Cost Analysis of Delivering Pizzas
May 30th, 2008 by Ana
By now, it’s old news to just about everyone but my 14-year-old son that gas prices are hitting record highs every day. According to AAA’s Fuel Gauge Report website, today is the 23rd new record gas price … in a row. I’ve been watching it, naturally. This morning over coffee I decided to do a “back of bill envelope” calculation to see if it is still worth delivering pizzas as my part-time job.
Gas Prices
The Pizza Taxi takes between 8 and 10 gallons to top off from just under a quarter of a tank. The last few tankfuls I have gotten the following fuel economy/gas mileage/MPG:
- 36.0 mpg
- 33.1 mpg
- 32.9 mpg
- 36.0 mpg
It looks like 33-36 mile per gallon is my upper limit on summer-blend regular unleaded gas for pizza delivery. I can live with that. It now takes $32-40 to fill that bad boy up, depending on how good I can get at the pump price comparison game, and with my Kroger Plus shopping card.
Tips
Overall, tips at work are slowly declining. There are some gems of customers who have upped their tipping to help us drivers out as they do see gas prices rising, but unfortuneately those gems of customers are few enough that all of us drivers have their addresses memorized. The trend I am noticing is that people who used to tip $3 to $3.50 per order are now tipping $1.75 to $2.50 per order. Some have slid down to the insulting range of $0 to $0.75 tip, and of course those customers always tell me “Have a nice night!” when they do it.
Gas Offset Pay and Minimum Wage
I’ve talked to the Boss Man (the owner) several times over the past two weeks, and he has laid out the economic realities for me: He cannot afford to increase our gas offset pay. He raised the delivery charge by a quarter, but says that is to absorb rising food costs for him. He is afraid to raise his menu prices because of new competition that opened up in the area over the winter, and dreads the upcoming increase in the federal minimum wage in July 24th. Federal minimum wage will jump up to $6.55 per hour which is a whopping 70 cents more an hour.
Maintenace and Upkeep on the Pizza Taxi
I’m due for another round of maintenace and upkeep. Oil change is due/was due about 250 miles ago … which is only about three days in delivery terms. Since the Pizza Taxi is over 93k miles, I may ask my mechanic about that special oil for high mileage engines, and see if they think it is worth the extra cost. It is also time for my annual brake check (and probably replacement). I’ve been putting that one off, which I know I shouldn’t do. I’m also debating the merits of a tune-up since I passed the 90k mark on the odometer. I’m looking at $200-500 dollars, depending on the brakes, possibly more if they’ve raised their prices.
Am I Still Making Money Delivering Pizzas?
Bottom line is: Yes, I am so I will continue doing it. The rising costs have taken a bite out of my money though, so it is not nearly as profitable as it was before the big spring run-up on gas prices. If I didn’t get as good of gas mileage as I do, it might not be worth it for me. I have a coworker who says he only gets about 19 mpg in his truck, and I honestly don’t see how he is making any money doing this.
Last summer, I had called 25 mpg the point where pizza delivery makes good money, and I think I need to revise that to something higher. Maybe 28 mpg now … but if gas prices continue their climb it may end up only cars that get better than 30 mpg will make money.
More posts about the economics and realities of delivering pizzas as a part-time job:
- Safety Tips from your Pizza Delivery Driver (may literally save a life)
- Gasoline Saving Driving Tips (non-delivery folks will find it useful as well)
- Tip Your Pizza Delivery Person! oh … and read the comments on this one!
- How Much Can I Make Delivering Pizzas? (from last summer)
- Pizza Delivery Expert (from waaay back, when I worked for Domino’s)
Happy reading!
Posted in vehicles, pizza delivery |
May 31st, 2008 at 7:39 am
Sounds like no fun there. Local pizza places are suffering because people don’t really tip that well around here (I’m guessing). The last pizza I ordered was 1 1/2 hrs late, and that was AFTER I called the store. The drivers didn’t show up that night and they were shorthanded.
First time it ever happened, and they gave me coupons for two free large pizzas, so I’m letting it slide,… this time.
May 31st, 2008 at 3:45 pm
I think Jonathan was analyzing this on My Money Blog the other day. He was talking about ways it might and might not be profitable and for whom. It’s quite smart that you’re doing all this continued analysis to make sure it’s still profitable. I hope it’ll stay profitable for a long time to come and they you and the pizza taxi will happily putter around earning snowflakes.
Mmmmm…pizza!
May 31st, 2008 at 9:09 pm
What’s wrong with regular part time jobs that would have roughly the same night time hours but pay a higher hourly rate $8-10hr. Or is there something you have against retail? Then you wouldn’t have to worry about gas prices and maintenance on your own vehicle. Is it worth the risk (impending doom) of a costly repair that could rack up to a few weeks worth of work?
June 1st, 2008 at 12:14 am
Angie, that would be a pay cut for me, even on a bad night.
June 2nd, 2008 at 7:21 pm
I don’t see how this is worth your time at all. In another post you said you earn about $40 a night. How many hours? I can make $45 writing 3- $15 articles online in 1-2 hours. I think with your blog and writing talents you’d be better off writing from home.
