The Gas Pump thread

[minivanman]

This ^^^

I think the actual solution to this pain point is to cut out the c-store entirely.

Gasoline delivery. An app where you punch in the location of your car (parking lot at work for instance), the app already contains your license plate number and automatic payment after your initial setup, and then they fill your car for you.

The problems with that are access to the gas tank (internal releases), gasoline margins, and government restrictions.

However, if the tech exists to let Amazon into your home for deliveries, the tech certainly exists to let someone securely into your car...it just has to be implemented. Government restrictions are a pain, but doable with current metering and transportation laws.

The biggest issue is margin. How much more per gallon would people pay?

This already failed once but it does not mean it couldn't be a winner in the future. Or even bring a charge to any car that is electric.

 

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[MidwestLandlord]

But I do have a question MidwestLandlord.... if this will not work at all (not the app, the app is just silly), how are the gas stations still in business in the states that require an attendant to pump the gas?

Average gas price in Oregon today is $2.959 per gallon.

Average national gas price today is $2.369

Average station pumps 2,500 gallons per day, that is an additional $1,475 per day or so in margin.

 

[MidwestLandlord]

The pumper has no reason to touch anyone's credit card, they hand the machine to the customer through the window and the customer does the work just as they do at any other credit card machine.

Like an ipad with a square attachment or something?

Could work, but metering laws requires the fuel dispenser to show the amount dispensed in both quantity and dollars, and for a receipt to be provided that shows both upon request...so you'd have to figure out how to turn the dispenser "on" and provide a receipt without swiping a card. (actually used to be really easy to do exactly for that reason...but Gilbarco and Dresser-Wayne [the two big players in retail gasoline dispensing equipment] make it a pain in the a$$ now haha)

You basically have to run it as a post-pay cash transaction and then reconcile the two point of sales separately later.

 

[BusinessNoob]

approach three different gas station owners and see if they bite on the idea. then run it for them.
if it is a go just having attendants, start an attendant staffing company to then fund the app

I spoke to my first c-store owner. She was happy to take .50c per vehicle fueled by the "pumper". As long as she didn't have to pay anything it was a enthusiastic yes.

 

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[BusinessNoob]

So this person with the app is not an employee, nor are they in an independent contractor, and they are on private property handling dangerous expensive product around the general public? Sounds like every lawyer's and every department of labor auditors dream honestly.

1) General liability insurance does not cover full service without an additional rider

2) Workman's comp does not cover full service without an additional rider

3) Environmental mediation and mitigation insurance does not cover full service without an additional rider

4) Product insurance does not cover full service without an additional rider

5) Soda company contracts dictate a certain amount of advertising and a certain amount of impulse sales opportunities in order to get the kickbacks as outlined in the contracts. This is a huge part of most c-store companies bottom lines, and delivery to the car would violate these contracts (or not allow them to begin with)

6) Tobacco companies give discounts for volume, and give steep discounts for volume sold of new products, to entice the retailer to make purchasing new tobacco products easy. Tobacco companies hands are tied when it comes to marketing, so this impulse purchasing is a huge need for them, and they make that need reflect in the retailers bottom line.

7) Delivering tobacco products to the car would be a violation of age restricted product rules/laws*

8) I suspect that delivering alcohol to the car would be a violation of liquor license rules/laws...but regardless it would be a violation of "we card" rules same as tobacco (this means no vice products could be delivered which is a huge part of c-store sales)

9) Impulse items in general are a big part of c-stores' marketing strategies

10) I suspect that a full service attendant that is on the payroll at the "tipped employee" rate would not fly with most state level labor law enforcement departments

11) It is a violation of PCI-DSS (payment card industry data security standards) for an employee to handle the customer's card (yes, lot's of businesses still do this, yes they are in violation, yes they are risking their entire business and millions of dollars in a fraud lawsuit)

12) Most people don't carry cash to tip with, and credit card processors don't consider c-stores a "tipped" industry and do not allow cash withdrawals of that type (it would be considered a cash withdrawal as there is not product being sold and no standard service fee being applied)

The only way this would work IMO, is for it to be a contracted service that the retailer can hire. However, you cut out inside sales with full service (even with store item delivery) AND the average margin on gasoline is around 5 cents a gallon (which makes hiring a service to focus on gas sales foolish)

I agree that there is a pain point there, people don't like pumping gas, but I don't see a solution to that pain point with this idea.

