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Wednesday, May 12, 2004 - Page updated at 07:43 A.M.
How soaring gas prices affect everyday life By Seattle Times staff and news services
The Energy Department forecast the national average for regular gasoline would peak at more than $2 a gallon by June and remain high through September. On the West Coast, the average for regular is already $2.20 a gallon. High gasoline prices pose a risk to the economic recovery, reducing spending power and contributing to inflation. Lower-income drivers are hit particularly hard because fuel costs make up a larger percentage of their incomes. Everyone who drives — and even those who don't — feel the pinch when gas prices jump. Here's a look at how the high prices are affecting some Seattle-area businesses and consumers: Delivery drivers squeezed
By the end of this year, the increase in gas prices alone will end up being more than the $850 Subaru he bought to make deliveries. Gas prices rise but tips don't, said the 56-year-old Russian immigrant. Domino's franchises around Seattle pay drivers about 80 cents per delivery in addition to an hourly wage; delivery people buy their own gas. Tsvi relies on tips. The Monroe resident makes the 70-mile round trip to work at the Queen Anne branch because customers tip better in that neighborhood, he said. On a good day, 15 of 20 customers will tip him, usually a buck or two, Tsvi said. He has been delivering for eight years, five days week. He uses about 750 gallons a year on the job and another 750 gallons a year commuting from Monroe and for personal use. Tsvi usually takes summers off to travel around the country with his wife. But he's reconsidering this year's trip, since taking two months off and burning fuel in the motor home might not be a good idea, he said. He has done the math. At $2 a gallon, Tsvi spends about $1,500 a year on gas for work. A quarter-per-gallon increase would kick his fuel cost to about $1,690. A 50-cent increase would raise it to about $1,880. It's too scary to do the math beyond that, he said. But he shrugged his shoulders: "What else am I going to do? Where am I going to find another job?" 60-cent taxi surcharge ignored Taxi driver Dennis Roberts has worked for two months without a day off, he said, just to offset the rising fuel cost. The Yellow Cab driver is paying $75 more weekly in fuel compared to last month, and his next cost-cutting measure may be shutting off the air conditioner when summer heats up. "AC burns more gas." Fuel cost is presenting a dilemma that passengers don't realize, said the 15-year veteran. In April, the city of Seattle authorized a 60-cent taxi surcharge to help drivers, who have to pay for their own gas. Robert said no passenger has paid him the 60 cents, even though the city-issued surcharge placard is posted above the front passenger seat. Roberts said customers think the surcharge is a scam. Other drivers have complained that customers tip less because of the 60-cent charge. He tried to enforce the surcharge when it started, only to see an elderly woman hop in expecting a $3 fare. He didn't have the heart to make it an issue. Besides, Roberts said, the 60 cents is not enough to cover higher fuel expenses; he wants the Seattle City Council to raise the taxi rate — currently $1.80 per mile. When he's driving passengers to and fro, he keeps an eye on posted gas prices. He shakes his head. "I never thought I would see the day where $2 (per gallon) is considered cheap." Florists hit from several sides
But to Hansen's Florist, a small business in Georgetown for 60 years with another location in Fremont, fuel costs matter: When they go up, the shop has to pay more for flowers shipped from Canada. It costs more to send its delivery van to homes and offices. Customers have less pocket money to spend on things like flowers. And because big grocery stores now sell wholesale flowers in bulk, there's pressure to hold prices down. "We're getting hit at so many angles," said Nick Nicoloudakis, general manager of Hansen's. "It hurts enormously." Hansen's tries to find ways to hold fuel spending down. Nicoloudakis now fills up the shop's delivery van — which travels about 500 miles a week — only at a nearby gas station, where it costs about 5 cents a gallon less. He said he will probably start sending hourly workers home early on slower days to save on labor. That puts less money in the employees' pockets. Nicoloudakis said he doesn't like to do it, but he suspects other workers can relate. "It's pretty simple economics," he said. "Our costs are going up, but you have to keep your prices low enough for the market." Landscaper raises prices Mt. Fuji Gardening & Landscaping sends heavy-duty trucks and equipment from its base in Auburn into neighborhoods around the Puget Sound area every day. It has no choice. So when fuel prices rise, it tries to find other ways to stay in the black.
