Thursday, March 27, 2008

Complaints and questions

I've been getting a lot of complaints about home delivery of the newspaper lately. I've got nothing to do with that part of the business and pass those complaints along to the manager who does. But the problem causing the complaints is not likely to go away on its own and should be discussed. Here's what's happening:

Most of the papers we deliver are done so by motor-route drivers - independent contractors who use their own vehicles. They put a lot of miles on those vehicles because the area we cover - all of the southwestern corner of Pennsylvania - is so large, and we pay them a per-mile reimbursement.
As the price of gasoline continues to rise, the profit for these independent contractors continues to shrink, and more and more of them are deciding this line of work is not worth it. Finding replacements is tough. You might ask: Can't you just raise the rate of reimbursement? Consider that raising it just one cent per mile translates to an $80,000 annual expense. I don't know about you, but we don't have that kind of money just lying around. So in order to raise the mileage rate, we'd need to pass that cost on to the customer.

When you think about it, having a product delivered to your door 364 days a year for the price of a newspaper subscription is a pretty good bargain. But many subscribers are unwilling to pay more. So, if you were the publisher, what would you do?

There's no simple answer to that question. What I fear is that the rising cost of fuel will eventually make home delivery of the newspaper not economically feasible. In five or 10 years, you may have to drive somewhere to buy your copy or subscribe to it online.
I'm not looking forward to that day, but I'm afraid it's coming anyway.


Anonymous said...

An $80,000 increase for one penny per mile? Does that mean OR workers rack up 8 million miles a year?

Anonymous said...

The mileage statements are probably verified as much as the stories are.

Park Burroughs said...

Whoa, good eye! And my apologies. The figure I was given was not for what it would cost to raise the subsidy for independent drivers by a penny but to raise the reimbursement for O-R employees by a nickel.
Raising the subsidy for drivers by a penny would cost $23,300 per year. Of course, raising it one penny wouldn't help drivers much, but a nickel would, at an annual cost of $116,000.

Anonymous said...

Unfortunately for the future of newspapers, you can take a laptop computer to the bathroom with you. However, it's unlikely that you'll let your dog pee on your laptop. There is hope!

Brant said...

My puppy doesn't pee on newspapers, but he can turn one into confetti in about 30 seconds. So, if you're having a ticket-tape parade, let me know.

Brant said...

I meant ticker-tape. Damn fingers.

Anonymous said...

The accessibility of information via the internet is only unfortunate for newspapers if they fail to monetize their websites... You guys wouldn't happen to need some research would you?