Idleaire closes

Bruno · Jan 31, 2010

The reason Idleaire has failed is because they priced themself out of business. If they would have kept the price at $1.25 or $1.00 an hour drivers would have used them more. Why would a driver use Idleaire at $3.00 a hour or $72.00 a day, when you can go get a hotel cheaper and have a nice hot shower to boot.

layoutshooter · Jan 31, 2010

I don't know what their "cost per hour" per unit is. I bet it is rather high. They have been charging $1.85 per hour for Gold members and that was the FedEx discount rate as well.

cheri1122 · Jan 31, 2010

Bruno nailed it in a nutshell.
The new Va Gov's comments are too funny - rest areas promote tourism? [Trying to picture a scenario where the family rejects a visit to Colonial Williamsburg because the rest areas in Va are closed]

I thought that if the state could sell or lease the properties to a truckstop, it would provide money for the state, parking & services sorely needed by the trucks, expansion for the truckstops without the usual neighborhood complaints & red tape, business for the exit ramp services [the 4 wheelers], and everyone would win.

Bruno · Jan 31, 2010

layoutshooter said:
I don't know what their "cost per hour" per unit is. I bet it is rather high. They have been charging $1.85 per hour for Gold members and that was the FedEx discount rate as well.

With over 100 locations across the USA. The company would have made more money in the long run if they didn't try to rape the driver of everything they had. Lets do the math, at a $1.00 an hour based on 75% of the parking spots having paid users. Most truck stops have a 125 spots. So if they would have charged $24.00 a day they based on 75% or 93 spots being used. That would have been an income of $$2232.00 per day at each location. That's $223,200.00 gross income per day based on 100 locations which they had more than 100 locations. Now I would have used it for all of our trucks because it would have saved us money on fuel.

Idleair could have made $81 million dollars in gross income if they would have charged $1.00 an hour for basic service and had 75% of there spots used each day based on 100 locations.

I don't know about you but that is alot of money. They didn't look at the big picture because the company was greedy. .Maybe TA can buy them and charge a fair rate for drivers.

xiggi · Jan 31, 2010

Bruno said:
With over 100 locations across the USA. The company would have made more money in the long run if they didn't try to rape the driver of everything they had. Lets do the math, at a $1.00 an hour based on 75% of the parking spots having paid users. Most truck stops have a 125 spots. So if they would have charged $24.00 a day they based on 75% or 93 spots being used. That would have been an income of $$2232.00 per day at each location. That's $223,200.00 gross income per day based on 100 locations which they had more than 100 locations. Now I would have used it for all of our trucks because it would have saved us money on fuel.

Idleair could have made $81 million dollars in gross income if they would have charged $1.00 an hour for basic service and had 75% of there spots used each day based on 100 locations.

I don't know about you but that is alot of money. They didn't look at the big picture because the company was greedy. .Maybe TA can buy them and charge a fair rate for drivers.

81 million may sound like allot of money but if it costs you 85 million to operate it is still a loss. It may sound easy to say they charged to much but life isn't that simple. They have construction, upkeep, fees for tv and sattilite to pay. Add in employees, taxes, management, interest on loans, transportation for managers to get between locations, a corporate office and it's upkeep etc. It could easily be pretty tuff to make it for a buck an hour.

When your not privy to real operating costs it is pretty hard to make an educated guess at what it costs to run any certain business.

MYGIA · Jan 31, 2010

Bruno said:
Idleair could have made $81 million dollars in gross income if they would have charged $1.00 an hour for basic service and had 75% of there spots used each day based on 100 locations.

The problem with this, and I am sure a contributing factor to I/A folding up, was that all too often many of the spots were taken by trucks not using the service. I can't tell you how many times I circled the lot looking for an I/A spot in which to hook up when all of them were filled, but only 2 in 10 trucks were using the service. I believe they made some improvement in this area over the past few months, but perhaps too little to late.

On the other hand, I understand and acknowledge the inadequate number of parking spots for trucks and understand that a driver needs to grab any available slot he or she can get.

