Operators around the country are dealing with the
uncertainties in cost of fuel in a variety of ways, from
adding fuel surcharges to clients’ bills and using fuel
card accounts, to fuelling up in nearby less-expensive
One even went as far as purchasing a gas station.
“I decided to be my own best customer,” said Robert
Alexander, president of RMA Chauffeured Transportation, a
50-plus-vehicle operation in Rockville, Md. He bought a gas
station nearly two years ago, and said he intends to keep
it as long as it remains profitable.
A more common approach, however, was for operators to
transfer part of the additional gas price onto clients’
invoices in the form of a fuel surcharge.
A random polling of operators by LCT earlier this year
showed that some operators were charging a flat fee while
most were opting for a percentage-based surcharge that
fluctuated with gas prices.
Among these operators is Richard Kane, president of
International Limousine Service in Washington, D.C. He
recently told LCT his average surcharge in 2003 was 5%,
including gratuity, which he charged against gross revenue.
He said he readjusts that number throughout the year, based
on information from a Web site that lists gas price trends
by region of the country
But Kane wipes the slate clean at the beginning of each
year, reformulating his rates every January and removing
“We then initiate a surcharge [again] only after a three-
month trend of higher prices,” he says. “We don’t adjust it
every time it jumps up or down.”
Another approach is to use fuel-card accounts.
“We’ve been on fuel cards for a number of years. We go to a
fuel facility that’s not open to the public; you have to
have an account there,” said Steve Cunningham, president of
Carey Phoenix and Las Vegas-based Fox Limousines. “We’re
not paying any better rates – to be honest with you, it
might actually be a couple of cents higher – it’s mainly
for the convenience of having a system.”
He explained that since the fuel facility has cameras and
requires the chauffeurs to punch in a PIN code that’s
traceable only to them, the system indirectly has saved
Cunningham money by eliminating employees submitting gas
receipts for personal vehicles.
Likewise, some gas stations offer a special rate for
commercial clients. Exxon Mobil, for one, offers a fleet
card that features a rebate of up to 3.5% off monthly
purchases along with customized security features and
detailed purchase activity reports.
Some operators, often based in border-state areas, also
fuel up in the state that has the lowest price – and in
certain areas that can save a lot of money.
In the Chicago area, for example, in October, gasoline in
Illinois was 40 cents a gallon more expensive than in
-- Rebecca Christiansen & Neil Weiss
Price of Gas Crawls Down
The U.S. average retail price for gas at the pumps
decreased slightly for several weeks in a row last month
and was expected to keep crawling – however slowly –
Softening demand, coupled with greater supply, led to this
price drop, the Energy Information Administration reported
The U.S. average retail price for regular gasoline was
$1.59 per gallon, 17.8 cents higher than one year ago but
still lower than the spike in prices experienced in the
Get More Mileage For Your Money
IRVINE, Calif. — Gasoline prices are a major expense for
any limousine operator. But there are some ways to cut
costs. Kelley Blue Book, Enjoythedrive.com and Response
Insurance offer these money-saving tips:
• Gasoline is densest when it is cold and drivers are
charged based on volume. Buying gas during the coolest time
of day, usually first thing in the morning, yields more gas
per gallon, thus leaving you with more gas for your money.
• New spark plugs and wires can make a difference in
gasoline mileage. An upgrade to high-performance spark
plugs and low-resistance plug wires can improve fuel
economy and performance, as well as reduce emissions.
• Four tanks of gasoline with "Techron" can clean your fuel
injectors as well as most professional-grade cleaners.
Clean injectors will help your vehicle get up to 5% better
• Check the air filter and tire pressure. A clogged or
dirty air filter can slow down the car and use more
gasoline. A clean filter will promote less gas waste. Under-
inflated tires could also cause excessive drag, slowing
down the car and using more gas.
• Accelerate normally from a fully-stopped position. Avoid
flooring or stabbing the gas pedal since that action pushes
more fuel to the engine than is needed to move forward and
• Don’t idle for more than two minutes. When the car isn’t
moving and the engine’s running, you’re getting 0 mpg.
• Lighten the car’s load by taking unnecessary items from
the trunk. Every 200 pounds of weight reduces gas
efficiency by one mile per gallon.