*the US government has this weird line of thinking where they don't really consider the forecourt (gas pump area) part of the business "establishment". So in order to properly inform the public that "we card" as required by law, it requires the customer to physically enter the actual building, or make contact at a window. Otherwise the customer is not properly informed that they are buying an age restricted product and the retailer is in violation. Meaning...you couldn't warn them solely at the pump.

Okay team now we are getting somewhere. We have a true industry professional who has joined the thread I would like to thank you MidwestLandlord for joining the thread and for your insights into this potential business model.

As far as I'm concerned all of these "problems " are just TRB's or temporary roadblocks, to be overcame by whatever means necessary.

I do believe at this time that we should drop the idea of delivering Goods to the customer who was waiting in their vehicle.

I would like to focus on speed. Someone mentioned earlier about high pressure pumps imagine if we could have a customer in and out of the pump area with a full tank of gas in 30 seconds to a minute. The margins are going to be somewhat small, so volume would be essential. The more vehicles per hour the better of course.

 

[BusinessNoob]

So this person with the app is not an employee, nor are they in an independent contractor, and they are on private property handling dangerous expensive product around the general public? Sounds like every lawyer's and every department of labor auditors dream honestly.

1) General liability insurance does not cover full service without an additional rider

2) Workman's comp does not cover full service without an additional rider

3) Environmental mediation and mitigation insurance does not cover full service without an additional rider

4) Product insurance does not cover full service without an additional rider

5) Soda company contracts dictate a certain amount of advertising and a certain amount of impulse sales opportunities in order to get the kickbacks as outlined in the contracts. This is a huge part of most c-store companies bottom lines, and delivery to the car would violate these contracts (or not allow them to begin with)

6) Tobacco companies give discounts for volume, and give steep discounts for volume sold of new products, to entice the retailer to make purchasing new tobacco products easy. Tobacco companies hands are tied when it comes to marketing, so this impulse purchasing is a huge need for them, and they make that need reflect in the retailers bottom line.

7) Delivering tobacco products to the car would be a violation of age restricted product rules/laws*

8) I suspect that delivering alcohol to the car would be a violation of liquor license rules/laws...but regardless it would be a violation of "we card" rules same as tobacco (this means no vice products could be delivered which is a huge part of c-store sales)

9) Impulse items in general are a big part of c-stores' marketing strategies

10) I suspect that a full service attendant that is on the payroll at the "tipped employee" rate would not fly with most state level labor law enforcement departments

11) It is a violation of PCI-DSS (payment card industry data security standards) for an employee to handle the customer's card (yes, lot's of businesses still do this, yes they are in violation, yes they are risking their entire business and millions of dollars in a fraud lawsuit)

12) Most people don't carry cash to tip with, and credit card processors don't consider c-stores a "tipped" industry and do not allow cash withdrawals of that type (it would be considered a cash withdrawal as there is not product being sold and no standard service fee being applied)

The only way this would work IMO, is for it to be a contracted service that the retailer can hire. However, you cut out inside sales with full service (even with store item delivery) AND the average margin on gasoline is around 5 cents a gallon (which makes hiring a service to focus on gas sales foolish)

I agree that there is a pain point there, people don't like pumping gas, but I don't see a solution to that pain point with this idea.

*the US government has this weird line of thinking where they don't really consider the forecourt (gas pump area) part of the business "establishment". So in order to properly inform the public that "we card" as required by law, it requires the customer to physically enter the actual building, or make contact at a window. Otherwise the customer is not properly informed that they are buying an age restricted product and the retailer is in violation. Meaning...you couldn't warn them solely at the pump.

What are some options for dealing with the insurance issue Midwest?

 

[Zcott]

For me it is a question of time, convenience and money.

People typically fill up as they're driving, so I see it like this...

