Off My Chest
By Earl J. Mumma III
The issue: Towing at a loss.
Today’s towers are faced with many decisions regarding their business. One decision is whether or not to do police towing, which I wrote about last month. Police towing normally is profitable unless you get stuck with abandoned vehicles or the insurance company dumps its junk on you. Another problem with police towing is that heavy duty towing are constantly being ask to lower their bills.
Recently, three towers contacted me, one with a $26,000 bill that being disputed by a broker, another with a $4,000 bill being disputed by the same broker. The third is stuck with a loaded, rolled-over recovery and the owner or insurance company could not be located. All the work had been done weeks before and not a red cent of money had been paid by anyone. Is this Incident Management? Yes, the road was opened and the tower is a great guy – but he was towing for a loss!
Lowering of bills is a very serious matter for towers. To document their work properly, all towers need to have a complete business plan and know their cost of operation. This is very important, in order to show that your bill is fair and reasonable.
I understand that when some towers present their invoice, they extend a small discount in return for quick payment, to offer customer satisfaction, or other reasons. Whenever you choose to offer a discount, it should be shown on the invoice as a discount, with the full price clearly indicated. This has the effect of revealing the true cost, standardizing your bill, and presenting it in a professional manner.
Our industry need to better educate the law enforcement and insurance industry as to the cost of providing our services. We are often asked to respond to a law enforcement call, only to be turned away with little or no compensation.
I know what you are thinking: the police and insurance companies really don’t care what you r costs are, and that may very well be true. This is what most heavy duty towers face on each large recovery bill: “Boy that bill is outrageous and I am not going to pay it! You drop the price or face a lawsuit or a replevin action.”
Why is it that towers are always in the position of being the “highway bandit?” I’ll tell you why: Most towers normally lower their price when faced with criticism either from the owners, the insurance company, or the police. I love it when the police say, “We have a complaint regarding overcharging.” Do the police have the expertise to determine what is overcharging or are they just trying to intimidate the tower?
Overcharging is often investigated in the following manner: the bill is $20,000. The police department or the insurance adjuster call three other towers in town and describe the job via the phone. One or more of the others say something like, “Oh, I would have done the job for $12,000.” They so this hoping to cause their competitor problems, knowing the job has been done, so who really cares what price he rattles off? The only problem with this is that if the original tower is sued and calls the other three towers into court to testify how they arrived at their lower prices, it should be very easy for a good attorney to establish that their quotes were unreasonable.
We as an industry need to stop quoting prices on other towers completed jobs. We are our own worst enemy when we tear down our competition. If you weren’t on the scene, how in all honesty can you understand the circumstances and quote what you think the other operator should have charged? If you want to see where towers stand, look in your own phone book in the yellow pages under attorneys and towers, there are a lot more of them than us. We need to wake up and stop being forced to tow or a loss rather than a profit.
(Editorial printed in the August 2003 issue of Towing and Recovery Footnotes, and reprinted with permission)