June 2nd, 2008 at 10:11 pm
Maria, the $40 per night is my tip average. I also get hourly plus per delivery gas offset. Usually that is 4-5 hours of working. The store just opened for lunch today, and I pulled 10.75 hours on the clock.
June 7th, 2008 at 11:47 am
It’s a tough call and I hope you can continue delivering. I can’t beleive that a barrel of oil hit $130 this week.
June 9th, 2008 at 9:44 am
On a positive note, I read an article predicting that the price of oil would drop this year or next. The evidence was pretty compelling.
Basically, his thesis is that new oil discoveries and production are increasing because it’s so profitable to be in oil right now. This increase in supply will push the price of oil down.
Which would be good news for pizza deliverers.
June 11th, 2008 at 3:46 pm
That was the best article I have read yet demonstrating how the rising price of gas is affecting people. This is a huge issue. My jeep’s lease is expiring this month. I can tell you right now that I am looking for a car that gives me better than 14 mpg.
June 13th, 2008 at 7:13 am
Don’t bother with high mileage oil for a car with only 93k miles on her. Once you put another 93k on the engine, *then* look into high mileage oil. Only getting closer to 200k miles will the engine need to be babied, unless it’s of the domestic variety. (Somewhat my personal opinion, but Japanese and European cars are built with more quality than “American” cars put together in Mexico. Don’t even get me started on Korean cars…)
My own little baby is almost to 100k miles, and she still gets normal Mobil 1 oil. I won’t insult her and call her “high mileage” until she hits 200k.
Now my husband’s old Civic with 200k miles… She was high mileage. (And would have run fine if he hadn’t tried to explode the engine. Not the car’s fault, his fault.)
June 13th, 2008 at 8:55 am
Foxie: It’s Ford, and I don’t say nice things where it might hear me! LOL My experiences with Fords is that you have to give them equal amounts of maintenance and cussing to keep them running right. The last time I said anything nice about the Pizza Taxi was in December, and the voltage regulator went out within a few days.
June 14th, 2008 at 8:15 pm
Interesting I would have never thought about this. I tipped the pizza guy $5.05 because of this article.
Time to buy a Geo Metro.
June 15th, 2008 at 7:42 pm
“Time to buy a Geo Metro”
That’s even a step down from a Ford.
Yeah, I’m just not fond of Ford… Good ‘ole engineering at work there, ya? I do like some of their cars, just nothing sold in the states! (I’m still waiting for someone to explain to me why the American car company sells it’s BEST cars everywhere EXCEPT America…) Sounds like it requires tough love, not my kind of car relationship. I love to baby and spoil my girls to death. 
(No kids for me, I’ve got my cars!)
If the car runs fine with normal oil though, stick with it. If you try out the other oil and the engine responds to it better, then it may be worth the extra money. It’s best to let the car decide what she likes and keep using that, at least that’s what I think. (The car knows better than the mechanic what the car wants, definitely sounds like yours has a mind of its own.)
June 15th, 2008 at 9:52 pm
Jeff, no Metro for me, as I had a Geo Metro a few years back that had more “quirks” than all my Fords put together. Somehow I doubt Chevy improved the model much after it bought out Geo.
But glad to hear I helped out some driver in tips
You will get your pizzas delivered before the non-tippers now!
June 17th, 2008 at 5:17 pm
Okay, that makes more sense, Ana. It still seems like your blogging skills could deliver higher earnings than pizza delivery, but I can understand the attraction of immediate earnings for the debt snowball.
June 23rd, 2008 at 2:45 pm
from the looks of things (rising gas prices), it seems like making money from pizza delivery isn’t going to be a good idea anymore, that is unless you are going to use a scooter or a bicycle…
June 27th, 2008 at 4:52 pm
That’s awful that some people just say “have a nice day” or only tip a dollar. Don’t they realize that even though they’re broke, the LAST person they should be screwing over is someone else like themselves who’s working hard to pay the bills? I believe in being cheap in other areas and you should NEVER be a cheap tipper. If you can’t afford the tip, don’t buy it in the first place.
June 27th, 2008 at 6:33 pm
[…] rocks - and she’s still delivering pizzas for mad cash, even though gas prices have gone up, up, up. I’ll take a thin crust w/ pepperoni, […]
July 4th, 2008 at 9:22 pm
I NEVER get my pizza later than 25-35 minutes average. I give between 5-6$ for a tip. Why? I want my pizza, I want it still hot, I want it made right. You get what you pay for. And they do have my address memorized because once I only had two bucks on me for a tip and so I went down the next day to leave a five for the guy because I felt bad, they knew who I was and they knew who delivered my pizza and they knew my phone and address by heart. Come on these people have kids or are in school and have the same crappy bills we’ve all got and some one is going to tip them 75 cents? If you don’t have the tip, go get it yourself!
July 26th, 2008 at 8:46 am
[…] Cost Analysis of Delivering Pizzas […]
August 8th, 2008 at 9:00 am
You have to tip. Delivery is a premium service, not something we should expect for free.