Doing it yourself

1. Driving along
2. 'Ugh, I need to fill up!'
3. Drive to nearest station, fill up, pay, leave

Using the app

1. Driving along
2. 'Ugh, I need to fill up!'
3. Find a place to pull over (you don't want to be pulled over by the police for using your phone when driving)
4. Operate app to find nearest station
5. Drive there, which could be out of the way, have someone fill up
6. Pay through the app / at the pump / in store (if the latter, would people want someone else handling your money/card)
7. Leave

Although I see your thinking behind this, the app seems like it is less convenient and more time consuming.

On a personal view, I think tipping is stupid. I'd rather pump my own gas rather than pay someone to do something I can easily do myself.

 

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[BusinessNoob]

For me it is a question of time, convenience and money.

People typically fill up as they're driving, so I see it like this...

Doing it yourself

1. Driving along
2. 'Ugh, I need to fill up!'
3. Drive to nearest station, fill up, pay, leave

Using the app

1. Driving along
2. 'Ugh, I need to fill up!'
3. Find a place to pull over (you don't want to be pulled over by the police for using your phone when driving)
4. Operate app to find nearest station
5. Drive there, which could be out of the way, have someone fill up
6. Pay through the app / at the pump / in store (if the latter, would people want someone else handling your money/card)
7. Leave

Although I see your thinking behind this, the app seems like it is less convenient and more time consuming.

On a personal view, I think tipping is stupid. I'd rather pump my own gas rather than pay someone to do something I can easily do myself.

I appreciate your feedback sir! Nothing is set in stone and tipping may not even be involved in the process. We need to find a way to streamline the process of using the app in order to make it more convenient perhaps using a membership card where you would pull up to the pump scan your pumper card and it would go on your account

 

[Zcott]

I appreciate your feedback sir! Nothing is set in stone and tipping may not even be involved in the process. We need to find a way to streamline the process of using the app in order to make it more convenient perhaps using a membership card where you would pull up to the pump scan your pumper card and it would go on your account

If tipping is not involved in the process, would that mean that they are paid directly from the gas station?That is a large expense, which many owners might consider unnecessary.

 

[BusinessNoob]

Entrepreneurs do not shy away from problems. We gladly accept the challenge knowing full well that there is an answer somewhere, all we've got to do is find it. People just dont understand the power of an "I will" attitude. There is always many many different ways to solve problems.

 

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[BusinessNoob]

If tipping is not involved in the process, would that mean that they are paid directly from the gas station?That is a large expense, which many owners might consider unnecessary.

No, they would be paid by us, the business, who have already been paid by the customer (driver).

 

[Zcott]

So a pre-paid service? Makes sense because if they pay the app then they have to go there, they can't change their mind.

How would the money be divided though?

i.e. user selects they want $30 of gas on the app and the user pays the app
the app then gives X% to the gas station, Y% to the attendant and keeps Z% as revenue for the app

Is my understanding correct? If so, how would you work out how much percent goes to who in a way that 1) benefits the gas station - they're not making as much money as they normally would
2) pays the attendant enough money for them to stay
3) provides the app enough revenue to make a profit

On a different question, would the attendants be full employees with benefits? Or more like a 'gig' employee, like Uber Eats or Skip The Dishes kind of thing.

 

[BusinessNoob]

So a pre-paid service? Makes sense because if they pay the app then they have to go there, they can't change their mind.

How would the money be divided though?

i.e. user selects they want $30 of gas on the app and the user pays the app
the app then gives X% to the gas station, Y% to the attendant and keeps Z% as revenue for the app

Is my understanding correct? If so, how would you work out how much percent goes to who in a way that 1) benefits the gas station - they're not making as much money as they normally would
2) pays the attendant enough money for them to stay
3) provides the app enough revenue to make a profit

On a different question, would the attendants be full employees with benefits? Or more like a 'gig' employee, like Uber Eats or Skip The Dishes kind of thing.

Yes I'm thinking that dividing the pie 3 ways is best. How big of a piece each gets will take some research.

I think we are currently assuming that the attendants will be "gig" employees. The vision is for the "pumpers" to be able to use the app to find a place to go work for however long they wish. Its gonna take some serious brain power to sort the specifics of that though.

