thepizza:
… Yes, .20 per delivery. My average delivery is 2 miles round trip. …
Thanks. You must have huge volume to need 4 cars for such a small area! I hope you are doing as well as it seems!
thepizza:
….24 per mile for a grand total of .866 for a 2 mile delivery, if my math is right. But if it was an owned car then after it was paid for then you would drop the .48 from the equation. …
So your total cost per mile to operate is 43 to 48 cents per mile if I understand you right?
From my understanding of the industry, the average mileage reimbursement for delivery drivers is about 25 cents per mile. Many drivers get none.
The current IRS rate is 50 cents per mile, not very far off from your numbers. Maybe the IRS rate IS a reasonable approximation for mileage costs.
thepizza:
Labor and taxes equal about another $1 - $1.50 per delivery. By far the greatest cost in a delivery is the labor and driver induced damage to the cars.
Aren’t labor costs the about same for in store orders also? Aren’t most damages covered by insurance? At 15,000 miles, $150 of out of pocket damage only adds one cent per mile in additional cost.
Also, doesn’t the additional volume you gain by adding delivery offset the additional costs somewhat by making your business more labor and cost efficient per hour? (An awkward way of saying that increasing output decreases cost per unit.)