You asked for it and we listened. In this column, we ask operators of all sizes and from all walks of the industry a question about their business and report their answers so you can assess how your own company compares to your peers. If you would like to participate, please email Rob Smentek at email@example.com for next issue’s question.
TOPIC: With the rise in gas prices, have you recently added a fuel surcharge? If so, have you experienced pushback from clients? What are gas prices in your area?
A gallon of unleaded 87 octane fuel in Northeast Ohio is average about $2.78 to $3.09. I instituted a fuel surcharge of 6 percent over 10 years ago and I have never had any pushback from the client. I’m unsure if that’s because they weren’t looking at their bill that closely or they just elected not to complain because the service we provided was superb and justified the cost.
I feel you don’t give them the opportunity to complain when you deliver on the service you are supposed to be providing. But, do just one thing wrong (arrive a few minutes late, dirty car, no water, etc.) then you leave yourself open to nitpicking—that’s when I’m sure all the little extra line items will be brought up.
Kirk Bagger, CEO
Captains Car Service in Parma, Ohio
Gas prices in our area range from $3.00 to $3.30 for regular unleaded and $3.10 to $3.40 for diesel. We have not added a surcharge as of late because it is already included in our price. As such, we’ve had no push-back from clients.
Nick Boccio, General Manager
Buffalo Limousine in Buffalo, N.Y.
Yes, fuel prices are going up, however Texas has remained among the lowest in the nation. While our local pricing for fuel is in line with our margins, our profits are being eaten up by elevated fuel costs when we travel to different parts of the country. We will begin instituting a rate increase (not reflective in a line item fuel surcharge—that just angers people) for all our over-the-road charters. We currently have a modest 7 percent fuel charge (not a fuel surcharge) that is reflected in our everyday rate structure. Surcharges “have to be removed”—rate increases remain in place.
Eric Devlin, President/Owner
Premier Transportation in Dallas, Texas
We have not added a fuel surcharge. The price of gas in my area is approximately $2.89/gal.
Mike Hartmann, President
Stardust Limousine in Kiel, Wisc.
Our fuel surcharge is 9 percent of the base rate. Most of our fleet requires premium fuel and average price is currently $3.50/gal. in Boston. We have had no pushback from our clients.
Mark Kini, Founder & CEO
Boston Chauffeur in Beverly, Mass.
We do not charge any fuel surcharges, even though China has a very high gas rate. The current price is approximately 7 RMB per liter, which is approximately $1.13 USD (i.e., $4.52/gal.).
Cathleen Lamprecht, CEO
BCDLIMO-CHINA Services in Shanghai, China
We try and keep our pricing simple. No one likes seeing “fees” so we have actually gone in and raised our hourly rates and transfers. We have added $8 for every hourly rate and $5 for all transfers. As far as pushback goes, we have received very little. We do have the occasional person calling in wanting an airport transfer saying we are “too much,” but it doesn’t happen as often as one would think. Regarding hourly rates, I haven’t had a single repeat customer even mention or comment on the new rates. That being said, anyone who had a hard booking with us wouldn’t receive a price increase, it would only be the trips going forward.
On January 1, 2021, the price of unleaded fuel was $2.23/gal.; as of July 27, it is $3.19.
Denny Leihos, President
Avant Garde Limousines in Carmel, Ind.
We haven’t added a fuel surcharge. I only include a surcharge for pickups and drop-offs 30 minutes or more from my office and I just add on hours to their hourly rate. We’ve never gotten any pushback as clients know that it takes time to get to them. There aren’t a lot of limousine companies in the area, and sometimes we’re several hours from the client. Currently, fuel in Central Wisconsin is $2.99 to $3.09.
Karen Lotts, Owner
A Knight Rider Limousine Service in Cadott, Wisc.
I don’t like the idea of “this surcharge and that surcharge”—it’s all in the cost of doing business. My favorite restaurant doesn’t charge me extra when espresso beans fluctuate in pricing for my espresso martinis. They simply raise the price. Yes, it’s simplified, but it’s honest and truthful without nickel-and-diming me to death.
We raised our rates recently. Some clients have questioned it; then again, some clients question everything. Once explained, they seem to understand. It doesn’t always mean that they like it, because who really likes price increases when we’re the ones paying for things? However, it’s a fact of life. Prices go up.
We’re paying approximately $3.35/gal. for gas right now.
Tracy Salinger, President
Unique Limousine in Harrisburg, Pa.
All of our contracts have a sliding scale fuel surcharge in place, for both gasoline and diesel fuel. The variable rate is based on our region and adjusts with the price we pay on a monthly basis. Our clients appreciate the transparency from the onset of the contract negotiations, thus we have not had an issue with the implementation.
Jeff Shanker, Chief Strategy Officer
Black Tie Transportation in Winston Salem, N.C.
We’ve added a 10 percent fuel surcharge on out-of-town bus charters. However, our local rates have stayed the same. Fortunately, we’ve gotten no pushback at all; clients seem to be understanding of the current circumstances.
Paul Thompson, President
Santa Fe Valet/Accent New Mexico in Santa Fe, N.M.
When the gas shortage hit the Southeast, we went from a 12-percent service transportation fee to a 15-percent fee; we are still doing so and have not had a single comment about it. Prices for regular unleaded are around $2.89/gal. here in Charlotte and plenty of availability now. We had about 3 to 4 weeks of having a hard time finding gas. Gas was about $2.49 before the gas company got hacked.
However, we don’t call it a gas surcharge—it’s just a service transportation fee, which, if asked, covers all of our costs to make sure drivers are background checked through the local police department and federally through the FBI; driver training classes; and all our city and state permitting fees for our vehicles and drivers required by local and state law enforcement as well as federally with the Department of Transportation.
James Weymann, Founder/President
SilverFox Chauffeured Transportation in Charlotte, N.C.
We haven’t added a fuel surcharge this year. Currently, we’re paying $3.19/gal. for diesel and $3.09/gal. for unleaded.
Scott Woodruff, President
Majestic Limousine in Des Moines, Iowa
We’ve loved hearing your answers to our benchmarking questions—but we always welcome suggestions for future topics, too!
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