Cost Analysis of Delivering PizzasFriday, May 30th, 2008
By now, it’s old news to just about everyone but my 14-year-old son that gas prices are hitting record highs every day. According to AAA’s Fuel Gauge Report website, today is the 23rd new record gas price … in a row. I’ve been watching it, naturally. This morning over coffee I decided to do a “back of bill envelope” calculation to see if it is still worth delivering pizzas as my part-time job.
The Pizza Taxi takes between 8 and 10 gallons to top off from just under a quarter of a tank. The last few tankfuls I have gotten the following fuel economy/gas mileage/MPG:
- 36.0 mpg
- 33.1 mpg
- 32.9 mpg
- 36.0 mpg
It looks like 33-36 mile per gallon is my upper limit on summer-blend regular unleaded gas for pizza delivery. I can live with that. It now takes $32-40 to fill that bad boy up, depending on how good I can get at the pump price comparison game, and with my Kroger Plus shopping card.
Overall, tips at work are slowly declining. There are some gems of customers who have upped their tipping to help us drivers out as they do see gas prices rising, but unfortuneately those gems of customers are few enough that all of us drivers have their addresses memorized. The trend I am noticing is that people who used to tip $3 to $3.50 per order are now tipping $1.75 to $2.50 per order. Some have slid down to the insulting range of $0 to $0.75 tip, and of course those customers always tell me “Have a nice night!” when they do it.
Gas Offset Pay and Minimum Wage
I’ve talked to the Boss Man (the owner) several times over the past two weeks, and he has laid out the economic realities for me: He cannot afford to increase our gas offset pay. He raised the delivery charge by a quarter, but says that is to absorb rising food costs for him. He is afraid to raise his menu prices because of new competition that opened up in the area over the winter, and dreads the upcoming increase in the federal minimum wage in July 24th. Federal minimum wage will jump up to $6.55 per hour which is a whopping 70 cents more an hour.
Maintenace and Upkeep on the Pizza Taxi
I’m due for another round of maintenace and upkeep. Oil change is due/was due about 250 miles ago … which is only about three days in delivery terms. Since the Pizza Taxi is over 93k miles, I may ask my mechanic about that special oil for high mileage engines, and see if they think it is worth the extra cost. It is also time for my annual brake check (and probably replacement). I’ve been putting that one off, which I know I shouldn’t do. I’m also debating the merits of a tune-up since I passed the 90k mark on the odometer. I’m looking at $200-500 dollars, depending on the brakes, possibly more if they’ve raised their prices.
Am I Still Making Money Delivering Pizzas?
Bottom line is: Yes, I am so I will continue doing it. The rising costs have taken a bite out of my money though, so it is not nearly as profitable as it was before the big spring run-up on gas prices. If I didn’t get as good of gas mileage as I do, it might not be worth it for me. I have a coworker who says he only gets about 19 mpg in his truck, and I honestly don’t see how he is making any money doing this.
Last summer, I had called 25 mpg the point where pizza delivery makes good money, and I think I need to revise that to something higher. Maybe 28 mpg now … but if gas prices continue their climb it may end up only cars that get better than 30 mpg will make money.
More posts about the economics and realities of delivering pizzas as a part-time job:
- Safety Tips from your Pizza Delivery Driver (may literally save a life)
- Gasoline Saving Driving Tips (non-delivery folks will find it useful as well)
- Tip Your Pizza Delivery Person! oh … and read the comments on this one!
- How Much Can I Make Delivering Pizzas? (from last summer)
- Pizza Delivery Expert (from waaay back, when I worked for Domino’s)