Selling Gasoline by the Minute
Oil companies’ formula for selling gasoline lately comes down to two words: faster fill-ups.
First came electronic payments at the pump. Then Mobil Corp. shaved off seconds with Speedpass, a 3-year-old program that allows consumers to buy gas with a swipe of a device that attaches to their key chains. Now Shell Oil Co. is advertising its “three-minute fill-up” plan.
Several companies are gambling that consumers will pay an extra buck or two per tank to get the fastest, most high-tech gas service this side of a NASCAR pit stop.
They are testing robots that provide two-minute drive-thru fill-ups, leaving drivers safely ensconced in air-conditioned comfort, hands free to make cell phone calls, discipline unruly children and multi-task to their hearts’ content.
Skeptics may find the dash to break fill-up speed limits absurd, but technology watchers call the gas station equivalent of automated teller machines a natural. Ultimately, speed sells: Mobil has enrolled 2.7 million people in Speedpass and estimates that the program’s convenience prompts customers to pay its stations an extra visit each month.
“We have mass societal attention-deficit disorder,” said Jon P. Goodman, executive director of EC2, a high-tech business incubator at USC. “On one level, it’s really funny, but on another, it’s inevitable--the gadgets, the gizmos, the whiz-bang consumer products are all part of our enchantment with technology.”
Tapping into technology’s magic isn’t cheap. Shell is spending more than $10 million to create the SmartPump, a gizmo suspended like an upside-down periscope from gas-station canopies. Using a tiny camera, the SmartPump communicates with a transponder mounted on the customer’s car to locate the gas tank. Then it descends, extends its mechanical arm, docks with a specially designed fuel cap and gives a two-minute fill-up.
Shell’s main competition in the robotic arms race is Autofill Inc., a Jacksonville, Fla., subsidiary of a Swedish company whose drive-through fill-up technology is being tested by BP Amoco and Mobil.
H.R. Textron Inc., the Valencia-based company that provided the robotics for Disneyland’s Pirates of the Caribbean, is Shell’s manufacturer. It expects to roll out 50 SmartPumps by mid-2000. Some may be headed for Southland stations, where H.R. Textron executives expect them to get a warm reception.
“Southern Californians don’t like getting out of their cars for anything,” said Phil Lane, the company’s senior manager of robotics.
Five prototypes are in use at Shell stations right now, one in Sacramento and four in Indianapolis.
About 3,000 drivers have tried Sacramento’s SmartPump since early 1997. At first they were nervous about scratches, dents or spilled gas, said Shell project manager Kevin Autin. But after watching SmartPump home in, use vacuum suction to open the outside fuel door and swiftly dispense gas, they had only one request: Make it go even faster.
“People are so busy these days, they wouldn’t stop for fill-ups at all if they didn’t have to,” said Claes Holm, president of Autofill, which employs near-identical technology except that its device sits alongside the car rather than above. Oil companies in Germany, Norway and Sweden already use Autofill at their stations, and the Swedish-born Holm thinks it will be even more successful in America.
“The U.S. is all about drive-thru,” he said.
Shell’s marketing surveys show the automatic-fill-up concept scores big with seniors and the disabled, as well as with women who are traveling with children or are concerned about leaving their cars at night.
The California Air Resources Board still needs to certify that robotic pumps’ emission levels meet state regulations. But Shell and Autofill say their mechanized gas attendants will solve environmental problems that have plagued manual pumps.
“Our testing shows we’re nearly twice as good as conventional pumps at capturing vapor,” Textron’s Lane said. SmartPump and Autofill also prevent gas from dripping onto the ground afterward.
Costs--and how to recoup them--remain the biggest hurdle to automated gas stations. Autofill units cost about $50,000 apiece, although the company hopes to lower that to $25,000 once the machines are being mass-produced. Textron said its prototype in Sacramento cost $250,000, but it expects the price of a unit to drop to about $75,000 once it begins production.
Shell has contemplated everything from gas surcharges to annual subscriber fees to bank-style transaction fees to recover its capital outlay. But some station operators doubt consumers--who respond angrily when gas prices rise even a few cents per gallon--will pay more for the convenience of automatic fill-ups.
Station operators also worry that so-called ghost stations, where customers don’t have to leave their cars, could devastate their convenience store business.
“With pay-at-the-pump already as quick and easy as it is, we don’t think the benefits will justify the costs,” said Jim Daskal, general counsel for the National Coalition of Petroleum Retailers, a trade group for gas station operators.
Other high-tech programs to improve station service have produced mixed results.
Customers loved Amoco’s self-cleaning restrooms, tested briefly in 1993. But the his-and-her units, which worked somewhat like giant dishwashers, cost $80,000 each, and too few drivers changed their gas-buying habits to cover the expense.
Mobil executives will not say whether the extra patronage from Speedpass offsets the cost of the device, which users get for free, or of installing the technology to read the electronic signal it emits. The signal activates the gas pump and electronically bills the purchase to the driver’s credit card account. Shell has a similar device, called EasyPay, that it rolled out in select markets in 1997.
“We don’t talk about the costs,” Mobil spokeswoman Susan Carter said. “It’s about increasing customer loyalty.”
Even though no one is certain there will be a market for drive-thru fill-ups, the competition has grown fierce between Shell and Autofill to grab hold of the lead in providing automated technology.
In five years or less, whoever establishes their machine as state-of-the-art could be supplying more than 22,000 U.S. gas stations with a dozen or more robots apiece, Autin said.
“The value of being first is enormous,” he said. “My goal is to make SmartPump the [leading] brand, like Xerox or FedEx.”
