How to Charge for NEMT Deadhead Miles?

If you're in the Non-Emergency Medical Transportation business, you've probably dealt with the headache of "deadhead miles." Simply put, deadhead miles are those miles your vehicle travels without any passengers onboard, whether it's driving to pick someone up or heading back empty after dropping them off.

Deadhead miles aren't just an inconvenience; they're also expensive. Each empty mile still consumes fuel, adds to vehicle wear and tear, and increases driver payroll costs - all without directly contributing to your revenue.

So how can you manage deadhead miles effectively and fairly without pushing away customers?

First, let's clarify what we're dealing with. Imagine your driver picks up a patient who's located 15 miles from your office, and after dropping them off at their appointment, your driver returns empty. That's 30 miles of deadhead. Without a strategic pricing approach, your business is absorbing all these costs, significantly cutting into your profits.

Charging for deadhead miles can be challenging, but there are several practical ways to handle this:

One effective approach is zone-based pricing, where you divide your service area into distinct zones and set fees accordingly. Customers pay rates based on the zones their pick-ups or drop-offs fall into, helping cover some of the costs from empty drives without needing complicated explanations.

Another approach is distance-based pricing, where customers pay based on the total miles driven—both occupied and empty. This model clearly connects your pricing to your actual costs, making it easier to explain to clients why certain trips cost more.

Establishing a service radius is also helpful. Within a specific radius, you might not charge for deadhead miles, but trips outside this area incur a transparent additional fee. Clients generally understand this setup since it feels logical and fair.

Using routing software like the one we offer to minimize deadhead miles can make a significant impact. Good dispatch software helps optimize schedules and routes, ensuring your drivers spend less time driving empty. This doesn't just reduce your costs; it also increases overall efficiency.

It's equally important to communicate openly with your clients about why you're charging for deadhead miles. Clients appreciate transparency. When they understand that empty miles directly affect pricing, they're typically more accepting of these charges. Clear communication prevents misunderstandings and builds trust.

Lastly, investing in technology can dramatically improve efficiency. Software like DriveBossAI help NEMT providers optimize routes, reduce deadhead miles, and improve overall business efficiency.

In short, deadhead charges shouldn't be viewed merely as an additional fee, but as a fair way to cover legitimate business expenses. By clearly explaining these charges, using technology wisely, and selecting a transparent pricing strategy, you'll strengthen your business operations, maintain healthy profits, and build better relationships with your clients.