I have been changing my labor rate by $.50 an hr a month for about the last year. It puts the labor price up slow enough that most people wouldn't notice it. Your labor price needs to be based on what you have to offer not so much by your competition. I started by pricing my competition but decided I needed to know what it costs me and then price the labor around that. I really don't care much what my competition charges because I am offering things that my competition can't/wont.
We also almost always charge at least 1/2 hr for diag time. You must get something for that time invested, especially if they decide they don't want to fix it. You also need to be able to pay for that scan equipment, updates, ect.
We also price labor on the bump. 1.2 hrs is 1.5 We do everything in 1/2 hr labor increments. Makes it easier to price as well and also gives you the bump when the labor is an odd time.