Service Provider Cost Index

A LOOK AT TOWING AND ROAD SERVICE INDUSTRY INFLATION 2012 – 2019

SP Cost Index

TOWING AND ROAD SERVICE INDUSTRY INFLATION 2012 – 2019


65 Million drivers in the United States experience a breakdown each year. A breakdown can happen to anyone, anytime, anywhere. These stranded drivers turn to depend on service providers for support. Dynamics for these providers continue to evolve. To help better understand, we have constructed an open and public framework.


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What is the Service Provider Index?

The Service Provider Index measures the underlying costs of running a roadside or towing business by using publicly available federal government data from the U.S. Bureau of Labor Statistics, U.S. Energy Information Administration and FRED® database.

Included with the index are the step-by-step framework used to build the analysis as well as an Excel model with the raw data, calculations, assumptions and sources. These files are shared as an open framework for the industry to review and to provide input.

The Top 3 Cost Drivers

Labor

Labor is the largest expense (40% of total operating cost) for service providers and is critical to their profitability. Tow and road service operators have experienced steadily rising labor costs since 2012.

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Trucks

Prices for new trucks have outpaced consumer inflation, putting additional cost burden on providers. Trucks account for 20% of total operating costs.

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Fuel

Fuel prices have been rising since 2016, making  it more expensive for service providers to perform each job. Fuel constitutes approximately 15% of a service provider's operating cost.

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The need for roadside assistance isn't going away - people are driving more and vehicles are getting older.

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This increasing frequency, combined with driver shortages could have a dramatic impact on the customer experience to the detriment of roadside programs.

Learn About the Economic Factors that Impact Service Providers

Now more than ever, the towing and roadside assistance service provider community needs our attention. Download the Service Provider Cost Index to learn more about these factors and how they impact roadside programs.