2/13/2015 Baltimore Business Journal
Lower gas prices have brought some alleviation to the Owings Mills shop and other local businesses that rely on delivery services. For Flowers & Fancies, it's been a temporary boon to the shop's bottom line. And for services like OrderUp, low gas prices have given more drivers reason to get in on the delivery action.
Nearly all of the arrangements Flowers & Fancies prepares — about 95 percent of them — are delivered by the florist. In the long term, Wingrat said he doesn't expect the drop in gas prices to have a dramatic impact on his business.
"The bottom line really is it's provided us with temporary relief," Wingrat said. "All it's really doing is making up or the added expense that we were up against and endured for the past four years."
Gas prices in the Baltimore area averaged $2.19 per gallon on Feb. 11. A year ago the Baltimore average was $3.33 per gallon, according to AAA.
For years, Flowers & Fancies was forced to eat the cost of rising gas prices.
"It was a shock to all of us, anyone that was driving, when prices went over $2, that was the first benchmark," Wingrat said. "And then when they went over $3."
Despite that increase, Flowers & Fancies has kept its delivery charges consistent since 2011. Same-day delivery runs $15.95. "We felt that we couldn't go any higher," Wingrat said.
It's slightly different for businesses that use contract drivers instead of their own vehicles. Take Canton Crossing Wine & Spirits, for example. The alcohol delivery service, Drizly, launched in Baltimore last week delivers from the Canton liquor store for a $5 delivery fee.
The store doesn't have its own delivery vehicle, so it reimburses drivers the set government rate — 57.5 cents per mile.
"Since that hasn't changed yet, gas prices haven't really affected us," store owner Michael Fishman said. "I doubt they will drop it."
It's too early to tell, but if the reimbursement costs for drivers are higher than owning a car, Canton Crossing Wine & Spirits may purchase its own delivery vehicle.
Similarly, OrderUp's drivers are contract workers who also use their own cars. The company, which delivers food for restaurants that don't offer their own delivery services, has about 50 drivers in the Baltimore area. Drivers receive a portion of delivery charges plus tips.
Lower gas prices mean drivers' income stays the same, but their expenses decrease, so there's more incentive for drivers to work for a company like OrderUp. OrderUp 's Jason Kwicien said the startup has seen a recent uptick in driver applications as gas prices have dropped.
"It's a really good time to get in on this sharing economy that's going on because gas prices are dropping," said Kwicien, who is vice president of delivery services. "It's encouraging people to join the 1099 economy."See Original Article