each of the two friends will drive, or one of their employees in either case. This, of course, means that, so far as the employee is concerned, his wages are already charged against the respective • firms and there will be no exchange of labour.

Elasticity in Cost Adjustment.

No details are given as to the relative proportions of use ; therefore, it is desirable to lay down principles upon which to base estimates of operating costs and rates for charging up against the second user which will take into account satisfactorily the time and mileage factors. A mutual arrangement, of course, will have to be made with regard to the times at which the vehicle is at the disposal of each party, and agreements entered into with regard to any joint loads and the like. An elastic method of cost adjustment is desirable, the two principal items being time and mileage. The actual owner of the vehicle-that is, the one who takes out the licence and is legally responsible for it-will have to keep a check of the times of use by each party. A mileage recorder will presumably be fitted to the vehicle, and it should. be made a habit to take a reading from it at the commencement and end of every day's work, or part of a day's work by each party responsible, in order that there may be no disputes.

How Running Costs would Work Out.

For an 8-cwt. van on pneumatic tyres the running costs would be as follow : fuel, lde; lubricants, 0.1d. ; tyres, 0.53d. ; maintenance, 0.47d.; depreciation, 0.5d. ; totae 2.6d. per mile approximately. The best procedure will be, in the first instance, to use this figure as a basis for, say, a month or two until accurate records have accumulated from which the actual figures of the case may be worked out, and then adjustments will have to be made and the figures agreed by both parties fcir a further period. The items specified explain themselves. With regard to standing charges, the fellowing will be an approximate basis for the initial month : licences, 8s. 4d. ; rent and rates, 4s. 6d. ; insurance, 5s. 8d. ; loss of interest, 6s. 8d. ; giving a total of 21 5s. 2d. per week ; 3s. 8d. per day will be an approximate figure, therefore, for standing charge estimates. The first three items, of course, could be definitely adjusted before the arrangement begins to take effect, as the expenditure in respect of these three items will be definitely known. The clerical work involved and the general supervision of the operationof the van will involve a certain amount of establishment charges, and 12s. per week will probably be a suitable provision for this. .

An Assumed Scheme of Working.

For the sake of example, let us make a few assumptions in order to see how the scheme works out in practice. A is the actual owner of the van, and B the other party who uses the vehicle. If A has the van on Monday, Wednesday and Friday, B will use it on Tuesday and Thursday and on Saturday morning each Iiieek. Supposing A's daily mileage is 30 and B's 25, the weekly totals will be: A 90 Miles, and B about 62 miles. At the assumed figure of 2.6d. per mile, A must pay 19s. 6d. of the total weekly running costs, and B 13s. 5d. These figures, of course, account for the mileage factor.

Considerations of time affect the allocation of standing charges, which, as previously mentioned, will be about 3s. 8d. per day, or in accordance with the revised estimate to meet the exact circumstances. For the work obtained by A on Monday,' Wednesday and Friday lls. will have to be paid, while B is liable to pay 9s. 2d. for Tuesday, Thursday and Saturday morning. The idle period will be on Saturday afternoon, or one other afternoon, which is early closing day in all probability, and Sunday of each week. The standing charge value of these one and a half days is 5s. 6d. As A receives slightly more, service than B, it is only fair that he should Tay his fair proportion of standing charges for the odd time.. The proportions actually are six-elevenths and fiveelevenths, making 3s. and 2s. 6d. respectively the correct amounts to charge up to the two accounts in this connection.

Taking the 12s. per week establishment costs figure, this must be split up in the proportions just mentioned, giving, roughly, Gs. 7d. and 55. 5d. If the van is. not used on any one whole working day the day's standing charges must be divided equally between the two accounts or some other equitable arrangement should be arrived at in the first instance.

The Weekly Cost to Each Partner in the Scheme.

The total weekly figure for A to bear will, therefore, be 22 Os. Id., and he can charge I3 XI 10s. 6d. for his portion of the week's total operating costs. When a vehicle is working in deuble harness, so to speak, it is essential that a definite working agreement be entered into before operations are commenced. One party must retain all bills and be responsible for the clerical side of the work connected with the transport, and responsibility for mechanical maintenance must be allocated, so that there is no possibility of one party imagining that the other one has done, or has not done, some action with resulting trouble and damage to the vehicle. A matter that calls for discussion and prior arrangement is the question of a stand-by vehicle, available whenever the van acquired under the above seheme is under repair and overhaul. S.T.R.


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