What if EV’s are not the most disruptive new technology to threaten gas stations? Maybe, just maybe, the biggest threat is the same one that is taking down countless other industries. Yep, you got it, that supercomputer in your pocket.
Mobilization is bringing change to so many industries right now it is hard to keep up but this mobile disruption has not applied to the fuels industry yet. Take mobile payments. Everyone said five years ago was going to be the next big wave to impact gasoline retailers. It has only now started to move the needle and only a small fraction of consumers are using their phone to turn on the gas pump.
So what has been most surprising to me once I started to look for how mobile could impact how consumers fuel their cars was just how many new businesses were being created to address the potential. After at first jotting down a couple of notes to compare various offerings I ended up compiling the chart below of no less than a eleven new startups. These companies all want to steal away gas station customers by bringing the fuel directly to their vehicle.
Importantly, the fuel is not delivered to the customer, it is delivered to their vehicle while it is parked. This approach is all about freeing up the time the consumer would have to invest in fueling their vehicle by eliminating an extra stop on the way home or on the way out of town.
With nearly a dozen companies working to win over drivers one would expect a lot of diversity in business models and pricing. This roster doesn’t disappoint on that count. Fees or no Fees? Pay by the car or by the location? Charge fees for each delivery or sell monthly memberships? Deliver regular or premium or offer both? Compete with the price offered by the gas station around the corner or the average price across your city?
Each of these companies answers those questions a little differently, and in just the past few months I have been tracking them many have made changes and adjustments to their business models and pricing approaches. (If you have updates or new information on any of these businesses please comment below and I will update the data as things evolve.)
Most of these companies are also taking a widely different approach when it comes to the physical delivery. One firm is using free lancers who agree to deliver fuel to a consumer’s car from their own car or truck, think of it as the closest to Uber’s ride sharing business model. Others are seeking to innovate in the area of fuel storage tanks and how to work within DOT regulations regarding Haz-Mat placarding and driver qualifications. One is taking a rather traditional approach to the truck itself but is positioning the service to be offered by employers as a new perk for time pressed employees.
Interestingly I have only found one of these companies that has even contemplated working with the existing fuels industry. Most simply see the industry as one more to be disrupted by mobile technology and a fresh perspective on consumer tastes. In direct discussions and by reading their claims I found many of these startups seem to have limited knowledge about how the fuels industry and supply chain actually works today and even less interest in leveraging what has already been built to service consumers in a new way.
These company founders and employees also appear to be fearless, or perhaps naïve, in the face of fire codes or environmental restrictions and regulations. They also seem to have little worry about limitations imposed by property owners or local communities. I have little doubt that all of these factors will come into play if and when we see a significant number of consumers show interest in the service. Once these companies are “on the radar” of regulators they will come to appreciate just how difficult it is to build a business of any scale in the fuels industry.
Faced with the regulatory hostility and what at best is disdain from property owners I believe they will find it is even harder to consistently make money off of the scale they do achieve even if you can consistently interest customers in their service. In the mean time I feel these companies and the excited founders who started them bear watching.
These companies ability to disrupt the over half a trillion dollar a year US fuels industry seems unlikely, but that is the point. It is always the most unlikely of suspects that create the most disruption and long shots do occasionally succeed. I remain thankful that we live and work in a country where such a combination of optimism, hubris, creativity and drive have a chance to give it a shot. This is going to be fun to watch.