"I think it's the right thing to do," Arima said. "My guys do a good job, they take care of me, and I take care of them." Fuel prices aren't as big a cost as health insurance, and they don't produce as much sticker shock because they sneak up in increments. The business has three trucks that get about 10 to 13 miles a gallon, and travel about 100 miles a day, Arima said. But because of higher gas prices, Arima figures it costs an extra $60 a week to run each truck, which translates to $8,000 more this year for the fleet. Arima has been looking at a large extended-cab truck that gets similar mileage but that would enable his crew to car pool and haul all its gear. Despite the attempt to adapt, the rising fuel costs are unavoidable. He recently had to tell a customer he couldn't deliver a specialty lawn ornament on time because the California wholesaler insisted on waiting until he could put together a bulk shipment. If gas prices climb to $3 a gallon as some predict, Arima said he'll do his best to adjust. Hybrid cars are in big demand Chad Gnirk sells small Hondas for a living, but he drives an SUV and he's amazed by what he's seen recently. One customer who came to his Auburn Honda dealership with a Chevy Suburban traded it in for a gas-electric hybrid car. Another traded a Porsche for a hybrid. Since fuel prices started climbing in the past several weeks, Gnirk said people have started unloading gas guzzlers. He and his colleagues at Hinshaw's Honda have started shipping them to other dealers with more experience at selling them. Gnirk said a growing supply of used SUVs has driven the resale price down by as much as $1,000. The hybrids, on the other hand, are in high demand and short supply, so prices on those are up. "People have come in and said, 'I need to get out of the gas guzzler. I just want to get into a car with decent mileage,' " Gnirk said. Gnirk, like any good salesman, helps with the math to encourage people to buy the smaller car. He asks them how many miles they drive in a year, what kind of mileage they're currently getting, and what it costs, tank by tank. "You can fill a 20-gallon tank and get 270 miles out of it, or you can fill a 12-gallon tank and get 400 miles out of it; that's a big difference," he said. Down auto row in Auburn at Scarff Ford, general manager Tom Iddings said, with a sigh of relief, that sales of the bread-and-butter Explorer and Expedition SUVs are steady. He said he has not seen customers trade in their vehicles for smaller cars or trucks. But he's wondering how customers will react if gas prices keep climbing. "I don't know what the magic number is that will make people resist, but we haven't seen it," Iddings said. "If you can afford a $50,000 truck, a few extra bucks a week isn't making a big difference." Commuters trying to adapt At a Chevron station along Highway 530 at Interstate 5 near Arlington, Snohomish County, gas prices brought an instant response from customers, along with worries about what to do. "It's horrible," said Judy Espedal, who lives in the Silvana area and commutes to a job as a nurse in Everett. "It used to be $25 to fill it up and here I'm over $30," she said as she put regular-grade fuel at $2.139 a gallon into her 1999 Chevy Blazer. "I didn't even want to stop here, but I'm on empty," she said, the nozzle finally clicking off at $31.30 for 14.63 gallons.
"A little car wouldn't do it," she said. While some people are not yet selling their big trucks or changing jobs, some drivers are skipping other things. "We're not going to drive to Alaska," said Jo Jeffrey, who with her husband, Bo Miller, was switching cars at a Stanwood park-and-ride-lot for a trip to Bellevue. Jeffrey and Miller live in La Conner, Skagit County, but work in different locations and often meet at the park-and-ride, leaving one car there. That's just common sense, they said, to avoid taking two cars. But one major change they've made concerns a 4,000-mile trip to Alaska over the summer in their Ford F-250 pickup, with camper. They took the 11-mile-a-gallon vehicle on a late-spring ski trip to Montana, then got their gas bill: "It was kind of an 'Oops,' " Miller said. They've discovered it's cheaper to fly to Alaska, so they're leaving the truck and camper home over the summer. A helping hand Salvation Army's Cecille Bowman doesn't need to watch the news to know gas prices are skyrocketing. Her client lists say plenty.
The Salvation Army traditionally doesn't provide assistance with gas, but administrators in the Greenwood office decided to help North Seattle residents when they were inundated with pleas for gas money. This gas-price hike, said Bowman, "is really affecting folks. Our income does not go up just because gas prices go up. Poor people and seniors on fixed income ... have no option except to sacrifice something else." About 20 needy folks have received gas vouchers of $10 or more and 20 to 24 others are on the waiting list for bus tokens, administrators said. Bowman takes each request on a case-by-case basis. No eligibility guidelines have been set other than the needy must reside in North Seattle. Most gas-voucher recipients so far have been people who needed to drive to job interviews or were between paychecks and needed to drive to work. Bowman also plans to buy 900 bus tickets, but at the rate gas prices are going, she doesn't expect them to last long. "If they can barely afford gas at $2 (per gallon)," she said, "they are not going to be able to afford gas at $3."
Copyright © 2004 The Seattle Times Company
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