US drivers steering around high gas costs

"We can't keep the Civic Hybrid in the stores, people are literally buying them as they roll off the delivery trucks," says Jeffrey Smith, assistant vice president of American Honda.

Hybrid cars have been in growing demand for the past few years because of environmental concerns and the privilege granted by recent laws in California allowing owners to use carpool lanes while driving alone. But the appeal of higher gas mileage in the past few months has created even greater demand, with many buyers offering thousands above the sticker price to get their cars. "What we are seeing now is an exacerbation of the interest in hybrids spurred higher by high fuel costs," Mr. Smith says.

September auto sales figures appear to back up the anecdotal evidence. Sales of the General Motors Corporation Envoy and Chevrolet Tahoe fell more than 50 percent compared to last September, while Toyota's Prius sales increased by 90 percent from the same period last year.

Rising gas prices affect more than just car owners of course, as trucking firms, cab companies, limo services, pizza and flower deliverers all face a recurring multiple-choice test with each new go-around: take a financial hit, go out of business, change services, or pass costs on to consumers.

"Wall Street is beginning to ask big questions on how they get around," says David Popeck, executive vice president for one of the largest limo providers serving the financial community.

After gas prices soared in 2001, his industry lowered rates across the board to hold onto the limo rides it delivered annually - 700,000 at Popeck's firm alone. Now, additional gas prices are forcing $2- to $4-surcharges per ride and the firms that use his service are rethinking how they can change.

"These guys are financial analysts so they know the gas-price situation better than we do," says Popeck. "They are checking with vendors to negotiate longer term deals, looking for ways to share-rides, curtail use, and crack down on abuse from within. And this is a door-to-door, white-glove culture with ego."

How far such changes will go and how fast is far more complex than just gas prices, experts say. But from the seemingly petty, like getting more mileage with closed moon roofs, to the profound, like weighing relative social and economic costs of buses vs. trains vs. cars, the dialog is accelerating full bore.

The answers aren't always as obvious as they seem, these same experts warn. Sometimes cars are cheaper than buses (if the buses aren't full, or ply unused routes). And the additional cost of a hybrid car, may not be economical for the owner who doesn't use it enough.

"There needs to be more examination of mobility by the public and government as a whole rather than each side jumping on quick fixes that may not help in the long run," says Soot.

That examination may need to include an understanding of different responses across social class, cultural, and regional lines.

"We had a panic here but it's already over," says T.J. Campbell, sales rep at Power Toyota/Scion in Tempe, Arizona. He moved to Arizona three years ago after selling cars for 13 years in Oregon. "In Oregon, you can bet people have already started bicycling to work, but here [high gas price spikes] are just another day in the desert for these folks.

"Let's face it, if you are the owner of a luxury car in the $50,000 to $70,000 range, $3 a gallon for gas is not going to bend you out of shape," adds Diane Henson, customer service representative for Keyes Toyota in Van Nuys, Calif.

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