Pizza companies typically reimburse their delivery drivers between about $0.20 and $0.35 per mile, while the IRS standard business mileage reimbursement rate (“the IRS rate”) is currently $0.655 per mile. Courts recognize that the IRS rate represents the “national average of the cost of operating a motor vehicle.” See, e.g., Zellagui v. MCD Pizza, Inc., 59 F.Supp.3d 712, 716 (E.D. Pa. 2014).

So how do pizza companies justify reimbursing their delivery so much less? Pizza companies typically rely on a combination of unsound methods such as:

1. Manipulation of gasoline costs: Pizza companies often base gas costs on vehicles with higher EPA fuel economy ratings than most pizza delivery vehicles. Many pizza companies are also quick to decrease reimbursements when gas prices fall, but slow to increase reimbursements when gas prices rise.
2. Manipulation of depreciation costs: Pizza companies often incorrectly assume that pizza delivery vehicles experience little or no loss of value while driven on the job because they are older vehicles. Not true. Pizza companies also often argue that they are only responsible for reimbursing “mileage-based depreciation” but not “age-based depreciation,” then the pizza companies argue that most vehicle depreciation is “age-based.” In reality, there is no accepted or valid way to distinguish “mileage-based depreciation” from “age-based depreciation” of a vehicle. Courts and arbitrators find that employers must reimburse all depreciation suffered on the job.
3. Manipulation of repair and maintenance costs: Pizza companies often base their vehicle cost reimbursements on lower repair and maintenance costs of newer vehicles. Some pizza companies even reimburse for less than the repair and maintenance costs of a new vehicle. To the contrary, common sense and experience tell all drivers that vehicles become more expensive to repair and maintain as they age and reach higher odometer mileage. See, e.g., Your Mechanic Website.
4. Manipulation of insurance and registration costs: Most pizza delivery companies refuse to reimburse their drivers for vehicle insurance and registration costs on the basis that the drivers must purchase vehicle insurance and registrations for their personal driving. However, courts and arbitrators reject that argument. They hold that employers must reimburse any costs that they “tend to shift” to their employees and reduce net wages below the minimum (no requirement of showing minimum wage violations in California, Montana and Washington, D.C. to obtain recovery).

These common methods of deflating vehicle costs have been repeatedly exposed and rejected by fact finders. See Results page.