Industry Overview

• $1 billion/year industry with 35,000+ towing companies in US
• Bill Georges, president of Mike's Recovery Service (Saginaw, Michigan) - second generation owner, 38 years in business
• Company has 3 locations across central Michigan, classified as "generalist tower"

Types of Towing Services

• Light duty: passenger cars
• Medium duty: RVs, motor homes
• Heavy duty: commercial vehicles, trucks, buses
• Commercial accounts: ambulances, school buses, garbage trucks, cement trucks, tractor trailers, FedEx, Amazon, UPS

Equipment Costs and Operations

• Standard light duty tow truck: ~$100,000
• 40-50 ton wrecker: $700,000-$900,000
• Large rotator (75 ton or 100 ton): $1.5-$1.8 million
• Complete heavy operation setup: ~$2.5 million total equipment
  • Two flatbeds: $170,000 each
  • Skid steer: $90,000
  • Forklift: $60,000
• Insurance: $2,000-$5,000/year per truck
• Driver compensation: 20-30% commission per job
• 24/7 availability required

Pricing Structure

• Typical breakdown: $78 hookup + first 5 miles, $5 each additional mile
• Hourly rates for complex jobs
• Largest bill example: $50,000+ for overturned acid tanker
• Non-consensual tows: up to $147 for simple impounds
• San Francisco impounds: $500+ with administrative fees
• Storage fees: $30-$40/day

AAA and Insurance Roadside Issues

• AAA/Geico pay significantly less than standard rates ($35-$40 vs $78)
• Towing companies prioritize cash customers over insurance calls
• Creates delays for roadside assistance customers

Operational Challenges

• Max Kareemi, H&M Roadside (Pensacola, Florida): car recovery from river example
  • 20ft deep, muddy water
  • 4.5 hours total operation
  • Required volunteer search and rescue divers
• Modern car design problems:
  • Manufacturers removed standard tow hooks
  • Eyelet hooks in bumpers unreliable
  • Drivers must hook to suspension with V-shaped straps
• Geometry and angles crucial for safe towing

Safety Hazards

• Bill Georges lost driver to drunk driver
• "D drivers": dumb, drugged, distracted, drowsy
• Traffic passing at 80-90 mph while working
• Max Kareemi: hit twice, caught mirrors twice
• Local driver nearly killed in hit-and-run, forced to retire
• "Hero tows" terminology for dangerous roadside rescues

Non-Consensual Towing

• Police-ordered: DUI, suspended license, no insurance, improper plates
• Private property: blocking driveways, no-parking zones
• University of Michigan football games: 110,000 attendees create massive trespass towing
• Higher fees than consensual tows ($147 vs $78)

Impound Lot Operations

• 30-day notification period after towing
• Daily storage charges accumulate
• Fenced, zoned, lighted, staffed, surveilled property required
• Towing company liable for vehicle condition until pickup
• Abandoned vehicles after 30 days can be sold at auction
• Proceeds beyond towing/storage costs go to state
• Many vehicles don't cover costs, creating losses

Predatory Towing Practices

• Teresa Murray, US Public Interest Research Group director
• Targets: college campuses, communities of color, seniors, low-income apartments
• Tactics:
  • Towing vehicles hour away from pickup location
  • Cash-only payments
  • Limited hours (not after 5pm, no weekends)
  • Frivolous reasons: tire pressure, parking alignment, missing license plate screws
• "Patrolling" - trucks waiting around corners at hot spots
• Apartment complex example: 182 units, 65 parking spaces
• Self-loader trucks: can hook car in seconds without leaving cab
• Drop fees: ~50% of full tow cost if caught in act

Kickback Schemes

• Towing companies pay property owners per car towed (~$20)
• Incentivizes excessive towing
• 2/3 of states have no laws banning kickbacks
• ~50% have no caps on towing/storage charges
• 40% don't require warning signs on private property

Regulatory Response

• Michigan proposing vehicle code changes
• Requirement for photographs before private property towing
• Bill Georges supports eliminating bad actors while protecting legitimate operators