The New Corporate Perk: Gassing Up at Work

By Christopher M. Matthews Features Dow Jones Newswires

What if instead of driving to a gas station, the gas station drove to you?

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There's an app for that -- several -- as startups with names like Booster Fuels, WeFuel, Filld and InstaFuel compete to deliver gasoline to customers, what one calls an "unstationed" business model.

The mobile fuel services, which typically charge a little more than a gas station for the convenience, are catching on with some consumers, particularly in Silicon Valley, where companies including eBay Inc., Facebook Inc. and Oracle Corp. have hosted providers on their campuses as the latest corporate perk.

The concept has also intrigued Royal Dutch Shell PLC, which this spring began testing a fuel-delivery service in the Netherlands. Using an app the company designed in-house, customers can request that Shell come refill their cars while they shop, eat or sleep.

But the startups face regulatory scrutiny from fire chiefs and others as they seek to take gasoline directly to more workplaces and homes.

Tonmoy Ghosh, a problem manager at eBay, is an early adopter of fueling up at work. Mr. Ghosh, 34 years old, who works at one of the company's San Jose campuses and commutes 20 minutes each way, uses Booster Fuels to fill up his car while it's parked in the company lot.

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For Mr. Ghosh, cutting a 15-minute trip to the gas station out of a 14-hour workday is enough to ignore his East Coast relatives' claims he's just being lazy. After parking at work, Mr. Ghosh uses his phone's GPS to mark his car, schedules a delivery time and pays for the fuel, all through Booster's app. He leaves the top to his fuel tank open and departs work with a full tank.

"I live and work in Silicon Valley. If there's an app to deliver something we're usually the first ones to jump on it," he said.

Booster Fuels founder and chief executive Frank Mycroft said by cutting the overhead of a traditional gas station and buying fuel directly from refiners, he can turn a profit in a business known for weak margins. He sees his market as younger, tech-savvy consumers who place a premium on convenience, but concedes the model may not appeal to everyone.

"Some people are still going to want to go to the gas station and shop and buy other stuff," Mr. Mycroft said. "I wouldn't go so far as to say we'd disrupt retail gasoline as Uber has to the taxi market."

Booster joined with eBay this spring, gaining access to the company's San Jose campuses. It has agreements with more than 300 other employers to supply gas from its custom fuel trucks, which it is attempting to patent.

"eBay invests in services that best support our employees and make eBay a great, innovative place to work," spokeswoman Penny Bruce said in an email.

Booster Fuel delivers only to cars parked at places such as workplaces, malls and college campuses because of some regulatory uncertainty about delivering to neighborhoods. Filld and some others will do residential deliveries. Most services won't deliver to garages.

Though the companies remain small, they hope to grab a bigger bite of the retail gasoline market, estimated at more than $300 billion in the U.S. alone, according to the U.S. Energy Information Administration.

Despite long-term questions about demand for U.S. gasoline due to fuel efficiency and electric vehicles, gasoline deliveries rose to a record high in August of 9.77 million barrels a day, according to the EIA.

Still, retailers have averaged gross margins of just 7% at the pump over the past five years, according to the Association for Convenience and Fuel Retailing, due to high overheard and supply-chain costs. Many earn profits on other goods sold.

Mobile retailers hope to make more due to the convenience factor, but regulatory questions hover over the industry. In the U.S., companies' delivery trucks must be inspected and permitted by the Transportation Department and state authorities inspect pumps. Companies must also receive permits from fire departments for local deliveries and have run into some hurdles.

Santa Clara, Calif., Fire Chief William Kelly said his department initially barred Booster Fuels from deliveries. After meeting with the company, it gave it a permit in October.

"In limited application, it's safe enough," he said.

Filld Chief Executive Michael Buhr said his company meets with local fire chiefs at least two months before it enters a market to brief them on safety precautions. Filld operates in Seattle, San Francisco and Vancouver, and unlike Booster will deliver to drivers at their homes or elsewhere for a small fee.

The company also partners with car rental and sharing companies, including Enterprise Rent-A-Car Co. and Daimler AG's car-sharing service, Car2Go.

Mr. Buhr said Filld hopes eventually to provide mobile battery charging for electric vehicles. It is also working on a pilot program in which newer vehicles, which are increasingly web-connected, will be able to request a fill-up on their own.

Drivers would enter one-time preferences about when Filld could refuel their car, and "you'd magically get your gas filled," he said.

(END) Dow Jones Newswires

November 29, 2017 05:44 ET (10:44 GMT)