 

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[minivanman]

Average gas price in Oregon today is $2.959 per gallon.

Average national gas price today is $2.369

Average station pumps 2,500 gallons per day, that is an additional $1,475 per day or so in margin.

I think they could bring the prices closer together if they tried. I can see people paying .15c more all day long and that should be able to cover the cost and make a profit for a station that sells much gas at all. That's probably around $500 a day to pay for costs and profit. It might not work for a town of 50,000 but it would work for a large metro where people are in a hurry. And if an owner wanted to get risque, put some hot gals & guys in shorts (not too short) and not too skimpy top for the female but enough to get the males to pull in and have the guys wear tight muscle shirts. I bet that station owner could get that .80c more a gallon

Edit: That is .15c above their already profited price.

 

[MidwestLandlord]

I would like to focus on speed. Someone mentioned earlier about high pressure pumps imagine if we could have a customer in and out of the pump area with a full tank of gas in 30 seconds to a minute. The margins are going to be somewhat small, so volume would be essential. The more vehicles per hour the better of course.

Majority of states mandate 10 gallons per minute max on retail gasoline dispensing (I know because I ran 12-15 gallons per minute and got fined and shut down a bunch of times over the years...there's a reason my stations did 12,000 gallons+ per day each haha)

You'd save tons of time though by cutting out the driver doing the work...people move slow.

I spoke to my first c-store owner. She was happy to take .50c per vehicle fueled by the "pumper". As long as she didn't have to pay anything it was a enthusiastic yes.

She was happy to get paid 50 cents per car?

What are some options for dealing with the insurance issue Midwest?

They would have to be legit employees covered by the riders.

Or

They would have to be contracted independent contractors with their own insurance.

Or

They have to work for a service company that is contracted to do the work and has their own insurance.

Or

You'd have to just do it and hope nothing bad happens like an EPA level spill of 25+ gallons (been there), a fire (done that), customer or "pumper" getting fuel in their eyes (happens a lot), putting the wrong fuel in and damaging the engine (oh man, so many times), or someone driving off with the nozzle still in the car and yanking the dispenser off the island (it happens, even with breakaway connections required by law)

This stuff happens. My lawyer's new Mercedes is proof of that.

 

[minivanman]

Oh come on, he could do better than a Mercedes, they used to be special but nowadays everyone has one......

 

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[MidwestLandlord]

Yes I'm thinking that dividing the pie 3 ways is best. How big of a piece each gets will take some research.

I think we are currently assuming that the attendants will be "gig" employees. The vision is for the "pumpers" to be able to use the app to find a place to go work for however long they wish. Its gonna take some serious brain power to sort the specifics of that though.

I wonder how this would work with jobber contracts where the brand dictates (and guarantees) a certain minimum margin to the marketer?

 

[MidwestLandlord]

Oh come on, he could do better than a Mercedes, they used to be special but nowadays everyone has one......

He's a humble guy and didn't want to be too "flashy" I guess lol

 

[MidwestLandlord]

@BusinessNoob feel like I'm just raining on your parade here haha

But gasoline is a highly regulated industry...lot's of rules, laws, and regulations from municipal, county, state, and federal entities...plus entities that have massive control like credit card companies, beer brands, tobacco brands, soda brands, insurance companies, petroleum companies, ethanol companies, various associations, equipment companies, etc.

It's an out-dated slow moving industry that hasn't kept up with the times for sure...but that's because the barrier to entry is huge.

 

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[wade1mil]

Filling up is not a problem worth solving and it's chasing pennies in my opinion. However, driving to the gas station when I'm tired and I know I need gas tomorrow morning is a pain, and I MIGHT pay for someone to come to me and fill it up. How much I'm not sure, but probably not enough for it to be worth it for you as the business owner.

 

[Royce2]

I'm not sure exactly how to monetize this but because I feel like it could provide a possible solution to homelessness and extreme poverty,
I have been looking for needs, pain points etc

Don’t lose sight of the original reason why you have this idea. Let’s look for more pain points. Since Midwest said that it’s outdated, could it be not even worth it to look into gas stations? Maybe, maybe not. Maybe electric cars will already take over and there will just be a parking pad that you drive on top of and get a full charge in under 10 minutes. I remember Elon was working on a robotic arm prototype that automatically inserts the arm into the car charger port. And he also mentioned “just don’t drop anything near it” lol but that means even the billionaire is thinking about this.

