Every service call carries a dispatch cost before any work — drive time and vehicle cost to get there. Knowing it sets the minimum service charge and reveals route inefficiency.
The example
0.5 hr drive, 20 mi.
| A | B | |
|---|---|---|
| 1 | Item | Value |
| 2 | 0.5×40 + 20×0.70 | — |
| 3 | Dispatch cost | → $34 |
The formula
The formula:
How it works
How it works:
- Drive labor = drive hours × burdened tech wage — paid time, no revenue.
- Vehicle cost = miles × cost per mile (fuel + maintenance + depreciation).
- The sum is the cost to arrive — the floor under any service charge.
- High dispatch cost → the minimum/trip charge must cover it.
Dispatch cost is why a trip charge exists. You spend real money — paid drive time plus vehicle wear — just reaching the customer, before touching a tool. A service or trip fee that covers dispatch cost protects you on small jobs and no-repair calls. And because dispatch cost scales with distance, it’s the number that makes tight, clustered routing pay off — same revenue, less cost to arrive.
Try it: interactive demo
Drive hours, burdened wage, miles, cost/mile.
Variations
Drive labor only
Paid time:
Vehicle cost only
Miles × rate:
Minimum charge
Cover dispatch + margin:
Pitfalls & errors
Burdened wage. Drive time is paid — use the burdened rate.
Full vehicle cost. Fuel + maintenance + depreciation per mile.
Set the minimum. The trip charge must cover dispatch cost.
Practice workbook
Frequently asked questions
How do I calculate dispatch cost per call in Excel?
Why does dispatch cost matter?
How do I set a minimum charge?
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