Operations

Operators Adding Fuel Surcharges During Prom Season

Posted on June 11, 2008 by LCT Staff - Also by this author - About the author

BROCKTON, Mass. — Faced with escalating gas prices, many limousine drivers are tacking on surcharges to cover soaring gas prices this prom season. MSM Exec Limousine owner Michael Quish says he is now adding an 8% surcharge to customers’ bills to make up for the high price of gas. Quish, who opened the business five years ago on Route 44 in Raynham, said the steep increase in gas prices during the past year, combined with tunnel and airport fees, have affected his business, which is “90% airport transportation.”

He said the added surcharge has now become necessary for limousine services and other businesses involved in transportation.

“It’s the same with the airlines and everybody else,” Quish said. “The increase in the price of gas is being passed on to the consumer.”

As far as his business, Quish said that “for every $100 trip, another $8 is now being added to the bill.” Richard Kane, president of the National Limousine Association, was quoted recently in the Limousine & Chauffeured Transportation Magazine saying that rate increases implemented in response to higher fuel costs range from 8% to 20%. He said limo operators have suffered first-quarter losses of between 10% and 30%. “It is unfortunate, but we have to pass the costs on,” said Kane. John Sawyer, owner of Classic Limousines that is operated out of Stoughton and Brockton, said airport service represents a very small percentage of his business.

“We do very little airport service,” Sawyer said. “It represents only about 10% of our business since the runs are very low profit and the competition is very high. The public also doesn’t want to pay a lot of money to go to the airport.”

Sawyer said his business depends mainly on seasonal work associated with weddings and proms. “You can make enough during this time to support you for the rest of the year,” he said.

He said that currently the company is not adding a surcharge to customers’ bills to make up for the high price of gas, “although everybody’s doing it.” Sawyer said another mounting expense for his company involves advertising. “We spend almost $4,000 a month on Yellow Pages, and that includes the Internet. The swing is now going toward the Internet, but you have to be on both pages.”

Source: Enterprise News

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