Sharply rising gas prices earlier this year have
prompted many operators around the country to add a
fuel surcharge to their fees.
LCT’s random sampling of operators showed that
most were choosing a percentage-based surcharge,
which sometimes changes based on fluctuating gas
prices, while others were opting for a flat rate.
A few have chosen to stay away from surcharges.
Are there federal or state regulations governing fuel
“You can charge whatever you want as long as the
[client] agrees,” said Jon Chester of Southern
California-based Limousines by Linda, who is also the
president of the Greater California Livery Association
and a lawyer.
As long as the surcharge is disclosed in some way on
the service contract, he added, it is perfectly legal.
Chester said he has added a 3% fuel surcharge. The
general consensus among California operators, he
said, is that most have imposed a surcharge, which
comes as no surprise since the state’s gas prices
passed the $2 per-gallon mark early this year.
Some operators attending a recent GCLA meeting
confessed to adding fuel surcharges ranging from 2%
to 10%, while others said they have instituted a flat rate
because it is easier to justify and work into contracts.< p="">
At Presidential Limousine in Denver, Michele Rossi
said she is charging a fuel surcharge but buries it in
what she calls a 5% administration fee, which she
charges regardless of gas price.
When gas prices are high in Denver, like March’s price
of roughly $1.65 per gallon, the fee helps pay for fuel,
she said, adding that the fee pays for other expenses
when gas prices are lower.
“If the gas price is down to 99 cents per gallon, you
don’t get customers asking why you are charging a fuel
surcharge,” she said. “This way there are no hard
feelings. We don’t have to fluctuate the charge and get
Rossi added, however, that she believes most
operators in Colorado do not have a fuel surcharge.
Michael Zappone of Newburg, N.Y.-based All
Transportation Network said many operators are too
quick to jump on the surcharge bandwagon, whether
the issue is rising gas prices, insurance or worker’s
It might be healthier, he said, if operators raised their
base rates to reflect additional expenses instead of
continuously adding various surcharges.
“At some point, you have to look at your cost of doing
business and adjust your rate accordingly,” he noted.< p="">
Even with gas prices ranging from $1.80 to $2 a gallon
in New York, Zappone has not yet added a fuel
surcharge. He said he would consider it should gas
prices stay high for a long period of time.
If gas prices fail to roll back to their previous range of
about $1.30 to $1.70 in New York within a 90- to 120-
day period, he said, a fuel surcharge might be
However, Zappone suggsted operators should be as
equally willing to remove a surcharge should economic
conditions improve as they are to add one when
Such is the philosophy at California-based Music
Express. The company implemented in February a
temporary fuel surcharge, which will be eliminated as
soon as gas prices fall back to what Music Express
officials called “a reasonable level.”