What's next? An Uber-like service that will deliver gasoline directly to your car that is parked in your driveway?
Hmm... Come to think of it, that would actually be pretty sweet. I would never have to stop and fill up my gas tank! It would just always be full! A gas delivery truck would come in the middle of the night (according to a schedule I define using the mobile app), and it would fill up my car's tank and automatically bill my credit card!
Filld customers pay the lowest price of the three gas stations closest to their location plus a small delivery fee.
For example, if the three gas stations closest to you charge $2.62, $2.55 and $2.67 per gallon, you will pay $2.55. We purchase this pricing data from the Oil Price Indexing Service (OPIS), and we update it regularly.
How do they make money? I wonder how high the delivery fee is.
They're not paying the gas station price. They're likely paying bulk prices then just using the local prices as your price.
Edit: $3 for delivery generally and they're using F250 trucks. Call it 1.5t in the bed or about 400 gallons plus tank. They probably have a contract with the local bulk terminal so if you're paying 2.55, they might be paying 30% (no idea what this margin is) less or so. @400 us-gal if they make 30% on the gas plus $3 per 15gal tank, revenue would be in the $380/load range for an average of 26 tanks of gas per load.
Edit2: regarding the loss leader strategy, they still have to truck the gas to the station which adds overhead. By going direct to customer (again, assuming they're loading at the bulk terminal) they remove a couple middlemen who's position they then take.
Gas is actually a loss leader at many/most gas stations. My parents owned a gas station about 10 years ago and one of the reasons they sold it and got out of that business was because competition was so fierce that they had to sell gas at or below the bulk price they paid for it. In other words, they effectively lost a few pennies every time someone bought gas. All profit came from in-store sales of other items.
>Gas is actually a loss leader...all profit came from in-store sales
That and the increasing prevalence of electric cars, Uber, and other shifts are why the gas-delivery model will likely be unsuccessful over any reasonable duration.
The idea seems to be moving in the opposite direction as the rest of the world.
The parent's story is essentially universal in the US and has been for decades.
Almost no convenience stores make money on gasoline, unless they're operating a special setup (the convenience store chain Sheetz for example has tried to build out their own gasoline business to cure this problem). There are a few routine exceptions, usually involving either some kind of rare location (eg right outside an airport exit, usually operating under a special arrangement), or a rare event (something that causes gasoline to be in unusual demand / limited supply).
When I did the books for a gas station in Canada it was similar. This was a franchise location as well, so they had the parent company buying gas for them.
Profit on gas was measured in cents per liter, with premium giving the best margins. And by best I mean $0.023/L or $0.087/gal.
I don't think that "(no idea what the margin is)" is what OP meant by running the numbers.
Mostly a "pamper early adopters with VC money" operation I think, possibly with a profitability story (that may or may not turn out to be realistic) centered around high real estate value areas: in those places where the ground occupied by a gas pump and its accompanying infrastructure plays a significant role in the local fuel price, using public rights of way for mobile pumps is effectively a value transfer from the public to the pump operator.
Back during the original dotcom, when all anybody could think of was basically a mailorder shop with a website, I joked with friends how a "fuel.com" could be a great parody of contemporary startups and/or a fine participant in the hype wave.
I still think that sending pickup trucks to fill individual cars is stupid, but it's leaps and bounds less stupid than "mailorder fuel" would have been. A nice illustration of the difference between the current breed of VC money sinks and the dotcoms of old.
I don't disagree at all. My numbers should be in the ballpark but generous. If someone has more data sources they can link to, fire away.
I think the real takeaway here is that even at ~$400 per 25 cars refueled, it's not a super great market to be in. It's also kind of like starting a printing company during the 21st century (cough cough Vista Print). Yes, there's a sliver of margin to be had with aggressive automation and negotiation but at the end of the day, you'll be out of business in a couple decades when the underlying technology changes, in this case electric cars that can be charged at home.
On the other hand, it's likely that petrol stations will begin to close as electric cars become more and more widespread, but until literally no one uses petrol any more(and that will take a very long time) you can always make business by delivering fuel directly(Oh you have a 2010 vintage ICE car and the nearest operating petrol station is 50 miles away? we will bring fuel to you!)
Yea, based on the eia data it should all be ballpark but the calculation is there mostly just to serve as an example. You could shave a little off gas-per-fillup in retrospect because very few people will use 15gal exactly and few new car gas tanks are over 15gal but the $3 service charge balances that out somewhat. Based on the map on their site, it looks like their margins might be slimmer than what I calculated but they succeed by having a lot of customers in a very small area that they serve.
That ignores taxes which make up ~30% of retail price depending on the price of oil at the time.
Further, gas stations generally need to pay quite a bit to get gas shipped to them as it's heavy (12 gallons is over 75 pounds), dangerous, and often very far away.
Manhattan no longer has gas stations south of 12th street, and yet people pay > $400 for a parking space. This sounds like an ideal starting point for a burgeoning delivery service.
Delivering to a bunch of vehicles on one street or hitting a bunch of vehicles in one lot/garage is better than one fill per location.
It seems like they shouldn't be targeting consumers except as a means to target small businesses and municipal fleets.
Modern fuel pumps are slow compared to the old ones. (Seriously, if you stop at a gas station with the old style pumps it'll blow your mind how fast they are.) Sending someone to put 20gal in a van takes at least 20min assuming a few minutes driving. @ $9/hr that's the same labor cost as a $3 fee. Paying these people to come to you and fill your fleet of vans costs the same but is more convenient and ensures you get the lowest local price.
