Fuel costs squeeze local businesses, forcing tough choices on prices and profits
CHICAGO (WLS) -- Higher fuel prices are increasing costs for businesses that rely on trucks, equipment and long hours on the road, with some owners absorbing the expenses and others passing them on to customers.
At Rooney Landscape on Chicago's Northwest Side, fuel is a major operating expense.
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"All of our mowers, all of our blowers, trimmers, chainsaws," owner Dave Rooney said.
In addition to landscaping equipment, the company operates 12 diesel-powered trucks. Rooney said his business has spent 38% more on fuel so far this year than during the same period last year.
The challenge, Rooney said, is that much of the company's work was priced months before fuel costs increased.
"Our maintenance jobs are sold in February. Our contracts go out in February, so our pricing is put together in January. So, everything that was sent out, we have to, you know, we can't raise prices," Rooney said.
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As a result, Rooney said the company is largely absorbing the higher fuel costs now and adjusting future pricing accordingly.
Not every business can do that.
"I had to raise the price for my customers," said Younes Essaber, a professional driver who owns a chauffeur business.
Essaber said rising fuel costs have dramatically increased his expenses.
"I used to put $60 every two days, now I put 100 to 120. It depends. If you drive in the city, you burn more gas," he said.
To offset those costs, Essaber said his flat rate into the city has increased from $80 to $100. He said he typically works seven days a week, often 12 hours a day.
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"Whenever I have customers, I'm working. Sometimes I don't have time for my family and stuff, like, take my kids to a soccer game or something. Sometimes, it's hard," Essaber said.
Other drivers said higher fuel costs have pushed some people out of the industry.
"If the gas is becoming double and triple what we're used to, that's money out of your pocket. And I personally know drivers that step back, they're doing something else now," professional driver Mohammad Hussein said.
Rooney said fuel costs eventually affect far more than the businesses paying at the pump.
"Everything gets delivered by a truck, so everybody's feeling it one way or another," Rooney said. "When we can plan for it, it's one thing, or when we have a hunch it's going to go up, but I had no idea we were going to see this type of increase."
Whether businesses absorb the expense or pass it along to customers, owners say the effects of higher fuel prices can extend well beyond the gas station and may reach consumers days, weeks or even months later.
