When Broadway Pizzeria opened in 1996, it delivered for free, recalls owner Mario Perdichizzi. “Those days are over,” he laughs.
After charging a nominal fee in recent years—$1 to $3 for delivery up to seven miles from the pizza shop on Rancho Drive near UMC—Broadway recently upped that charge by a couple of bucks to help cover a jump in operating costs tied to the rising price of gas, Perdichizzi says.
“We’re doing the best we can. We want to do right by our customers,” he says, explaining that in addition to his own drivers’ gas costs rising, his distributors have significantly increased surcharges for ingredient dropoffs.
According to the American Automobile Association (AAA), at press time the average cost for a gallon of gas was $5.17 in Nevada—third-highest in the country (the national average was $4.18). Drivers across the U.S. are paying about 47% more on average for a tank of gas than they were just a year ago.
Some can weather the price increase, but some households with tight budgets and businesses with narrow margins are severely challenged.
Las Vegan Eric Johnson has logged more than 15,000 rides since he started as a ride-share and delivery driver for Lyft, Postmates and Uber Eats three years ago. When the pandemic hit and non-essential businesses were ordered to close to prevent the spread of COVID-19 in 2020, food delivery services became a quarantine mainstay.
“When COVID started and different strains came on, I thought I should probably just do food [to avoid] having all these people in the car,” Johnson recalls. When he found out how much of the sale these companies took—“30% to 38% of the sale,” he says—he took issue. “For the customers, there was no real fee. [The apps] said they’d just get it off the restaurant.”
Johnson says a friend had to close her restaurant because she couldn’t cover her costs with deliveries alone.
Johnson then found out about Loco, a mobile app owned by a co-op of local restaurants. It was launched to get around the cuts taken by the big delivery apps. “I wanted to help them just because of what happened to my friend,” Johnson says.
After his first day, which started with a Sunday delivery from Tacotarian, he was hooked. “I had about nine or 10 deliveries at restaurants just like that one, where [it felt like] everybody in the community was coming together,” he says. He’s been driving for the app since January and loves it.
But Johnson is starting to feel a “squeeze” when it comes to filling up his vehicle. He says his cost has jumped from about $50 to $70 to fill up his tank. To make up for the added expense, he’s been making more deliveries.
Tacotarian vegan restaurant co-owner Kristen Corral, whose restaurant participates in the Loco app, says restaurants have been successful in making sure drivers get at least $10 per delivery to help cover gas price hikes. They don’t want drivers to have to operate at a loss, she explains.
“I noticed tips have been a little bit higher. I think people have been tipping because they realize these drivers are spending a lot on gas money,” she says. “And we’ve raised our delivery fees a tad, and nobody’s complained about that. That also goes to the driver.”
Corral says she’s pleased Tacotarian has been able to work out an arrangement that helps the 15 drivers currently employed with Loco. That’s the whole point of the co-op structure, she explains—to have fairer relationships between businesses, delivery drivers and customers, compared to what the big apps offer.
Since Loco launched in June 2021, nearly 70 local restaurants have signed on. But if gas trends continue on an upward trajectory, the app could encounter roadblocks to expanding, Corral says. She says about 20 restaurants are ready to join, but more drivers are needed before they can do so—and Loco has struggled to hire new drivers.
Loco has been advertising for drivers on social media, loco
vegas.coop and Indeed. “Ideally, we’ll just keep growing, and it will never stop,” she says. “But we can’t scale if we don’t have enough reliable drivers.”
Since gas prices began skyrocketing, rideshare and large food delivery companies like Lyft, Uber and Instacart have announced temporary fuel surcharges to help drivers with expenses. Johnson, who also drives for Uber, says those cover about three-quarters of his $20 price jump.
Other small businesses, including florists, catering and landscaping companies, also are dealing with higher prices and trying to shift costs around to make it work. But those businesses could see relief soon.
According to the most recent report from AAA, gas prices have begun to decrease nationwide—from an average of $4.33 on March 11 to $4.18 on April 4.
In an attempt to reduce gas prices for consumers, President Joe Biden on March 31 announced that the U.S. will release an unprecedented 1 million gallons of oil per day from emergency reserves for up to 180 days. According to AAA, that move—in conjunction with increased global production and an unseasonal dip in consumer demand—seems to have helped drive the global oil price and consumer prices down in recent days.
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