How do most pizza shops pay drivers for using their cars?

Three ways dominate. Flat per-delivery fees, usually $1.25 to $2.00 per run, are most common at independents and small franchise groups. Larger operations often default to the IRS standard mileage rate, $0.76 per mile since July 2026. Documented local per-mile rates, the structure that matches what courts now require, remain the least common of the three, which is why delivery reimbursement lawsuits keep succeeding.

Is a flat delivery fee enough to cover a driver's car costs?

Almost never. A $1.50 fee over a typical 5.5-mile round trip works out to about $0.27 per mile, while the documented cost of a delivery mile averages $0.47 nationally and runs higher in most metros. The roughly $0.20-per-mile gap comes out of the driver's pocket, about $3,000 per year for a full-timer, and that absorbed gap is the core allegation in essentially every delivery pay lawsuit.

Is paying the IRS mileage rate safe for a pizza shop?

It is legal and generous, but since the Sixth Circuit's 2024 Parker and Bradford rulings it is not an automatic legal defense, and in most states it substantially overpays: $0.76 against documented costs of $0.42 to $0.50 in much of the country is roughly $4,000 or more per full-time driver per year spent without buying protection. The defensible structure is a documented rate built for each store's location.

ReportAugust 2026 · Annual studyInteractive · Citable with attribution

The State of Pizza Delivery Reimbursement 2026

How pizza shops actually pay drivers for using their cars, what each structure really costs, and how the law moved underneath all of it. Built from public filings and court records; every figure citable with attribution.

$0.27

what a $1.50 flat fee really pays per mile

$0.47

national documented cost of a delivery mile

$0.76

the IRS default most big operators pay

court rulings since 2024 that ended both defaults as defenses

Three ways shops pay, one zone that holds up

Nearly every pizza shop with in-house delivery pays drivers one of three ways: a flat fee per run (easy, common, and modeling out near $0.27 per mile), the IRS rate default (generous, common at larger groups, overpaying most markets by $0.25 or more), or a documented local rate (the minority practice, and the only one inside the zone courts now measure against). Try yours:

Check your structure

Pick how you pay today. See where it lands against your state's documented cost.

Fee per delivery ($)

Your state

$0.20 · under-covering

documented zone

overpaying · $0.80

$0.27/mi

Illustrative model: 5.5-mile average round trip, 15,000 delivery miles per year, state documented midpoints for a new compact sedan. Nothing is stored.

How the law moved, 2024 to 2026

MARCH 2024

Parker & Bradford (6th Cir.): the IRS rate and "reasonable approximation" both rejected as automatic defenses. Actual cost becomes the measure in MI, OH, KY, TN.

JANUARY 2026

West v. BAM! Pizza: a flat-rate approximation rejected outside the Sixth Circuit, with recordkeeping treated as the employer's burden.

JULY 2026

IRS raises the rate to $0.76 mid-year, a rare move that instantly widened every defaulting shop's overpayment by three cents a mile.

The direction is uniform: away from proxies, toward documentation. The full case history is in our litigation roundup.

The 2026 risk map

STATUTE STATES

CA · IL · MA
Reimbursement is a standalone duty at any wage. MA triples damages automatically.

BINDING CASE-LAW STATES

MI · OH · KY · TN
The Parker actual-cost standard is controlling law today.

RISING-FLOOR STATES

FL and indexed-wage states
Scheduled raises shrink the cushion yearly; static programs decay into violations.

FLSA-BASELINE STATES

TX and most others
Federal law governs; thin tipped-wage cushions make shortfalls bite fast.

State-by-state operator guides for every tier are linked from the rates-by-state hub.

What it means for your shop

The two common structures fail in opposite directions, so the fix is the same regardless of which you run today: a documented per-mile rate for each store's ZIP and each vehicle class, paid on dispatch-recorded miles, refreshed as costs move. In cheap-cost states that change usually saves money against the IRS default; in expensive states it closes the gap lawsuits are built on. Two minutes in the 10-point self-audit shows which direction your shop is exposed in.

Data sources

State insurance rate filings: public rating examples from state insurance department portals (SERFF; Florida's FLOIR IRFS), standard-market entities of major carriers, with delivery-use loading
U.S. Energy Information Administration: regional gasoline and state electricity prices
Vehicle pricing data: current MSRP and model-year values via commercial vehicle-data APIs
AAA "Your Driving Costs": per-mile maintenance and tire allowance schedules
IRS notices: standard mileage rates ($0.725 Jan to Jun 2026; $0.76 from July 1)
Federal court records: Parker v. Battle Creek Pizza and Bradford v. Team Pizza (6th Cir. 2024); West v. BAM! Pizza Management (D.N.M. 2026); public settlement records
State and federal wage schedules: minimum wage and tipped-wage rates from state labor agencies and the U.S. DOL

Methodology and citation

Effective-rate models assume a 5.5-mile average round trip and 15,000 annual delivery miles per full-time driver. Documented costs are RatesReady rate-engine midpoints for a representative new compact sedan in delivery use, built from the sources above. All figures are modeled estimates, not measurements of any specific shop or driver. Cite as "RatesReady, The State of Pizza Delivery Reimbursement 2026" with a link to this page; state, metro, and vehicle-class cuts available on request.

This report is educational analysis, not legal advice. Obligations vary by state and facts; figures vary by ZIP code, vehicle, and data period.