High Gas Prices Results in Higher Costs From Businesses

Aug. 28–The long-haul truckers are getting creamed. So are the airlines. In fact, anyone whose business it is to transport goods across country is feeling the effects of record gas prices.

But those folks who make a living hauling commodities or people across town are paying the price as well: the florists, the pizza delivery drivers, taxicab operators.

They are adjusting their fees, and in some cases the way they do business, in order to keep from tanking.

Here are a few of their stories.

Shawn Stackman manages the kitchen at Spud’s Pizza Parlor, 7025 Pacific Ave., Tacoma.

Beginning in about February, her two delivery drivers began complaining that they were losing money driving pies to homes and businesses.

“They were complaining and complaining,” Stackman said.

She felt their pain. A Graham resident, she commutes about 30 miles one way to get to work. The cost of filling the tank in her 1989 Ford has gone from about $20 to about $40 over the last year, she said.

So twice in the last six months she’s increased the amount she pays her drivers per delivery. Just last week it went up another 50 cents per delivery, to $2, she said.

Some of that cost has been passed on to consumers. About a year ago, Spud’s jacked up the price of pies, in part to help offset rising fuel costs.

But the business is eating the latest increase paid to the drivers, Stackman said. In a competitive market like pizza, there’s a fine line between covering your costs and driving customers to other parlors.

“It doesn’t make things any easier,” she said.

For years, Crane’s Creations has used full-sized vans to deliver flowers and gifts throughout the South Sound.

The vans get about 12 miles to the gallon, but with gas prices low the company got by just fine by charging a $5.95 delivery fee, owner Bob Crane said.

That is, until the price at the pump began rising.

About a year ago, the delivery fee jumped to $7.50, Crane said, and about a month ago the company decided to try something new.

“We felt it so much that we bought a new fuel-efficient car,” he said.

That car — a Scion XB — gets more than 30 miles per gallon, Crane said. The monthly gas bill for the Scion is less than half the $600 he pays to keep each of his four full-sized \Fords and Chevys running.

“It’s just an experiment, but if it keeps up this way, we may get a couple more,” Crane said.

Even with the savings realized from the Scion, the company is considering raising the delivery fee again soon to $7.95, he said.

Shorty Hubbard sums up the impact of increasing gas prices on his business this way: “They’re killing us.”

Hubbard and his 1993 Ford Crown Victoria (22 miles per gallon) make up Shorty’s Veteran Taxi.

He caters to folks without much cash — disabled veterans, the elderly, families of young enlisted soldiers — so he tries to keep his prices low. Until July, he charged $1.60 per mile. Then he upped it to $2 per mile. He’s still losing money, he said, and customers, too.

“With the fee increases, people just don’t want to take a cab anywhere,” Hubbard said.

He estimates his business has dropped by more than 50 percent over the last year.

Hubbard said he’s thought of trading in his Crown Vic for a more fuel-efficient model but just can’t afford to. So he babies his car, which has more than half a million miles on the odometer, and hopes that prices will fall.

“If I had to do it all over again, I wouldn’t be in this business,” he said.

—–

To see more of The News Tribune, or to subscribe to the newspaper, go to http://www.TheNewsTribune.com.

Copyright (c) 2005, The News Tribune, Tacoma, Wash.

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

TM, 7203, F, GM,