Tuesday, October 21, 2008

Delivery fees a piece of the pie

At Rialto Pizza in Greenfield, a 16-inch large pizza costs $10.99 plus tax if you pick it up. The same pizza is $12.67 plus tax delivered.

The more expensive pie doesn't come with a can of soda, extra cheese or sausage, but it does come with a 10 percent delivery surcharge.

"I would absolutely drop the surcharge if gas went (down), but I can't right now," owner Bruce Famili said.


Like Rialto Pizza, many local businesses that passed the buck of rising fuel costs onto customers have no intention of dropping their surcharges despite declining prices at the pump.

Famili added the delivery fee when gasoline hit $1.99 a gallon in summer 2005. He said he can't afford to drop the surcharge because his food suppliers pass surcharges onto him.

"Everything we buy is very expensive now," said Alei Bueak, manager of Parma Pizza in Shadyside, which implemented a 50-cent delivery fee instead of raising menu prices. Bueak didn't recall when the restaurant implemented the surcharge.

The cost of a gallon of gasoline in Western Pennsylvania has dropped 72 cents during the past month and $1.10 since June, according to AAA.

Consumers need to be aware of surcharges because retailers don't always talk about them, said Audrey Guskey, professor of marketing at Duquesne University.

"There are surcharges on things you don't even think about," from pest control to furniture movers, Guskey said. "It seems like it's everywhere, and it's hitting consumers where it hurts -- their wallets."

At Wai-Wai Chinese Cuisine in Bloomfield, a $1 delivery surcharge is tied directly to high gas prices, manager Christopher Mettick said.

"If gas came down under $3, and we knew it was going to permanently stay down, we'd think about getting rid of it," he said. "But the surcharge goes toward gasoline for delivery drivers. Otherwise, they wouldn't make any money."

Many businesses employ a scale that increases or decreases with the price of gas.

Nationally, UPS lowered its fuel surcharges earlier this month from 10.5 percent to 9.25 percent for ground shipping and from 34.5 percent to 27 percent for air and international shipping. FedEx matched UPS' surcharges, while DHL's are slightly higher at 9.3 percent for ground and 29 percent for air and international shipping.

North Side-based Yellow Cab Co. developed a scale in 2004 "when gas prices started to get a little crazy," said Jerry Campolongo, general manager. The surcharge is $1.15 per ride, down from more than $2 when gas prices hit a record high this summer, he said.

"Every time gas prices go up or down, (the surcharges) adjust accordingly," Campolongo said. "We bring all 300 of the cabs in and place a sticker in the window that lets the public know."

Pitt-Ohio Express, a trucking company based in the Strip District, charges a percentage of freight costs as part of a fuel surcharge that changes weekly with the price of diesel, said CEO Chuck Hammel. Hammel didn't know what his company's current surcharge was. The company implemented the surcharge about five years ago, he said.

Fox's Pizza Den, which has franchised locations in 31 states, including more than 120 outlets in Pennsylvania, has not mandated a delivery surcharge, but most stores have one, said Ken Crosby, director of operations at the Murrysville-based company.

"I don't think (a surcharge) will ever go away 100 percent," he said. "With the price of insurance and gas, deliveries in general are just too expensive."

Guskey said many retailers won't drop the surcharge now that customers are used to paying it.

"I would find it very unusual for them to get rid of it or cut it," she said. "It's pretty much set in stone."



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