The Limos.com Forum Has Moved!!!

quote:

Originally posted by TxLimoGuy:
Shad,

I think you might want to think about another way to analyze your own internal situation. Going back 18 months, have your rates changed at all? If not, the increase in fuel has most certianly been chipping away at your profit margins since then as fuel prices have gone up 50-60% in that time frame and your rates have stayed the same.

Trying to determine if you should add a fuel surcharge based on percentage of fuel costs in your overall operating costs may seem like a good way to measure it, but I would think that it could be mis-leading since the percentage of any one item in a total is also affected by every other item in that total. ie. if insurance goes up more than fuel it could make the percentage of fuel in operating costs actually decrease even though you are paying more for fuel than 18 months ago.

Across the board fuel surcharges have been very common in the industry. I think something like 60% of operators have them in place. It is a bit nerve-wracking to pull that trigger, but we did it late last year and have had no complaints.

Getting back on topic of this post, the next step is to figure out how to let the surcharge adjust to market fluctuations. I was simply wondering if anyone else out there has thought about using more advanced systems such as a sliding scale adjusted on a weekly or monthly basis. I am probably going to give it a shot.