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Pizza delivery drivers aren't rolling in dough.
Valerie Aliaga's drivers at Big Mouth on the Run in North York are given the $1 per delivery fee she charges customers, but that barely covers their expenses, she said. And you can't trust people to tip well, even in the best economy, she said.
Like Aliaga, business owners whose profitability is tied to the price of gasoline could soon have to make changes to keep up with escalating costs.
They might be reluctant to increase prices, though, at the risk of spooking wary consumers in an economy that's still finding its legs.
Aliaga said increasing her delivery fee is a tricky proposition, even as the price of a gallon of regular unleaded seems to be relentlessly pushing toward $4.
"We've had the $1 in place for about four years, and people still complain about that $1," she said. "I would think that not only would there be some verbal abuse (if she increased it again), we would lose customers."
But she might not have a choice, as drivers have already approached her with an ultimatum.
"They're willing to give me about another month and see how the gas goes, then if it hasn't come down, they need to sit down and go over their gas bills and their mileage because it's not paying them to deliver anymore." she said.
Drivers use their own vehicles and pay for the gas. They're paying higher insurance premiums and
have a lot of wear and tear on their vehicles, she said. A typical eight-hour shift involves about 30 deliveries, driving about 100 miles, she said.
No increase yet: At Royer's Flowers, vice president of operations Barry Spengler said the company hasn't changed delivery fees and doesn't intend to unless prices reach an "astronomical" level.
The company is taking a broader view, considering the current price spike a "blip on the radar," he said.
"If it goes up to $4 or $5, then you need to take a look at it again," he said.
But increasing prices now would be akin to gouging, he said.
Area gas purchasers said it's anyone guess how long prices will continue to climb, and where they'll peak, as turmoil in the Middle East continues.
Rutter's Farm Stores president Scott Hartman said the trouble in Libya and elsewhere is only half of the problem. Refineries are also preparing to make the switch to a more expensive blend that's used in the summertime, which is the peak driving season, he said.
He said the international turmoil has yet to affect supplies, but speculators drive the price up anyway.
"There's nothing imminent that's causing an oil shortage today, but that's not what Wall Street works off of. They work off of some level of fear and speculation, making bets that drive (the price) up," he said. "I think it will end when the Middle East has found some stable ground."
Long-term speculation: Royal Farms' director of gasoline trading, Rob Rinehart said he thinks the premium being placed on gas for the Middle East turmoil is "going to stick around for the foreseeable future."
"These conflicts could spill into other countries," he said. "I think a lot of it's speculative, but Libya is a million-barrel-a-day supplier."
Americans will be at the mercy of other countries and speculators until they change the way they're thinking, he said.
"Big picture, this country needs a shift in energy policy ... toward an alternative fuel such as natural gas," he said. "I'm not even going to give you a number (for where the price of gasoline could peak)," he said. "If the wrong chain of events happens in the Middle East, I'm not even sure it will matter. A wild example, Iran had two warships in the canal, taunting Israel. If the wrong thing happens there, I don't know that $4 gas or $5 gas is going to be the biggest problem if those two countries go to war. I don't think we're dealing with the most rational folks over there."
--Reach Christina Kauffman at 505-5436, ckauffman@yorkdispatch.com, or follow her on Twitter at @dispatchbizwiz.
