Servicing (except perhaps puncture repairs) is a very low margin business. This is why online retail has hurt the bike industry so hard: the servicing was subsidized by bike and component sales. Now, local bike shops are expected to service bikes purchased online.
Isn't this self-defeating? Why would they refuse a service instead of charging more? I expect to be able to buy a bike online and the shop assembles and adjusts it for me (of course for a price).
Ive experience with three shops, given the lowish margins, transaction costs of stock and sometimes reduction in mechanics - its not nearly enough to make up the deficit. The most lucrative services, fittings, are not something every shop does or is equipped for. Maintenance is relatively cheap and 2020 waiting lists were sometimes months long given the spike in riders forcing many to DIY. Many will let you order parts through the shop but prices are almost always more expensive than going to the vendor site.
If youve only so many mechanics, who do you really benefit increasing the price when most people will end up on the wait list anyway? Then you run the risk of losing them to the next shop.