I started a small business about 18 months ago and it’s been slowly growing. It involves weekly deliveries of a product to customers spread over a metropolitan area. I’m finally at the point where the workload is becoming more than I can manage by myself, and I’m looking to hire a driver. I’m evaluating different compensation schemes and I’d like some opinions.
My main dilemma is whether to compensate based on mileage, # of deliveries, time, or some combination. My delivery area is focused around a major city and the nearby suburbs. As I continue to add customers, the total mileage of the delivery route will increase somewhat, but the average distance per customer will drop as I’m trying to keep my customers somewhat concentrated. If I pay my driver per mile, that rate will not increase all that much as the business grows even though the driver will have to make more stops and do more work to park and deliver the product to the customer’s door. If I pay by hour, that seems to encourage my driver to really take his/her time rather than completing the route in the minimum safe time. Initially, this will be a very part time position, as deliveries only take place one day a week.
Flat rate by agreement according to the revenue being generated. Just be fair and honest.
As a teen I had a job cleaning a public school at night. We were paid for X hours but when we were done we were done. So we all rushed around like maniacs and helped each other so we all left early. No skin of the bosses nose - he got what he got for the job and we could hurry or dawdle as the whim took us.
Will the employees be using their own vehicle? If so, will any car suffice, or are vans/trucks required?
Can they usually expect to receive tips?
More details would help, but assuming that they are using their own vehicles, they should definitely get compensated for mileage and/or per delivery in addition to an hourly wage.
We’re currently debating whether we will provide a vehicle or if the employee will need to. I have a personal car that we’ve outgrown that will either be sold or converted to business use. I imagine that providing a vehicle is the way to go to maximize business profit. Right now any car will suffice, but within a year I would expect that a compact sedan would not be big enough.
Tips are not expected, but who knows what customers might do.
I used to be a parts delivery driver for a local auto parts store & garage. I used a minivan owned by the shop and my pay was $2 above minimum wage which was the standard going rate for auto parts delivery drivers in my area.
What and how you pay your driver will hinge on if he’s using his own vehicle or not. If it’s a company car, then an hourly rate will suffice. If he’s using his own vehicle, than an hourly rate plus mileage would be standard.
Using your old vehicle as a company vehicle is really better, in terms of liability and ease of paying the guy. Especially if you install a dash cam. That’s a moderate investment that will pay off hugely, in terms of productivity and liability. Your employee won’t dawdle if he knows you’re taping him. And you won’t have to muck around with paying mileage or worrying about his car breaking down, which would interfere with your deliveries. Also, if someone crashes into him or he hits someone, you will be able to replay the tape and see whether it was his fault or the other guy’s. So it’s better from a liability perspective, too.
Something that’s THIS part time really doesn’t need to be hourly. I vote to pay him piecework per delivery, so he’s not encouraged to dawdle in the first place. And with the dashcam, hopefully he would know better than to drive recklessly or to fuck around on your gas $$ (if not, you’ll see it afterward and boom, instant firing).