Survey: Service Companies Raising Prices

Press Release

Now that paying $3 or more per gallon for gasoline has become commonplace, consumers are making tough choices about where to make cuts in their budget to accommodate transportation needs. Service companies are struggling too, caught by questions of whether to eat the rising fuel costs, pass them along to their customers or invest in energy saving methods to actually cut costs.

According to an exclusive, Angie’s List poll of service companies in major markets across the country:
· 83 percent have seen an increase in the prices of their supplies
· 52 percent have made changes to become more gas efficient.
· 91 percent have already raised prices or are thinking about raising prices to cover the gas spike.

Transportation isn’t the only steadily rising expense some companies are facing. Roofers and asphalt paving contractors are getting hit a second time because the products they sell are petroleum based. The price of aluminum products and lumber has also increased. For consumers, this means higher delivery and products costs, as well.

Larger operations may have room in their budgets to account for the increased expenses, but the price spike can be crippling for smaller ones. And while a few extra bucks for a pizza or flower delivery seem reasonable, consumers might not be expecting to feel the pinch in other areas.

“We’ve talked with handymen and plumbers, electricians and appliance repairmen, and they’re all struggling with how to deal with the rising cost of gas,” says Angie Hicks, founder of the consumer group Angie’s List. “Some of them are trying to ride it out in hopes that gas prices will go back down, but others have to make the tough decision to increase their prices or add additional fees.”

Hicks points out that many service companies are trying creative ways to help reduce the strain. An electrician in Indianapolis, Indiana, bought a motorcycle to drive to service calls to save gas money. In Columbus, Ohio, a heating and air conditioning company switched to diesel vans to cut costs.

An electrician in Philadelphia plans trips so homes are grouped together by location to cut down on mileage. In Charlotte, a home repairs & improvement company also try to group jobs in the same area. Currently, they don’t have a travel charge, but are in the process of increasing rates to deal with gas prices.

A Seattle plumbing company told us they now have a travel fee. Their cost went up $2.50 for jobs within the area and $5.00 more outside the area. An appliance company in Los Angeles now charges $10 more to cover fuel expenses and plumbers in Chicago say they have added a truck charge of $5.00 to cover costs.

Hicks says many contractors struggle with the question of raising rates to cover gas expenses. “They’re hesitant to raise their prices because their customers are also struggling. A few more dollars added to the price may be more than some customers are willing to pay for the service,” she said.

As fuel surcharges, trip fees and other price increases continue to hit consumers, Angie offers a few piece of advice:

Comparison shop, if you are getting ready to hire a new service to be sure you’re getting the best price.

Ask contractors to itemize any charges/surcharges related to fuel costs so you know exactly what you are paying for.

If a contractor charges a trip fee or for an estimate, find out if that cost will be taken off your final bill if you choose him/her for the job.

Be flexible and willing to coordinate. If your contractor - lawn service, dog walker, errand service, housekeeper, tutor, etc. - has more than one customer in your neighborhood, see if you can coordinate with those other customers. This can cut down on your contractor’s fuel costs, and keep him/her from passing them on to you.

Prioritize your own expenses. Even if a contractor increases his/her costs, it could be that it’s a service you need. As you are looking to find room in your own budget, don’t cut out an essential service now, only to end up paying more for it later.
*90 Service companies rated on Angie’s List were polled in these cities; Boston, Charlotte, Chicago, Columbus, Dallas, Indianapolis, Los Angeles, Philadelphia, and Seattle.

Source: Angie's List