Why Startup NEMT Operations Need Pay-As-You-Go Pricing

By June 25, 2019

With the baby boomers getting older and mobile technology developing at a fast pace, the world of NEMT (non-emergency-medical-transport), paratransit, and other microtransit options is getting bigger by the day. 

If you’re looking to take advantage of this market to start your own provider service, you’ll need a thorough understanding of the industry: everything from the buzz around microtransit to understanding which brokers operate in your area

Before you even start giving rides, NEMT providers must also do something crucial: pick which software they are going to use for dispatch and other operations. These days, there are several great software options out there--and choosing what’s right for your company could mean the difference between success and no contracts! 

Choosing the Right NEMT Software

A big element of choosing the right dispatch/operations software for your NEMT operation is ensuring that its functionality is up-to-par and it offers responsive customer service. Any modern program worth its cost will provide things like real-time vehicle location tracking, ridership reporting tools, and even mobile apps or virtual gateways for users. Good programs may even have cloud data back-up and 24/7 customer support to prevent and address service outages.  

There is another aspect, however, that some startup NEMT operations sometimes get wrong, especially considering how complex the software is. Just like buying a whole shiny fleet before the first ride has even been booked, some providers pay fairly large sums of money up-front and then on a monthly basis for their dispatch software, and find they do not yet have the demand to support the costs of the program.

In an industry that can have tight margins, startup NEMT operations need to think clearly about how to grow without going under from lack of funds. Besides not buying multiple vehicles before the first contract is secured, NEMT operations can save money another way by avoiding paying too much for software that isn’t needed yet.  

Although money-saving options do exist, especially around smaller dispatch software companies, most of the bigger software providers only offer the option to purchase the entire thing up front and then pay a monthly fee for use of it.

What is Pay-As-You-Go Pricing? 

You may be wondering what is meant by “money-saving-options” for NEMT software, and it turns out there is a crucial difference in how software providers sell their product. In fact, some offer “pay-as-you-go” pricing. This type of pricing only covers the software being used without having to get into an annual commitment or steep upfront purchase fee. 

Modern NEMT software will become an integral part of how your NEMT company operates, so it’s important to ask software providers being considered if “pay-as-you-go” is something that is offered or that they might consider for your account, at least until you have a steady stream of contracts coming in and solid ridership numbers. 

As more NEMT and other forms of microtransit come into the market, picking “pay-as-you-go” pricing might mean the difference between getting an edge up on the competition or missing out, especially once you see what full-service NEMT dispatch software can cost. 

Unfortunately, looking for a NEMT dispatch software company that provides no upfront commitment, and instead relies flexible pricing based on things like duration of the company’s contract(s) involved, can be difficult--but as stated above, the financial savings can be worth it, and even crucial to the survival of your company. 

Think about it: besides facing stiff competition from other providers, many fledgling NEMT or TPS companies may not get a guarantee from the brokers they are using to arrange contracts. Without guarantees, new companies might not be entirely sure how many rides they will book or what the duration of these business relationships will be. 

This is where pay-as-you-go pricing really shines. Especially for new NEMT operations, the broker problem essentially means that the number of customers using your services may be very hard to predict. Having a slow month? Don’t pay for software services you don’t need, and use the saved money to work on outreach and partnership efforts instead. Pay-as-you-go pricing allows companies to not be constrained by the risk of contracts or commitments, a crucial step when an NEMT company is entering the market and trying to make a name for itself. 

Pay-As-You-Go is Only One Part of the Puzzle

So, if you’ve read this article, you know that there are several things you should be looking for in your NEMT dispatch software hunt. Good technology, room for growth, and excellent customer and downtime support service should go without saying. If you’re curious to read more about NEMT dispatch software or are ready to modernize your system, check this article out as part of your research.

The bottom line in NEMT software is that whichever choice you make will have a huge impact on every area of your business, from what types of contracts you’re eligible for, to how much payroll you’re spending reconciling ridership numbers. Good software will always require some investment of both time and money, but there are still options to help small companies make the most out of their investments. 

Ultimately, freeing yourself from the risk of expensive “all-inclusive” software contracts by patronizing companies that use a “pay-as-you-go” model for pricing may not get talked about as frequently, but eliminating risk wherever possible should be one of the first priorities of any new company, especially one in an industry as tight as NEMT/paratransit. 

For prospective business owners just starting out or even older NEMT providers, there is plenty more to learn about NEMT software; read about changing providers, get better understanding about what funding sources you may consider for your NEMT operation, or even brush up on the customer service skills that will keep your riders satisfied.