THE OPERATING COSTS OF PASSENGER VEHICLES.
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The Importance of Having Sonie Standard to Which Reference Can be Made for Purposes of Comparison : "The Commercial Motor" Tables.
CIWNERS of passenger vehicles, more than any k..." other class of user of commercial motors, are interested in the cost of running. Knowledge of that cost is most necessary as a basis for assessing fares, in which accuracy is essential because a very small error might make all the difference between success and failure. Owners of big fleets of buses and coaches have, as a rule, accurate records of their own costs. They are, moreover, always on the look-out for information relating to costs, particularly results achieved by competitors, and it is a mere truism to state that passenger-vehicle owners amongst commercial-motor users are less prone to oversight of the vital need for this knowledge, the lack of which is responsible for the failure of so many haulage contractors to make good. Notwithstanding all this, it is still a fact that the majority of bus and coach owners, and particularly those whose operations are somewhat limited in extent in that they only run a few vehicles (many have no more than one), are unable to keep accurate records because they do not know how to do so. Certain items of cost, of course, jump to the, eye, as it were, and are easy to record. Expenditure on petrol, oil, tyres and wages are of this order, but there are others less frequent in their incidence and, for that reason, possibly only hazily remembered, which fail to he properly recorded and accounted. Many owners neglect to debit. these accounts with their own salaries, whether as drivers or managers; they forget to keep account of numerous small expenses which occur in connection with management, such, for example, as cost of postages, telephones, and items of that kind, and for this and many other reasons quite a number of these small operators of passenger fleets find themselves unable to arrive at conclusive and satisfactory figures of operating costs.
Improving upon One's Own Costs.
Again, even the more sophisticated of bus owners, the experienced operators of big fleets, are all of them continuously alive to the possibility that their own achievements in the way of cost reduction may be falling short of the ideal—may even be so lacking in that respect that their costs exceed what may be termed fair averages! Comparisons with figures of other concerns, as already mentioned, are helpful, but do not go all the way to meet the need for all-round information on the point, because the conditions under which competing organizations work sometimes differ so widely that useful comparisons are often impossible.
It is for these reasons that The Commercial Motor Tables of Operating Costs are found to be useful to all classes of user. They help the small man whose own accounts are insufficient to enable him to assess fares properly, by reminding him of items of cost which he might otherwise overlook and by giving him some idea of what those costs are, so that, if he uses the Tables as a basis for the assessment of his fares, he may be quite sure that he is not going very far wrong. They are useful to the bigger operators as a check of the results, serving in a way as a standard of costs which should not, except under unfavourable conditions, be exceeded and to improve upon which may be taken as more or less satisfactory (again, according to the conditions under which the concern Is operating).
Many of our readers are acquainted with our Tables and know the form in which they appear; they are aware that they are revised annually or whenever a vital change in, say, the cost of fuel or of taxation occurs, and that copies of the current Tables are 01.2
always available on request at our offices. Others may well be advised that they, comprise operating costs for all sizes and kinds of vehicle, _including motorbuses and motor coaches; that they are calculated for -a wide range of weekly mileages and, what is important to the small operator, they include tentative figures for establishment expenses and profit as well as comprehensive scales of charges for hire per mile and per week, from whichit is easy to assess fares per passenger-mile.
The Bases for the Tables of Costs.
Every knowledgeable vehicle operator, however, will want to know whence these costs come, how they are calculated and upon what basis. Without that information, he will not have that confidence in them which is so necessary. They are based on averages of actual operating costs collected over a wide area and over a long period. To be practically useful, we have found it necessary to limit to five years the period over which figures can be taken, which means that they relate to vehicles the date of manufacture of which does not, at the most, go back to more than seven or eight years and even those only appear in figures collected some three or four years ago. That is to say, the averages are based on performances of modern machines. Moreover, it would not be accurate to state that these are averages of actual cost, for such averages would not be strictly applicable to presentday conditions, inasmuch as the basic prices of both materials and labour have varied so very considerably even over the period named as to make averages baSed on actual costs misleading. To avoid risk of error from that source careful records of costs have been kept and these, each year, are so modified as to bring them down to meet current conditions in respect of market prices. For example, five years ago petrol was costing is. 10d. a gallon, and the fuel cost per mile Of a bus which was averaging eight miles to the gallon would, therefore, have been 2.75d. To-day, large fleet owners are obtaining fuel at a cost of Is. a gallon. including tax, and the fuel cost per mile is therefore only 1.5d. What we do in compiling our annual Tables is, first of all, to average the mileage per gallon and from that to obtain the figure of cost per mile for fuel which appears in the Tables. Other items in which similar variations take place will occur to the minds of our readers, At the moment-, for example, we are in the throes of correcting our figures for tyre costs in order to conform with the recent reductions which have been made in the price of tyres.
The annual revision of these Tables of Costs is now under way and publication will he made in due season. In the meantime a card to the Editor asking far copies of the Tables (in pamphlet and pocket-book form) will have immediate attention. The Tables for passenger vehicles will be remodelled, being split up into six sections; four of these will relate to buses, two to those on solid tyres and two to those shod with pneumatics and one of each of those to buses in town service and those on lengthy country services. The separation of solid and pneumatic-tyred buses has always been necessary, because of the differences in the actual cost of running. From January 1st next, this separation will be even more imperative, because of the rebate in taxation which will, from that time onwards, be allowed in respect of vehicles fitted with Pneumatic tyres. The cost of buses in town service differs materially from that of buses on long country runs in several of the important items, hence the necessity for separate Tables to meet those conditions.