I have used I/A for years. I agree that the price was getting a bit high, but the latest deal of $1.85/hour for Gold Members was a great deal and a lot less expensive than idling. I would often use the service while up and awake, but would log off when sleeping to save $$.

I only learned of the I/A closing today when I hooked up and was unable to obtain any balance information on my card. I am presently getting heat, electric and basic TV service. If it continues to stay operational for the duration of my stay at this facility, I will count all things even and not be concerned about any balance left on the card or the fact that I had paid for Gold Membership through 2010.

I will miss the service and hope someone might be able to step in and pick up the pieces.

Bruno · Jan 31, 2010

xiggi said:
81 million may sound like allot of money but if it costs you 85 million to operate it is still a loss. It may sound easy to say they charged to much but life isn't that simple. They have construction, upkeep, fees for tv and sattilite to pay. Add in employees, taxes, management, interest on loans, transportation for managers to get between locations, a corporate office and it's upkeep etc. It could easily be pretty tuff to make it for a buck an hour.

When your not privy to real operating costs it is pretty hard to make an educated guess at what it costs to run any certain business.

For a company that had less than 500 people working for them I don't think it cost 81 million to operate. They have been in business for 10 years so some of the construction costs have been paid for. Many things to think about. Poor Management would be my guess.

Turtle · Feb 1, 2010

According to a report for the Maryland Office of Planning in 2006, each IdleAir space costs $16,700 to install. There are 8,760 hours in a year. Projected paid occupancy of available spaces was 50-55% average annual usage, with 55-70% in the summer and a corresponding 30-55% usage in the winter. Actual paid usage was about 35% average annual, with 50% during the summer.

IdleAir stated during their bankruptcy that they needed 50% annual occupancy to break even. If that's true, then their operating costs would be about 90-95 cents per space. At 50% occupancy, they'd be netting about 5 cents per hour per Gold user, and a little more with Silver and casual users. Every percentage point below 50%, especially as it nears the 35% average annual usage, the average revenue needed per paid, occupied space soars to the point where at 35% occupancy the it would be nearing $2.57 per hour, and if all 35% were occupied with Gold members they would be losing 72 cents per hour. These numbers coincide with the published financial reports from IdleAir.

So, you can quickly see that if they charged just $1 per space, even if that bumped usage to a very overly optimistic 75% average annual usage, that's just an average gross revenue of 75 cents per hour, and they'd be losing 15-20 cents per hour with a cost of 90-95 cents per space. Interestingly, back when fuel was $5 a gallon, IdleAir's average paid occupancy was about 75%, where they were netting about 46 cents per hour. But as the price of fuel dropped so did IdleAir's usage, and it dropped to a break-even at 50% and then on down to losing serious money at 35% occupancy.

At more than $16,000 a pop to install, it would take 4 years at 50% occupancy if 100% of the revenue went solely to recover construction costs, so you have to figure that it takes at least 10 years to recoup the construction costs. HVAC and electrical maintenance and repair has to be a few hundred dollars per year per unit, with one dollar of maintenance and repair requiring an additional one hour of paid usage. A few years ago I remember reading a report that detailed a lot of their costs and remember thinking at the time that their business model simply wasn't sustainable at anything less than $4 or $5 a gallon for fuel. It was far too dependent on large fleets purchasing large blocks of time that would essentially go unused. That didn't happen.

layoutshooter · Feb 1, 2010

Truckers pay a lot of fuel tax. That tax should all be used on the roads. We all know that it is not. It is used to fund all kinds of things that truckers seldom if ever use. We do not get the full benefit of the tax dollars we spend.

If congress cannot spend the money where it should be spent, on roads and bridges only, why not use some of that money to subsidize IdleAire instead of cheap bus service or bike trails?

Don't take this wrong, it should all go to the roads. It is just that since they are not able to do what is right the least they could do is give us access to our money.

I mean, after all, this fits their "goofy green" attitudes just right. In fact, you would see a bigger reduction in fuel use and green house gasses faster with IdleAire than you will ever see with a bike trail!!