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Delivery Radius

We deliver as far as they want to pay at 50 cents a mile, one way. (We thought about raising that amount when the gas went way up but never did and now gas prices are back almost lower than we started so good thing we didn’t tinker and get people freaked out.) We usually go 5-7 miles on average, but sometimes 10 to 20 miles away. It’s mostly rural.
 
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We’re in a town of about 25K, so we don’t have to think about this too much. But, there is a camp ground and a very large mobile home park about 3-5 miles from town that I won’t send my drivers to. So, my radius is probably 7-10 miles.
 
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During rush hour, drive 10 to 15 minutes in each direction. Base your radius on those figures. You could use longer times, just figure out how long you want your customers to wait for a pizza: Store time + drive time = delivery time.

The rate for mileage is currently 58.5 cents per mile for business use of a vehicle. Jan 1st it goes down to 55 cents per mile.
 
gregster:
The rate for mileage is currently 58.5 cents per mile for business use of a vehicle. Jan 1st it goes down to 55 cents per mile.
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Thought I should add that the delivery cars are owned and maintained by us. Often we are the delivery drivers, but if we aren’t then the drivers are paid full wages and we are paying for all the gas, insurance, etc. on our own vehicles. We figured out one time that it costs us far, far, far more to deliver than we receive but it’s mostly goodwill and advertising (especially now that my Scion xB is wrapped).
 
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we sat down with a map and looked at the most populas areas within 5 miles, then we drove to each if we couldnt do a round trip to the farthest one in 25 minutes we closed highlighted those secections and let the customer know that they are in our red zone, meaning that we would deliver to IF we were not bottleknecked like on a friday and that there is an extra .50 for the delivery (driver gets). I have noticed that to the t almost everyone has started ordering sooner. before our rush…
 
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We drove 8 minutes in every direction from our store. That gave us a starting radius. We then extended our area where there were ‘pockets’ of heavy population and scaled back the area where there were ‘dead’ spots.
 
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Does anyone charge for delivery based on so much per mile?..So the farther they are, the more they pay…
 
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royster13:
Does anyone charge for delivery based on so much per mile?..So the farther they are, the more they pay…
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My guess is that if you did that, customers would always be arguing that “It’s not that far!”
 
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royster13:
Does anyone charge for delivery based on so much per mile?..So the farther they are, the more they pay…
Click to expand...
We charge a minimum of $2 for up to four miles away or 50 cents a mile (one way). Some deliveries are $8!! No one complains. They are happy to stay in their homes and have deliveries. Most of our deliveries are in the $3 range.
 
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Our delivery charge is $2.20. We deliver everywhere in the city limits and a few areas outside them (at our end of town). In normal traffic, there is no place we deliver that takes 10 minutes to get to and most are less than 5 miutes.

If you pay your driver $7.00 per hour they are costing you about $1.40 every 10 minutes (with work comp, unemployment, fica etc). Those of you talking about drive times of 10-20 minutes each way and longer should have a good hard look at the math. Counting driver wages for the time to check out the order (put together sides, hot bag etc, driving, time at the door plus either mileage or vehicle expenses, you are looking at a delivery that costs you between $9-$17 to make. There is no kind of pricing that supports this as a regular delivery radius. (special situations for large orders is different)
 
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gregster:
The rate for mileage is currently 58.5 cents per mile for business use of a vehicle. Jan 1st it goes down to 55 cents per mile.
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Great for the drivers to remember if they deduct mileage. :lol:

You just couldn’t help yourself? No one is paying that much to drivers and we know your position on this.

Oh, we are limiting to six minutes.
 
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Dewar's Pizza Bakery:
gregster:
The rate for mileage is currently 58.5 cents per mile for business use of a vehicle. Jan 1st it goes down to 55 cents per mile.
Click to expand...
Great for the drivers to remember if they deduct mileage. :lol:

You just couldn’t help yourself? No one is paying that much to drivers and we know your position on this.

Oh, we are limiting to six minutes.
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Couldn’t help what, but post a fact?

I thought everyone who posted here complied with minimum wage laws. Are you saying that some don’t’? If not, then please clarify what you ARE saying.

P.s. Drivers can only deduct the amount that they are under-reimbursed for mileage from their income, because it becomes an out of pocket expense. If they pay out of pocket for business use of a vehicle, it does reduce their income accordingly. That reduces their taxes slightly only if they get to itemize. Otherwise it’s not deductible at all. Even if they can take the deduction, only a tiny percentage of the loss is recouped (a percentage equal to your tax percentage rate).
 
gregster:
Couldn’t help what, but post a fact?

I thought everyone who posted here complied with minimum wage laws. Are you saying that some don’t’? If not, then please clarify what you ARE saying.

P.s. Drivers can only deduct the amount that they are under-reimbursed for mileage from their income, because it becomes an out of pocket expense. If they pay out of pocket for business use of a vehicle, it does reduce their income accordingly. That reduces their taxes slightly only if they get to itemize. Otherwise it’s not deductible at all. Even if they can take the deduction, only a tiny percentage of the loss is recouped (a percentage equal to your tax percentage rate).
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I am saying that no one is paying 58 cents a mile to their drivers.

And yes, drivers can deduct the difference between what they are paid for delivery and the federal standard mileage deduction (providing they keep a timely and accurate log).
 
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Dewar's Pizza Bakery:
gregster:
Couldn’t help what, but post a fact?

I thought everyone who posted here complied with minimum wage laws. Are you saying that some don’t’? If not, then please clarify what you ARE saying.

P.s. Drivers can only deduct the amount that they are under-reimbursed for mileage from their income, because it becomes an out of pocket expense. If they pay out of pocket for business use of a vehicle, it does reduce their income accordingly. That reduces their taxes slightly only if they get to itemize. Otherwise it’s not deductible at all. Even if they can take the deduction, only a tiny percentage of the loss is recouped (a percentage equal to your tax percentage rate).
Click to expand...
I am saying that no one is paying 58 cents a mile to their drivers.

And yes, drivers can deduct the difference between what they are paid for delivery and the federal standard mileage deduction (providing they keep a timely and accurate log).
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If they paid minimum wage or below, why wouldn’t they pay the rate required by the DOL? Are you saying that drivers SHOULD pay part of the cost of delivering pizza? I really don’t understand what you are saying. Please clarify.
 
Gregster and everyone else.

PLEASE DO NOT HIJACK THIS THREAD the subject here is DELIVERY RADIUS.
 
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