Lynn Ronan doesn’t know what to do with her new SUV. In April, Ronan, who owns a local Maids Home Service franchise, bought a new Mitsubishi Outlander with enough room for four employees and their cleaning supplies. She got a good deal on it, and it looks cool. “We want the car to stand out,” Ronan said. “We paint them yellow and put decals on them; it makes them look more unique than having a sedan.” Not a bad way to roll. But the hefty gas bill is making it a lot less cool. The Outlander was a bit of an aberration for Ronan, who has a fleet of nine Ford Focus wagons. The price of used Focuses (Foci??) has risen in recent times by more than 20% on eBay. The reason: the cars get good mileage, increasing demand for the once-out-of-vogue cars. Ronan used to bid between $6,000 and $9,000 for a wagon with around 30,000 miles. Now that price is closer to $11,000 or $12,000, she said. Her gas bills, meanwhile, have risen 25% from January to April. Like most small business owners, Ronan is pinched twice by gas prices – once as a business owner, and once again as a regular citizen cruising around on errands. Around Richmond, businesses of all stripes are facing these very same problems, forcing many to strategize about how to curb gas consumption. Some companies are adding fuel surcharges to customers while others are installing GPS units to make sure employees don’t go joy riding. But for most, driving less isn’t really an option. Despite their high-mileage-per-gallon fanfare, Hybrids haven’t proven to be much of a solution, either. For starters they’re expensive, going for around $21,000 for a new Toyota Prius. Secondly, the lifespan of hybrids are as yet unknown. (Not to mention they also have size issues.) You don’t have to read this site to know that the escalation of oil prices is already out of hand. Currently hovering around $3.50 a gallon in Virginia, prices for the precious commodity are up around 60% in the last year alone, placing a particular strain on transportation-dependent business owners like truck drivers, taxi drivers and landscapers. Jim Groome, president of Groome Transportation, said replacing the vans and Ford Crown Victorias (like a police car) that make up his fleet of 60 vehicles in Richmond is not an option. “The problem with hybrids, they aren’t designed like our fleet, for all that wear and tear,” Groome said. “Luggage also takes up so much room, and they (hybrids) have no room for luggage.” The State of Virginia has also avoided a large shift to hybrids, although there are several pilot programs to test the Ford Escape Hybrid. Michael Bisogno, fleet services manager for the state, said because most state cars are used for highway driving, hybrids don’t offer as much of a savings. “Right now, with the budget, the initial upfront cost precludes (us from buying them), plus there’s a lot of question marks about their life-cycle,” Bisogno said. Instead, the state is trying to make sure all new cars are of the compact variety (Chevy Cobalts, to be exact). Of course, whenever market forces exert new pressures on business, there’s opportunity for a service or product that can cut costs. Scooter sales have been rising locally, although they probably aren’t winding up in business fleets. Chelsea Lahmers, owner of Scoot Richmond, told the Times-Dispatch that “she has sold as many scooters so far this year -- an estimated 50 -- as she did all of last year.” For the record, scooters can get up to 100 miles per gallon. Mostly, though, businesses are trying to stretch a gallon of gas as far as they can. For Bruce Styer, president and owner of Styer Landscaping, that means keeping trips to the nursery to a minimum. So far, he’s been hesitant to pass along fuel surcharges to his customers. “If it gets worse, we might have to consider that, but I don’t like jumping the gun,” he said. “I know that last time our suppliers put a surcharge on us, it never came off, and that’s not very fair.” At Maids Home Services, Ronan has also avoided adding surcharges to her customers. Instead, she’s been chatting on the franchise intranet to learn how other franchisees are cutting costs or changing their fleets. Hybrids seem too expensive, but several owners recommended Toyota Corollas, Ronan said. She’s also looked at buying a Pontiac Vibe, which can get more than 30 miles a gallon on the highway. “What we’re trying to do now is look at what we can do to make it more efficient,” Ronan said. “We’re asking customers if they can switch days, and asking if they can be more flexible with times.” In the meantime, she’s having to grit her teeth and put that cool new SUV to work. Further reading: Pump it up, Entrepreneur
How Fleets Tackle Rising Fuel Costs, Automotive Fleet Magazine
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