Wednesday, April 25, 2007

Gourmet Service for Fast Food Prices?

Motor Clubs and Law Enforcement Towing

Lately, I have been thinking about the real costs of police ordering motor club (m/c) tows. I dropped all associations with motor clubs quite a while ago after determining that their re-imbursement rates didn’t even cover my costs (plus a reasonable salary), and profit was an unheard of concept. Why some towers continue to work at these rates, while not a mystery, is the subject for another posting.

What is the real effect of a police officer requesting a motor club affiliated wrecker, either through the m/c dispatch system or directly? If the request goes through the m/c’s dispatch system, substantial lag times occur resulting in increased time tying up the officer and additional time on the side of the road for the vehicle. This is not just a monetary problem (time is money) for the short staffed law enforcement agency (and possibly a fire department too) but also represents a safety hazard every additional minute they sit there. Did you know that a disabled vehicle parked on the shoulder of the interstate constitutes something like a 20% obstruction to traffic flow?

When the police call a tower directly, they expect that he will (reasonably) be in-route immediately to meet their needs, “gourmet” service. Normally the towing company can charge a profitable rate for this immediate type of service. All calls for service from police have to be treated the same way for a tower to stay on a rotation list. When the tower accepts m/c rates (often between a third and one half of regular rates) for his best service that generates a deficit in his income. To make up for this the money has to come from somewhere. On accidents most towers will pressure the vehicle owner to convert it to an insurance pay tow, if they have coverage. On disablements though, they often just have to take the loss and make it up elsewhere… by raising their regular police towing rates! Think about it, how come a tower will accept $25 from a motor club and charge $100 or more for the same service if it is a police tow?

Therefore, when law enforcement agencies support motor clubs, either by requiring participation from their rotation towers, or by enabling requests for motor club service, they unknowingly increase rates for everyone else. I recognize that the police are trying to meet the needs (or honor the requests) of the general public, and probably get a very bad time from motorists who don’t get their club affiliated service provider request. The unseen consequence of raising all other rates should have a balancing effect though. A good analogy for the situation can be found in the health care system, where Medicare only covers a set (small) amount and all others pay through the roof.

These programs are in reality just another type of insurance. If the police call a non-club wrecker, most programs still cover all (or at least a portion) of the tow, albeit as a re-imbursement rather than a “free” service. Except in a few metropolitan areas, there really is no such thing as a “club” wrecker. Services are provided primarily through subcontractors, who (due to the low rates) are increasingly far and few between. Hopefully police agencies will start to recognize that maybe the best situation is to support a closest/fastest rotation-service provider system, and leave the towing insurance aspect to sort itself out on it own.

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