Workplace

Low gas prices great for everyone, especially for people who drive for a living

“Whenever you get that break on the price of gas, it just feels really good,” said Patty Bodling, a physical therapist who makes home visits.
“Whenever you get that break on the price of gas, it just feels really good,” said Patty Bodling, a physical therapist who makes home visits. The Kansas City Star

They’re not getting rich working out of their cars. But with gasoline prices plunging, the road to making a living is a lot less bumpy.

For pizza delivery drivers, cabbies and anyone else fueling up their personal vehicles every few days, pump prices below $2 per gallon can mean weekly savings of $20, $50 or even $150 from what they had to pay last year.

The benefit is as much psychological as it is economic.

“Whenever you get that break on the price of gas, it just feels really good,” said Patty Bodling. She has gone through seven cars in her 33 years making home visits for the Visiting Nurse Association of Kansas City.

Visiting health care workers and pizza delivery drivers aren’t the only ones enjoying the plummet in oil prices, which are down by half since June, driving fuel prices to lows not seen since 2009.

Every driver — even if they’re only using cars to commute to work or run to the grocery store — should be noticing.

For the average U.S. household with two vehicles, gasoline expenses last week were about $25 lower than what was spent in a week this past summer.

Businesses are getting a boost, too, from truckers to plumbers.

Sure, it’s a temporary windfall and true, it hasn’t yet much affected costs for airline tickets, groceries or package deliveries.

But don’t tell the delivery crew at Waldo Pizza off Wornall Road that these gasoline prices — last week about $1.80 per gallon — are some mere fluke.

For the moment it means real growth in delivery captain Ryan Papke’s checking account. Nothing astounding, maybe $100 a month, but enough to make him feel better about pursuing a loan on a second car that doesn’t smell like pepperoni inside.

“Right now we’re winning in an occupation where we sometimes feel like we’re losing,” said Papke, 33.

The smart drivers, he said, don’t blow the extra cash in their pockets at Waldo area nightclubs, as some younger ones do. Rather, the smart ones invest while they can in vehicle repairs, save for a down payment on another car, or whittle down debts that come with working behind the wheel.

“I love my job … but it absolutely destroys a car’s parts,” Papke said. “I’ll tear through 30,000-mile brakes in 15,000. Oil changes, maintenance, tires are an ongoing expense.”

For hundreds of area Yellow Cab and 10/10 Taxi drivers, who pay for their own gas, the weekly fuel savings can exceed $150 from what they were spending a few months ago, said Bill George of the Kansas City Transportation Group.

“They’re all in a good mood, like nirvana,” George said. “The drivers bore the brunt of high prices last year. And they’re now getting 100 percent of the benefit of lower prices.”

Angel Lopez is among them.

Driving his own Crown Victoria for Yellow Cab, Lopez, of Merriam, calculates his fuel savings at about $70 per week.

“We need to enjoy it while it’s here,” he said.

“After being ripped off for so many years by these oil companies making billions in profits, I think we really deserve this,” Lopez said. “It’s like a relief program.”

With more cash in his pocket over the holidays, Lopez chose to take off some hours here and there. Other drivers are doing the opposite, making the most of cheap gas by spending more time on the road.

Xavier DeJesus, a driver for the ride-hailing service UberX, last week filled up his Kia Sorento for $27, half what he paid when he signed up for UberX in June.

“I’m gassing up more often and getting out,” DeJesus said. Because the cost of filling a tank is less, “you need only two rides to start making a profit. Sometimes you only need one ride. It’s worth it to get out there.”

Rather than saving $50 a week, he’s putting much of that money into more fuel so he can boost his income.

About 120 traveling health care staffers with the Visiting Nurse Association log a total of 1.5 million miles a year across a 17-county region in their own vehicles. They’re reimbursed 56 cents a mile whether gasoline prices are high or low.

When the prices are low, a little box of spending cash in physical therapist Bodling’s home fills up with 10s and 20s.

“You literally see that box of money grow,” said Bodling, who drives her Toyota Avalon to the homes of five patients each workday.

“I don’t put on nearly as many miles as some nurses, but I’m noticing a big difference,” she said. There’s maybe $30 more left in the box each week after she buys groceries.

Waldo Pizza deliveryman Jon Paul notices the same with the tea bag tin that holds his spare cash.

On top of the restaurant drivers’ base salary and tips, they collect delivery fees based on the distances they travel. For every delivery close to the restaurant, Zone 1, their paychecks go up $1 to cover mileage and their cars’ wear and tear.

In zones farther out, they collect another 50 cents or more.

