What is revenue per vehicle hour?
Revenue per vehicle hour is the money a vehicle earns divided by the hours it was out working. For a NEMT fleet, add the payments for every completed leg in a shift, then divide by that shift's hours. Every hour costs roughly the same in wages, insurance, and van payments, so this compares days, drivers, and contracts more fairly than revenue per trip.
On this page
The formula
Revenue per vehicle hour = revenue from completed trips ÷ vehicle hours
Both halves need a fixed definition, or the number drifts from week to week.
Revenue is what you will be paid for the legs you finished: base rates, mileage, paid wait time, and any extras the payer covers. Medicaid payment is often split into a trip rate and a mileage rate. Arizona’s fee-for-service manual, for example, bills a base rate on one claim line and loaded miles on the next, and counts a loaded mile only while the member is on board. Trips that did not happen add nothing. Louisiana’s manual says a scheduled trip with no one transported is not billable, so no-shows cost hours and earn zero.
Vehicle hours is where operators split. The Federal Transit Administration draws the line two ways:
| Measure | What it counts | Deadhead included |
|---|---|---|
| Vehicle revenue hours | Time a vehicle is scheduled for or running in revenue service | No |
| Vehicle hours (platform time) | From pulling out of the garage to pulling back in | Yes |
Platform time is the better base for a NEMT fleet, because the van, the driver, and the insurance cost the same whether the seat is full or empty. Clock-in to clock-out works too, as long as every van uses the same rule.
Why it beats revenue per trip
Revenue per trip rewards long trips, since mileage pay grows with distance. It says nothing about how long the trip tied up the van, or about the empty drive back. Revenue per hour folds both in.
A hypothetical pair of vans on the same Tuesday:
| Van A (short city legs) | Van B (long regional legs) | |
|---|---|---|
| Completed legs | 14 | 5 |
| Revenue | $588 | $650 |
| Revenue per trip | $42 | $130 |
| Vehicle hours, pull-out to pull-in | 9.0 | 10.5 |
| Revenue per vehicle hour | $65.33 | $61.90 |
Van B looks three times better per trip and still earns less for each hour on the road. Long legs bring long empty drives back, and here they add 1.5 hours to the day. Run the same comparison on your own vans before chasing longer trips.
Setting a target from your own costs
Your floor is your cost per vehicle hour. Add up what one van costs you for a month and divide by the hours it runs. A hypothetical van working 200 hours a month:
| Cost | Monthly | Per vehicle hour |
|---|---|---|
| Driver wages plus payroll taxes | $4,400 | $22.00 |
| Van payment and insurance | $1,500 | $7.50 |
| Fuel and maintenance | $1,800 | $9.00 |
| Share of dispatch, office, and software | $1,600 | $8.00 |
| Total | $9,300 | $46.50 |
At $46.50 an hour the van breaks even. To keep a 15 percent margin, revenue has to reach about $54.70 an hour ($46.50 ÷ 0.85). Any van, day, or contract running below that line is losing money on time, whatever its revenue per trip says. The break-even calculator runs the same math for a whole fleet, and the driver cost calculator works out the wage line.
What moves the number
- Empty time. Every unpaid mile between legs adds hours and no revenue. See deadhead miles.
- Idle waiting. A van parked for a will-call or a no-show earns nothing unless the payer covers wait time.
- Trip mix. Higher-paying service levels and private-pay trips earn more for the same hours.
- Density. More legs in the same shift raise trips per hour and vehicle utilization, which usually lifts revenue per hour too.
Tracking it without a spreadsheet
HealthRide’s reports show driver hours from real clock-ins and revenue billed for each payer, so both halves of the formula come from the same records.
Frequently asked questions
- Should deadhead hours count in the denominator?
- For a NEMT business, yes. Transit agencies report vehicle revenue hours, which leave out deadhead, but you pay the driver and run the van during every empty hour. Counting from pull-out to pull-in, or from clock-in to clock-out, ties the number to what the hour actually costs you.
- What is a good revenue per vehicle hour?
- There is no universal figure, because rates, wages, and trip lengths differ by state, payer, and service level. Work out your own cost per vehicle hour, add the margin you need, and that is your target. Compare vans and days against it rather than against another company's number.
- Is revenue per vehicle hour the same as trips per hour?
- No. Trips per hour counts completed legs, so it rewards short trips. Revenue per vehicle hour counts money, so a long trip that pays well per mile can hold its own. Read the two together to see whether a van is busy, paid, or both.
