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Rising Gas Prices Squeezing Taxis, Delivery Businesses

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(Sacramento, CA)
Monday, March 7, 2011

In Downtown Sacramento, a row of taxi cabs are parked along L Street, next to the Capitol building. Three cabbies are standing alongside their cars waiting for the next fare. The topic of conversation: gas.

"Everybody knows gas prices go up every day, every day."

One of the drivers is Mansoor Aghdam. He's been driving a taxi for about three years.

"In Sacramento this business is very slow. When gas goes up, it's not good for us."

Aghdam says high gas prices are eating into his profits because a city ordinance prohibits taxis from imposing fuel surcharges.

"My price is fixed by the city, we cannot charge more than the taxi meter."

While cab drivers may be restricted on how much they can charge customers, other businesses aren't.

Patrick DeHaan is an analyst with gas price tracking website: GasBuddy.com. He says small business owners, already hurting from a slow economic recovery, are feeling the pinch of rising gas prices.

"They will have no choice at some point but to pass much of these increases on whether that's higher charge for pizza delivery or a higher charge for flower delivery."

Jim Relles agrees. He owns Relles Florists in Sacramento and has a fleet of seven delivery vehicles. Relles says he's trying to figure out how to reduce costs and still provide good customer service.

"Maybe we will deliver to certain areas only once a day. And if the consumer wants the product delivered by a certain time there may be a surcharge."

Analysts attribute the swift rise in gas prices to tensions in the Middle East. They say even if things calm down in that part of the world, California gas prices typically rise during spring in anticipation of the summer driving season.

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