It would be easy to look at the business model of on-demand refueling and conclude that it is all about the fuel business. But that would be like saying Facebook is in the entertainment business or Amazon is in the book business. Social media was the platform upon which Facebook built a huge advertising revenue stream. Amazon became the “everything store” and in the meantime built a nice advertising business too (Sponsored Products) and a technology company (AWS).
Think this analogy is a stretch? Keep in mind there are over 260M registered vehicles in the states and in 2018 there were over 140B gallons of finished motor gasoline consumed in the US. Whatever your thoughts are on this business model, you can’t argue that the Total Available Market doesn’t offer some interesting opportunities for innovative companies.
So what could mobile refueling companies be selling?
Audience
Suppose you own a car dealership and you want to drive foot traffic (users) to your lot (website). You realize that for every 20 customers you get to visit the dealership, one will actually buy a car (conversion rate). On average you make $350 on the sale of a new car and that customer will earn you another $1000 profit on oil changes and repairs over the next several years (lifetime value). As the owner of the dealership, how much are you willing to pay to bring in new potential customers (pay-per-click)?
Now, lets get specific. Suppose you are overstocked on pickup trucks and the OEM is offering a conquest incentive. So your dealership wants to get the message out to drivers of pickups of a different make that are over 2 years old (targeting).
Enter the mobile refueler. Users of the Booster, Filld, Gas Ninjas, Yoshi etc. app might receive a notification that by stopping by Your Dealership they will receive a free tank of gas. As a driver, would that grab your attention?
How many other companies would be interested in advertising this way? Auto parts stores (special on batteries)? Car washes? Restaurants? It doesn’t have to be a free tank of gas – it could simply be $.25 / gal subsidized by the advertiser.
The point is, much like Facebook, these refuelers control the relationship with their users and are in a position to monetize their audience.
Time
When viewed through the lens of Job-To-Be-Done (JTBD), what are users actually hiring mobile refuelers for? Its not to delivery fuel, but to deliver minutes back into their lives. As Scott Galloway has stated, “Any company that creates more than $10 billion in shareholder value does one of two things: extend time (more time, saving time) or enhance time.” Refuelers extend time. If you are willing to pay, these companies will sell you time.
In a previous article I did a little math…
“Consider this: the average hourly earnings for employees in the US for May 2017 was $26.22, according to the Bureau of Labor and Statistics. Using that number we come up with a minute figure of $.43. Now, it doesn’t take long for those minutes to add up and equal dollars.”
Convenience
Amazon has become the “everything store”, and it has succeeded because it established trust among their customers and made it easy to buy more products from them.
How hard would it be to offer insurance through a mobile refueling app? Imagine a GEICO-esque popup… “Want to save 15% on your car insurance? Would you like to talk to one of our representatives?” If a user purchases auto insurance, the home and life insurance are just a step away.
Perks
Need employees to stay late or come in over the weekend? How about offering to top off their tanks as a thank you? “Tank You” Sorry, I couldn’t resist.
Selling parking passes along with season tickets for football games? Why not add in “free fueling”?
Jobs
If you have a collection of customers with vehicles, that is a fleet. If you are able to direct those vehicles, you are a dispatcher. If you have a fleet and a dispatcher, then you have a logistics company.
Imagine as a user you see the following message pop up, “You just arrived at Phipps Plaza. Nordstrom has a delivery for a customer located in Buckhead, 2.4 miles away. Would you be available to make this delivery in the next 2 hours for a credit of $20?
In Uber-like fashion, these companies could offer their users opportunities to make money as couriers.
Security
Which brings me to my last point. If you have two-way transactions taking place on your platform – paying users for services (courier deliveries) and charging them for goods sold (fueling) – and you hold those funds in an “account”, then you are essentially a financial institution (think early Ebay / Paypal). And if people are willing to trust you with their money, you are selling security. FYI – As of Aug, 2019 Starbucks had around $1.6B in stored value in gift cards. That’s a nice interest free loan!