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High gas prices are hurting small businesses that need bigger vehicles: NPR

High pump prices are hurting small businesses such as landscapers, plumbers and carpet cleaners, who rely heavily on gas guzzling vehicles to serve their customers.



AILSA Chang, Host:

As President Biden makes plans for a gasoline tax holiday, small business owners and self-employed people are hurting. Many drive gas-guzzling trucks or vans and have little choice but to pay. From Chicago, reports NPR’s David Schaper.

David Schaper, Baillin: It’s one of the surest words of summer …

(Soundbite by Lawnmower)

Schaper: … a landscaper shoots his lawn mower to cut grass in the yards to the northwest of Chicago. Antonio Urrianna Arturo leads this three-person crew for landscaping and I ask how much they spend on gas.

Antonio Urianna: One hundred.

Schaper: One hundred dollars a day?

Urianna: Yes.

Schaper: For what? What are you filling, truck?

URRIANNA: For trucks and machines.

Scraper: Truck and …

Urianna: The machine.

Scapper: The machines are three large mowers, an edger and a leaf blower. Oriana shows me the gas station receipts on the seat of her truck, which is moving in Diesel.

Urianna: Diesel – six.

Scraper: Is it over $ 6?

Urianna: Yes.

Scapper: Landscapers usually set their prices in the winter before the mowing season begins or in the fall for gas prices before they rise. And raising prices now is tricky, because they can lose customers. And they are not the only ones struggling to make ends meet.

Kalina Mark: Do you have a question, madam? What can I get for you?

Schaper: At this farmer’s market, downtown Chicago, Mark Family Farm Market’s Kalina Mark helps the last couple of customers, but her husband, John, packs unsold tents, tables and produce back into the family farm. La Porte, Ind., About 65 miles.

Mark: And you can’t bring a little freebie car, so you have to bring a truck. You have to pull the trailer. On average, when we pull the trailer we bring today to market our product, the pickup truck gets about 10 miles per gallon.

Schaper: At about 5.25 gallons, Mark says that doing twice-weekly 130-mile round trips to farmers markets in Chicago really adds to all the other fuel costs on the farm.

Mark: Between fuel for tractors, fuel for work trucks, and then the usual fuel we spend on a regular basis to get here and there, we probably get about $ 500 a week.

Schaper: So Marx says they need to sell their flowers, tomatoes, asparagus and strawberries just to cover that cost – and to this day, they don’t.

Mark: It is very difficult to get out and you have come this way and you have brought a bunch and then you have to pack it all back home. That’s the hard part. Right now, we are more negative than positive in books. Let’s do that.

Michael Alter: They’re squeezing on every aspect you can think of.

Schaper: Michael Alter is Professor of Entrepreneurship at the Booth School of Business at the University of Chicago. And contractors, plumbers, electricians, cleaning services, exterminators, or small businesses that need to run for their customers, they all take a hit.

ALTER: And what’s happening is that the cost to do the same service is increasing physically because their fuel prices are so high. And it just hurts profits and hurts the flow of money when they are struggling.

Schaper: And Alter says most of those who are self-employed or run small businesses don’t have much cushion.

ALTER: So you’ve got people who don’t have much reserve to manage through these high prices and low profits, and the cash flow hit is going to happen to a lot of them. So I expect there will be some business that unfortunately does not.

Scapper: Alter advises small businesses not to shy away from raising prices or adding additional fees because most consumers now understand the need and expect it. But she adds that financial uncertainty is now making it very difficult for small businesses to plan for next year, next month and in some cases tomorrow. David Shaper, NPR News, Chicago.

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