MERCHANTS' DILEMMA BITE BULLET ON GAS PRICES OR PASS ON COSTS TO CUSTOMERS?

Byline: Naush Boghossian Staff Writer

SANTA CLARITA - With gasoline passing the $2-a-gallon mark and predictions it could hit $3 by summer, small businesses that rely on their wheels are watching their profit margins shrink.

Gardeners, pool maintenance workers and other business people who deliver their services on wheels are struggling to cover skyrocketing gas prices while considering the inevitable - passing higher operating costs on to their customers.

``I've never seen anything like this before,'' said Javier Reyes, owner of Javier's Landscaping, as he mowed a lawn in Valencia. Gardeners, he noted, not only have to gas up their trucks, but also need fuel for lawn mowers, leaf blowers and weed-whackers.

``I'm spending a lot of money,'' he said, noting that his costs have increased by one-third. He has yet to raise his rates, though, holding on to hope that prices will drop back down.

Don Moody of Don Moody Appliances is trying to drive a more fuel- efficient route, said his partner and wife, Chris Moody.

``If someone calls with a nonemergency from an outlying area like Castaic, and I see that there's another appointment in Castaic a few days later, I ask if it's OK for them to hold off until then, so we can be more efficient,'' she said.

Fueling Moody's gas-guzzling truck costs 25 percent to 30 percent more than it did before the gasoline spike - about $150 a week to fill the tank.

Paul Welch, owner of All Clear Pool & Spa Care, hasn't yet increased his prices, although he has shuffled his drivers' routes to cut down on the distances they drive.

``If gas prices keep going up, I'll definitely have to change my prices,'' Welch said.

Mapping new routes is helping to absorb the blow of pricey fuel for Santa Clarita Bouquet Florist, which has yet to pass those prices on even though profits are dropping.

``We're being very conscientious about mapping out deliveries so trips aren't overlapping,'' said employee Tina Dowler, noting that the cost- saving measure makes it tough to time deliveries.

The impact of the gas price hikes is really pinching drivers at Yellow Cab of Santa Clarita Valley, who lease their taxis and pay for the gas out of their own pockets.

And couriers for the Now Messenger Service, which serves Santa Clarita and all of Southern California, say they have been hit hard because they use their own vehicles and pay for their own gas.

The drivers make a little over minimum wage and receive a 50 percent commission. When given a choice to raise service prices or to wait out the gas hikes, drivers chose to wait, fearing they would lose customers.

Larry Grenville, a courier at Now Messenger for over 10 years said he drives 100 to 300 miles a day. Filling his tank used to cost $13 to $20 a day, but now his small pickup truck eats $20 and $30 a day.

``At the end of the pay period, there's not much to take home,'' Grenville said. ``There's not enough money left to really go any place, so I usually sit home at nights and don't drive far on weekends.''

TIPS ON CONSERVING

Here are some gas saving tips:

--1. Properly maintain your vehicle.

--2. If you have a choice of cars, use the more fuel-efficient car.

--3. Consolidate your trips so you run all your errands at once. It's even better if you can complete all your errands at one place.

--4. Make sure your tires are inflated to the correct level. Under- or over-inflated tires can cut fuel economy by 2 percent.

--5. Cutting the air conditioning can boost fuel economy by 5 percent.

--6. Slow down. Speed burns more gasoline.

--7. Avoid quick starts and stops.

--8. Lighten your car's load. The heavier a car is, the more gas it uses.

--9. Check fuel prices at neighborhood gas stations.

--10. Check your car's owner's manual for the proper grade of gas required by your car. If it requires regular, use regular rather than a higher-priced grade.

CAPTION(S):

photo, box

Photo:

Skyrocketing gas prices have hurt small-business operators like Don Moody who owns Don Moody's Appliance Service.

Jeff Goldwater/Staff Photographer

Box: Tips on Conserving (see text)

SOURCE: Automobile Club of Southern California