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Small businesses hit hard by high gas prices

February 22, 2012 12:00:00 AM PST
When gas prices go up, it affects individual consumers and businesses, but small businesses often get hit hardest.

That's because they typically don't have the big cash reserves that would help them deal with increases in the cost of doing business. It's especially true for businesses that depend on gasoline as an everyday expense.

For a moving company to move, the moving trucks need fuel, and even a small independent company like Remington Moving and Storage in Gardena uses a lot of fuel.

"We're filling up 4- to 5,000 gallons a week, so it's a pretty big deal for us," said Noah Davis of Remington Moving and Storage.

Davis said the recent spike in fuel costs has taken a bite of out his company's bottom line, increasing operating costs by at least 30 percent.

"Most companies do have a fuel surcharge. We have been really resisting to do that," Davis said.

Davis says it's an industry-wide issue, with moving companies finding new ways to cut costs.

"The only thing we can do is we manage our routes better," Davis said.

In Los Angeles, taxi cab drivers are independent contractors. That means drivers like Leon Slomovic pay for gas out of their own pocket.

"It's just sort of the straw that breaks the camel's back," Slomovic said.

The rates for cab fares are set by the city, and the last rate increase was in 2008, when gas was about $3 a gallon.

Yet there are other local businessmen with a far different perspective. Greg Palmer, who runs a fire sprinkler testing company based in Burbank, said compared to fuel costs in his native England, Americans have it good.

"Gas is a tremendous bargain in America," Palmer said.

The Automobile Club says gas prices In Southern California have reached their highest levels in nine months, with no relief in sight. According to AAA, Wednesday's average in the Los Angeles-Long Beach area is $4.11 for a gallon of regular - that's a 3-cent jump in one day.