Are You Paying Too Much For Elevator Maintenance?

January 2008
Have you ever considered what makes up the cost of elevator maintenance?

If you have a full preventative maintenance agreement with your service provider, we think you will be surprised to know what is included:

    Labor - Including Benefits To Service The Elevator
    Parts and Materials
    Travel Time
    Callbacks - When Trouble Occurs (during regular business hours)
    Warranty - To Repair and/or Replace Failed Components
    Overhead Costs - General and Administrative, Vehicles, Tools,
    Insurance, Training Profit

Direct labor makes up the bulk of the cost. According to most contracts that are adjusted annually for increases or decreases, approximately 85% of the cost of maintenance is for labor and 15% is for materials. Current 2008 labor rates vary across the United States from $31.66 per hour to $65.05 per hour for a journey level mechanic. For the purpose of this article, we will use the current labor rate in Southern California, which is $65.05 per hour.

        

EXAMPLE
Assume that you have one hydraulic elevator that serves 3 landings and you have a full preventative maintenance contract that covers all labor and materials with the typical exclusions of vandalism and underground cylinders and piping. Most elevator maintenance contracts include the wording “regular and systematic examinations, lubrication, adjustment and replacement of parts.” In our opinion, it takes a minimum of one hour per month to properly maintain this elevator.

Labor Including Benefits
    $65.05 One Hour 
Travel Time
    $32.53 1/2 Hour 
Callback Service (Average 4
per Year, 1/3 Hour per month)
    $32.53 1/2 Hour including Travel 
Materials and Parts Cost
    $30.00 
Warranty for Component Repairs and Replacement
    $12.00 
Overhead at 100%
    $97.58 
Profit at 10%
    $30.00 
Total Cost for One Month of Maintenance
    $299.69

     

How does your price compare?

    If you have a mid-rise building with geared traction elevators you should
    be getting about 2 hours per elevator per month of maintenance and for
    high-rise gearless elevators approximately 4 hours per elevator per month. The materials and parts cost as well as the warranty for component repairs and replacement are 2 to 3 times more than the hydraulic elevator. You can do the math from there.

If you are paying this amount or more for elevator maintenance:

    You are probably being provided with excellent service each month.
    You probably have very few trouble callbacks.
    You probably see no additional charges for extra work.

    If you are paying this amount or more and are experiencing problems
    and extra costs, you are paying too much.

If you are paying less than this:

    You are getting a great deal or
    You are paying extra for minor repairs or
    The maintenance is substandard and you are experiencing numerous trouble calls.

So, are you paying too much for elevator maintenance?

The above is based on labor rates as of January 2008. Contracts that have annual escalation clauses will experience a hefty increase in labor that will amount to 6% per year.

HKA Elevator Consulting, Inc. is an independent consulting firm that specializes in helping property managers improve the performance of their elevator systems and their elevator maintenance contractor. For more information www.hkaconsulting.com or 949-348-9711.
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