Bus hire explained

Private Hire or commonly referred to as Bus Hire is the term people use to refer to the hire of bus for transfer of a group of people from point A to B or a round trip i.e. from Johannesburg to Cape Town and back.

A common question we receive is “how do charter bus companies come up with these prices?” While the answer cannot be given in one sentence and pricing calculations can become fairly complex we can give you enough of an understanding to feel knowledgeable about the quoting process.

Every itinerary is different and every charter bus company has different rates. Unlike hotel rooms or airline tickets, charter bus pricing cannot be a standard rate since the costs are different for every itinerary. However, almost all charter bus companies use the same rules to generate their quotes. Charter bus companies use hours, days, kilometres, and other daily trip details to develop a quote. Prices must cover instalments, diesel consumption, driver costs, insurance costs, maintenance costs, repair costs and capitalisation costs for acquiring new buses after a few years. This divided in to two categories:

Floor price  – Office and depot expenses including staff costs, insurance, instalments etc.

Operational Costs –  costs related to keeping to vehicles on the road (diesel, toll fees & repairs/maintenance

Profit – Base rate example on a fleet of 4 x 15 seater vehicles that must operate on a minimum of 22 days per month

Floor price – Salaries staff & office rent – R 65 000.00

Instalment – R 7500.00 per vehicle

Driver  – R 10 000.00 per vehicle

Insurance – R 8500.00

Total expenses excluding diesel and toll fees, maintenance and repairs  and profit – R 143 500.00

Thus to operate four similar vehicles over a period of 22 days, the base rate to recover the above costs is R 1 630.68 per day. So if you are unable to operate at least 22 days, your base rate must then increase according to the number of days operating. This ends up to be a juggle sometimes and therefore requires good sales staff and an efficient maintenance team and very responsible driver to ensure a profitable company.

Rates can be divided into the following basic categories:

Transfers or shuttles, Half day and full day trips and overland journeys (multiple days sleeping out) as well as Non-utilised days.

Here are some examples of some typical rates:

To cover the basic daily expense to keep the vehicles going all rates start with a Base rate (minimum charge), meaning the minimum rate to be charged per day even if you only need to use for a few hours or few kilometers. Thereafter the half day or full day rate is used which is usually based on a maximum distance of 250km allowed per day. Should those distances exceed the allowed kilometers, then the CPK – cost per km is used – meaning the price is then calculated purely on rands per km..

CHARTER BUS PRICES EXPLAINED

Let’s start with a simple local single day trip. This is a common type of itinerary for weddings, parties, dinners, or other local events. The price is found by comparing the duration of the trip (hours) times the hourly rate to the distance of the trip (miles) times the mileage rate. The higher of the two prices is the base price. Then add a fuel surcharge (7 – 15 %) or any necessary driver changes (more on that later). Local trips are almost always priced by the hour as it would take a lot of driving within a city to justify a mileage based price. A five-hour minimum is standard. Every size bus has its own base rate.

Pricing for a multi-day out of town trip can get a little more complicated. A variety of itineraries fall into this category including school sports weekend trips, trips to Sun City, Kruger National Park, etc. The first step is to compare the duration of the trip (days) and the distance of the trip (kms) and then take the greater of the two. So a shorter distance trip that encompasses many days will likely be priced on a day rate. A longer distance trip that only lasts a weekend may be priced on a kilometres rate. So let’s say your soccer team consisting of 15 players as staff (thus we need a 15 seater Midibus) needs to travel 350 km for an out of town game. You get there on Friday night and you get back on Saturday night. Using the example pricing above the calculation would be 700 kms * R 11.25/km equals R 7875.00. Now you compare that to 2 days * R 3100.00/day = R 6200.00. So the base price would be R 6200.00. Since the maximum distance for the base rate is allowed (250km per day total 500km) the higher rate shall be use which is R 7875.00.

There are other itinerary details to consider as well in charter bus pricing. For example, a driver may only be on the road for 10 hours at a time before needing at least 8 consecutive hours off duty. This means that for long trips (say Cape Town) we require a 2nd driver that adds another R 450.00 per day. Also you must then realise additional accommodation and meal costs are incurred for the 2nd driver.

Another cost is the valet deposit. If your group wants to bring alcohol on board there will be a valet deposit charged. The deposit is usually in the R 1000.00 range. It is a refundable deposit assuming the equipment is not damaged and is returned in reasonable condition. So if the party gets too crazy and seats get broken or passengers get sick then the deposit likely won’t be refunded. This is a subjective decision made by the actual charter bus company.

Gratuity is not included in quotes. Drivers typically receive tips equal to about 10% of the total charter bus rental or R10.00 per passenger per day. If the driver loads and unloads luggage then additional gratuity is typically paid.

CHARTER A BUS PRICING SUMMARY ∙ CHARTER A BUS

This has been a simple explanation of the basics to quoting charter bus transportation. Pricing can become a complex calculation depending on the complexity of the itinerary. The charter bus rental quotes you receive from AfricaWheels.Com are calculated according to a standard methodology. However discounts may apply when it is for example a multiple day tour that consists of a few days where the bus is not utilized – a 50% off the day rate usually applies. All quotes are submitted within 2 hours after receipt.

For any additional questions please contact us at 087 3300 6510 or submit your itinerary to our sales team at sales@africawheels.com