 

[Legend]

...Maybe electric cars will already take over and there will just be a parking pad that you drive on top of and get a full charge in under 10 minutes. I remember Elon was working on a robotic arm prototype that automatically inserts the arm into the car charger port. And he also mentioned “just don’t drop anything near it” lol but that means even the billionaire is thinking about this.

Elon has already had the idea of just swaping the entire battery on a car while you wait. Drive up, drop the battery, new battery installed, drive off. This idea was from a while ago so maybe they've scrapped it, but...

View: https://www.youtube.com/watch?v=H5V0vL3nnHY

 

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[Legend]

Perhaps I'm wrong, but this is what I see happening in this thread

OP says "I have a solution to what I think is a problem"
The Market (aka everyone on this forum) says "I don't want your solution"
OP says "I'm moving forward anyway because I'm a go-getter"

Feel free to correct me, but isn't this how most people lose a lot of money and time. Isn't this opening a coffee shop across the street from a starbucks?

 

[BusinessNoob]

They would have to be contracted independent contractors with their own insurance.

That's that....

She was happy to get paid 50 cents per car?

Yes she was.

Majority of states mandate 10 gallons per minute max on retail gasoline dispensing

Bummer.

 

[Royce2]

Elon has already had the idea of just swaping the entire battery on a car

I remember that too and I honestly think it’s not the best idea. I would rather have a large auto charge pad just cover certain censors ona section of the car and charge it that way. Imagine like defibrillator pads that automatically extend

 

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[minivanman]

Perhaps I'm wrong, but this is what I see happening in this thread

OP says "I have a solution to what I think is a problem"
The Market (aka everyone on this forum) says "I don't want your solution"
OP says "I'm moving forward anyway because I'm a go-getter"

Feel free to correct me, but isn't this how most people lose a lot of money and time. Isn't this opening a coffee shop across the street from a starbucks?

I like opening across the street from the competition. They've already done the marketing to get the customers to the area for me. All I have to do now is actually BE better. If I ever open up a store for my appliance business I have a place picked out right across the street from the biggest appliance dealer within 20 miles. Problem is, I do internet marketing so good, I can't keep up now and I really hesitate to expand because of the workers being a pain in the @ss..... but if I did.....

3 minutes? He better get with the Nasscar guys so he can get his time down.

Getting home and realizing your car needs gas sounds like a much better app. Could be Uber like for someone to take your car and fill it up. Could do the same with repairs. Now personally, I don't like people to drive my vehicles but there are millions of people who don't care.

 

[BusinessNoob]

Perhaps I'm wrong, but this is what I see happening in this thread

OP says "I have a solution to what I think is a problem"
The Market (aka everyone on this forum) says "I don't want your solution"
OP says "I'm moving forward anyway because I'm a go-getter"

Feel free to correct me, but isn't this how most people lose a lot of money and time. Isn't this opening a coffee shop across the street from a starbucks?

With all due respect, This "business model" is in the infantile stages, far from any money being invested. I think it intelligent to give the idea a chance to bloom. This attitude, IMO, is why so few people are able to drive the fastlane. Everything is too hard, so I quit before even spending a penny...

 

[BusinessNoob]

I wonder how this would work with jobber contracts where the brand dictates (and guarantees) a certain minimum margin to the marketer?

I am not familiar with Jobber contracts, I will educate myself, Thanks!

 

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[csalvato]

If they chose to do something like that, they could get rid of the gas cap all together. You could pull up and the pump would extend to your car and fill your tank as a race car does with a fuel can. By the way, the circle is green But this is a far cry from hiring a college student to fill up your car. lol

View: https://www.youtube.com/watch?v=uMM0lRfX6YI

 

[minivanman]

View: https://www.youtube.com/watch?v=uMM0lRfX6YI

I probably shouldn't say what this reminds me of!