1. Missed the live Ask the Expert event?
    Not to worry. Check out the archived thread of the Q&A with Ken Hutcheson, President of U.S. Lawns, and the LawnSite community in the Franchising forum .

    Dismiss Notice

why gas price surcharges

Discussion in 'Lawn Mowing' started by MacLawnCo, Mar 4, 2003.

  1. MacLawnCo

    MacLawnCo LawnSite Bronze Member
    Posts: 1,847

    Guys, i have heard in the past that some are calling in their gas price surcharge on their contracts. I understand that it may be nesecarry, but i question the extent that we should raise our rates.

    Some guys say they are asking for up to $5 per lawn increase. I am assuming that is across the board...for resi's and all. For referance, i aveage about 1 gal of fuel per man hour. If you do a lawn that takes .5 man hours, and gas increases $.3 per gal above your budget, then you should only be asking for an aditional $.15. If you all round like i do, then you can ask for $.5 or $.75 and noone will question you. I think asking for uwards of a few dollars per lawn is asking to get fired. Anyone agree?
  2. Rob T

    Rob T LawnSite Member
    Posts: 165

    I agree. I had been thinking of adding a fuel surcharge onto invoices this year. I think it would make more sense to just raise rates a dollar per cut. In the end I continue to get the extra dollar per cut after gas prices go back down. Besides, I HATE when my suppliers, ins co.'s, etc. add these little charges to my bill.

    I do not like to be "nickel and dimmed to death" and i'm sure my customers won't like it either.
  3. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    I agree...5 bucks on a $35 lawn is a 15% increase (even if it's only temporary).

    Then again, you also have to take into account gas/diesel that is going into your vehicle too. It isn't just the mower where you have the increased expense.
  4. Organix

    Organix LawnSite Member
    Posts: 113

    LOL I don't understand how you guys back East charge what you do as it is. hehe. We bill and work 12 months here. We get paid even if it rains, but try to work people in. You can't always mow, but there is always leafs or something. So we bill by the month whether it's 4 or 5 cuts, it all comes out the same at the end of year. I just added 5 bucks a month to each customer. Everyone seems to be completely fine with it. That more than makes up the 50 bucks a month more I have been paying in fuel.

    I would try to figure out how much more you paying in fuel and divide it across your customer base. But you may want to raise some more than others if they are pain or paying too little now and not the raise one's that are pretty well maxed out.
  5. cajuncutter

    cajuncutter LawnSite Senior Member
    Posts: 626

    It is not just how much fuel one uses you also have to consider other costs. It is simple economics. Energy costs rise and so do product costs. Don't forget the big rigs that haul in your fruits and veggies not to mention your parts and accessories for your lawn equipment etc. Also natural gas that is used in the processing of fertalizers and heating of green houses for your plants. When the cost of fuel goes up everything else follows. I am currently tacking on a teporary surcharge on my 12 month customers and on selected pay by the cut accounts I have gone up not only for the fuel cost but they are priced for the mid 90's and I have never gone up on them. As they are saying what goes up must come down, this could all be temporary then again it might not.
  6. Mike Bradbury

    Mike Bradbury LawnSite Senior Member
    Posts: 493

    has been charging a fuel surcharge for at least the past TWO years without a pause.
    Fuggin bastages

    UTM-PIKE LawnSite Member
    Posts: 65

    I agree, but, what about that lawn that you underbidded by $5 in the first place, or, the customer has been a hassle, wanting every little thing for free. Wouldnt this be the way out of losing money on a certain property. I have a couple myself who are always like, could you trim this one bush while your here, or could you trim this tree while you are on the way to dump your trailer? Some of you guys would have no problem adding to their bill right then and their, and I should too, but there are those that I always give into.

    Then again, on some of my loyal customers that pay me in advance and treat me well, I use the gas prices to make myself look good. They already know alot of people in my area are charging extra, I tell them that I am not and that I am staying the same and appreciate their business despite the economy. In both cases, you win whether you charge a little extra or not. Thats my opinion, and Im sure someone has a different take on it.

    UTM-PIKE LawnSite Member
    Posts: 65

    Sorry guys, Ive had a few tonight and think I hit the wrong button, new thread instead of reply, but this is for the post about raising gas prices to stay with the economy. I didnt think I was drunk yet.
  9. 1MajorTom

    1MajorTom Senior Moderator
    Posts: 6,074


    I merged your post into this thread, the one you had intended it for. I was just going to merge your post, delete your second reply, and then let you sit there and wonder how your post magically got in the right place. ;)
    But I decided against it, because you might have really thought you had a few too many. :D
  10. xpnd

    xpnd LawnSite Senior Member
    Posts: 378

    If I determine I have underbid a yard by that much after the crew has gone through the learning curve, I submit my two week notice of termination of services with a revised price on a new service agreement. In this business 90% of your losses will be incurred from 10% of your customers and other jobs should not subsidize underbid jobs. But to the post, I have included a sliding % surcharge depending on the price of fuel. The surcharge is a temp up pricing so the profit margin does not such a hard beating. If next year fuel prices stablize at $1.75 or higher then there will be an overall price increase to account for increased costs and the surchagre rates will change.

Share This Page