I swear business materialize out of thin air, when someone literally just thinks of them. How else can you explain that it seems like EVERY idea already has an app + business!
Much better than the previous entrant. These people have their trucks placarded ("1203") and run their people through the training required for fuel truck drivers. You really don't want Uber-level drivers driving fuel trucks.
Given Uber's history, I would guess they would find out where everybody associated with the fire department, police department, county, and state regulators live and then block any deliveries to them or their neighbors.
Fire Marshalls have to catch you before they can use their teeth.
These guys are going to war with mountain view city council as soon as it wakes up. Seems like once a week someone on the council is saying they're gonna "do something" about the private drivers with loads of fuel in the back of their truck, or the fact that airbnb isn't getting taxed. What "something" means and why "something" needs to be done has yet to be clarified.
This actually is kind of an "obvious" idea once you think about it considering that this is exactly what my oil company does. They monitor my oil tank and come fill it when its about half empty and leave the bill on the door and you can optionally keep a credit card on file for autopay if you want.
The convenience factor is really on point, I no longer think about oil at all, its always taken care of.
The company I work for does this :) We use cellular & network connections to do remote monitoring of tanks. It can be very valuable service for fuel delivery companies, since they can fill up on an as needed basis rather than driving out to a location only to find they only need to top up 5% of the tank.
I did that for years (called around) and potentially paying a small markup is totally worth the price of not having to think about oil. Plus, they gave me $150 off for signing up.
There's lots of reasons that you have beyond the normal amount of garbage or difficult to deal with garbage. It's really hard to get it removed if you need it on a short notice.
A lot of municipalities have limits refuse. For example in NYC you can no longer get rid of electronics in the regular trash. You're supposed to take them to a place that can deal with it. Fair enough. The problem is that there aren't many places and some of them are only open week days. Folks from outer burrows that cannot drive are not going to be able to do that.
Also, sometimes you need to get rid of a lot of stuff that you don't want to move when moving because you're going to get new stuff on the other side (bed, mattress). It'd be so much easier to call somebody up and have them just take it away on the last day of your lease.
>There's lots of reasons that you have beyond the normal amount of garbage or difficult to deal with garbage. It's really hard to get it removed if you need it on a short notice.
Apps are the "1-800-cheesy-mnemonic" for the new generation.
it is 100% the same formula. Start by hiding your real cost in weird price schemes. Advertise like crazy. ???. Profit.
It is a proven method. And it revamped for every generation. 1-800, app, "as seen on tv", catalogs, etc. And now you have subscription services of tangible goods for the millennials.
That's the first thing I thought, doesn't this exist? Side note, the founder of 1-800-GOT-JUNK was on an interesting episode of NPR's "How I Built This" podcast (http://one.npr.org/?sharedMediaId=523277830:523967624).
Just got a new bed (online order) a couple months ago, and paid a service to take the old one away... we have curbside pickup, but only a few times a year, so needed to pay the $90. I wound up shopping around as there was a range of $90-170 to retrieve a mattress and box. There's definitely room for on demand services for that... especially in larger populated areas.
Yup, this is a service that already exists in very informal ways. Check craigslist for "trash and junk removal".
Having had a garage I recently organized and about a pickup load full of trash/recyclables I would have absolutely loved such a service vs. trying to find someone non-flaky on CL to actually show up when they said they would.
That's what I did when I moved back from SF => NYC. But it occupied a few hours of my time to send emails, wait for responses, try to negotiate time / price. Time I did not have. If I could open a spend 10 minutes, it would be worthwhile in some situations.
I have had good luck getting rid of old things by posting them for free on Craigslist and leaving them outside. If it's at all usable someone usually comes by within an hour or two.
This isn't very uber-like, since it's only for businesses. I'd love to be able to easily get someone to pick up cardboard and other trash at my house. We're big users of Amazon Prime and also starting a business that involves a lot of large deliveries, so we're completely buried in cardboard and the expensive local garbage/recycling service cannot support us. We're ordering our second dumpster in less than a year to try to clear out.
They should consider residential too. Out where I am you have to haul your own trash to a few spots around the county. I don't mind, but I'm sure there are plenty of people who'd rather have access to a service like this.
I believe many of the refueling companies have shifted to servicing employees of big companies at their corporate parking lots since the economics are way better this way.
How do you verify the gas from the stations you stop at now?
The most thought I've put into it when I had a VW TDI was to fill up at a stations that were busy and more likely to have fresh fuel. A brand name station isn't a guarantee that the fuel is fresh if it is on the road less traveled.
That's a fair question to ask but I have some close friends working in the Petroleum industry and they insist on only getting gas from Chevron and Shell from the insider information they have. Not sure if it means much at all though.
Probably not. The gas from many other stations will come from the same refineries. And gasoline is not that perishable, I doubt that the car minds if it has been at the station for 1 week.
The QuikTrip chain in the South has signs that say they have "guaranteed gasoline". Apparently this means it won't hurt your engine: https://www.quiktrip.com/gasoline - but I like to think it means that they're guaranteeing their product is gasoline, because I'm easily amused.
http://itsalwayssunny.wikia.com/wiki/The_Gang_Recycles_Their...
What's next? An Uber-like service that will deliver gasoline directly to your car that is parked in your driveway?
Hmm... Come to think of it, that would actually be pretty sweet. I would never have to stop and fill up my gas tank! It would just always be full! A gas delivery truck would come in the middle of the night (according to a schedule I define using the mobile app), and it would fill up my car's tank and automatically bill my credit card!