The delivery fees are calibrated to match the federal tax deduction of roughly 56 cents per mile for work-related travel, said Waldo Pizza owner Phil Bourne: “If they drive 100 miles, hopefully they’re getting $56 from delivery fees.”

When gas prices hit $3.50 a gallon, some drivers complained that the reimbursement wasn’t covering costs. Sometimes they would need a $10 loan from Bourne at the start of the day to fuel up their cars and pay it back at shift’s end with the tips they collected.

Nobody is complaining now.

And that includes longtime driver Paul, who likened his job to playing poker.

“Some weeks you win a little, some you lose a little,” he said. “When you’re winning, you want to stockpile as much as you can.”

Businesses, too

Businesses also are getting a boost.

One of them is Anthony Plumbing, Heating and Cooling in Lenexa. The company didn’t have a customer surcharge for fuel when prices were climbing, instead paying for the cost out of the service charge.

“It (lower fuel prices) certainly helps us be more profitable,” said Steve Burbridge, president of the company. “I think it’s a hugely positive thing.”

Kansas City’s below-$2 prices are even a cut from the national average, which was $2.17 a gallon Friday, just over $1 less than a year ago. Gas prices peaked at $3.64 in June.

And it’s not just the lower cost of fueling up. Consumer optimism and a willingness to spend more money also are helping. The University of Michigan’s monthly consumer sentiment index in December was the highest since 2007, and lower gas prices were singled out as a major reason for the optimism.

“More people were commenting about lower gas prices,” said Edward Ellcey, a research analyst at the university’s Survey Research Center.

Lee Klass, a long-haul independent trucker, thinks the rising confidence is paying dividends. He’s moving more goods, which is increasing his income while he still saves money on fuel for his truck.

The American Trucking Association in its latest monthly freight index in November said tonnage hauled by fleets was up more than 4 percent.

“This is an industry that depends on the prosperity of others.” Klass said.

The price of diesel fuel hasn’t dropped as sharply as that for gasoline.

But it has dropped enough for Mid Central Contractors to pocket about $3,000 a week from what it was spending a few months back to fuel its fleet of five dozen trucks, said transportation manager Bob Lodestein.

His firm, as well as trucking companies and drivers who own their rigs, will happily take the savings. But many would prefer stability over the wild price swings of recent years, Lodestein said.

“The way it is, you don’t know what the prices are going to be in six months,” he said.

That makes it difficult for companies such as Mid Central, based in Pittsburg, Kan., to set rates on its customers from year to year.

“Stability would be awesome.”

Charges on bills

Fuel surcharges also are starting to come down, although not always as quickly.

UPS has a monthly surcharge that lags the price of diesel, the fuel it uses, by two months. The fuel’s prices are provided by the federal Energy Information Administration, and the company posts on its website how it determines the charge.

“We make it very transparent to our customers,” said Susan Rosenberg, a spokeswoman for UPS.

Consumers who ship, for example, a 20-pound box from Kansas City to Los Angeles using UPS Ground that costs $30 will save about 46 cents.

Airlines so far aren’t even that generous. Airfares continue to rise even though jet fuel prices are down 40 percent. Airlines say a lot of that is due to fuel prices being locked in.

But that will change this year. Delta said it could save $1.5 billion in fuel costs and the International Air Transport Association said cheaper fuel will help push airline net profits from $20 billion to $25 billion.

The trade group predicts fares this year will drop 5.1 percent.

“It’s a highly competitive industry, and consumers — travelers as well as shippers — will see lower costs in 2015 as the impact of lower oil prices kick in,” said Tony Tyler, the group’s chief executive officer.

Others aren’t so sure. Airlines for the last few years have been shedding surplus seat capacity, and planes now average 85 percent full, which will continue to help keep fares up.

‘‘I don’t see any windfall for consumers,” said George Hobica, founder of Airfare Watchdog. at airfarewatchdog.com.

Airlines may use some of the savings to pay for higher labor costs and improve air travel, which has lost much of its luster.

“I hope they don’t just bank the money,” he said. “Who knows, maybe they will bring back free food.”

In the big picture, the decline in oil prices — down by half since June — is beginning to pinch energy states like Texas and North Dakota, but overall it’s a boost for the nation’s economy, with more money available for other things besides fuel.

Cheaper fuel prices could add up to $219 billion, or roughly 1 percent to the country’s $17 trillion economy, said Stephen Brown, a former economist with the Federal Reserve Bank in Dallas.

That’s not a huge effect, but it’s enough to get attention, said Brown, now a professor of economics at the University of Nevada.

“It’s a pretty nice number.”

To reach Rick Montgomery, call 816-234-4410 or send email to rmontgomery@kcstar.com.

To reach Steve Everly, call 816-234-4455 or send email to severly@kcstar.com.

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