Thursday, May 5, 2016

Gas Delivery Startups Want to Change the World – But Will They Blow It Up First?

It is hard to imagine a less hospitable niche for a startup to enter than gasoline – a combustible commodity that is (one hopes) being innovated into obsolescence.

And yet, over the past 18 months, at least six startups have launched some variation on the theme of “Uber for gas” – your car’s tank gets refilled while it is parked somewhere.

The gas delivery startup founders all share similar stories of discovering the wannabe entrepreneur’s holy grail: a point of friction that can be translated into an app.

“David, one of the co-founders, basically said, ‘I hate going to the gas station’,” said Nick Alexander, the other co-founder of Yoshi, of their company’s origins. “I think he had run out of gas recently, so he said, ‘What about an idea where someone comes and fills your car up?’”

For Ale Donzis, co-founder of WeFuel, the moment came when he was trying to get gas in the middle of winter in upstate New York and realized he had forgotten his gloves. For Frank Mycroft, founder and CEO of Booster Fuels, it was during his wife’s pregnancy when he started refueling her car as well as his own.

“It wore on me,” Mycroft said. “I didn’t like doing it.”

The tales of gas station woe are the kind of first-world problems that have inspired a thousand parodies of startup culture. (A customer testimonial on the website of Purple, another gas delivery service, reads: “I live across the street from a gas station, but I don’t always have time to make the stop.”)

But delivering large quantities of a toxic and flammable liquid is significantly more complicated – and regulated – than delivering sandwiches. The companies generally source their gasoline from the same distributors that supply 10,000-gallon tankers to retail gas stations. But the app companies put the fuel into the back of pickup trucks or specially designed mini-tankers. Booster Fuels only services cars in open air, corporate parking lots on private property, but other companies offer to refill your car wherever it’s parked.

And while ignoring outdated regulations is practically a virtue in this age of disruptive innovation, there are good reasons for the careful control of gasoline.

“Some of the [companies] are using 1,000-gallon tanks,” warned Greg Andersen, division chief of the California office of the state fire marshall. “If they’re going into the basement parking lot of a high rise, that actually is a large concern.”

Several of the startups treat their regulatory compliance as a selling point.

“You’re supposed to have a fire extinguisher,” said Chris Aubuchon, co-founder of Filld. “We have two.”

Yoshi’s Alexander said, “We’re using DOT-certified equipment. … We’ve had our trucks inspected by multiple parties, including the highway patrol.”

But it’s not clear that Filld and Yoshi actually are in compliance with the law.

by Julia Carrie Wong, The Guardian |  Read more:
Image: Stephan Savoia/AP