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By Bryan Grover
| January 17, 2017
Milk. Eggs. Pretzels. Gum. Mints. Oh, and fill ‘er up with regular.
With the rise of electric and hybrid cars, and a possible future filled with driverless cars, what’s in store for one of the most mundane, necessary habits we conduct every week: the humble, ubiquitous act of visiting the gas station? The industry’s evolution is already well underway, as more stations turn themselves into convenience stores that happen to sell gas, rather than gas stations that sell conveniences.
But will that be enough?
Jay Patel, owner of New World Gas, a New England-based gas and convenience retail franchise, says convenience stores and restaurants help keep the gas station industry afloat and profitable.
“You can only keep the price so low on gas,” Patel said, “but putting in a Dunkin’ Donuts or Honey Dew is always a big draw to get people to come for more than just gas.” Turning a profit now relies on giving a consumer something to do or purchase while their car is filling up.
A glimpse of the gas station of the future has popped up in Akron, Ohio, where a filling station is unmanned and has stations that let drivers refill with compressed natural gas or charge their electric cars. A mobile phone app called chargepoint lets Ohio drivers access the electric charging stations, while the natural gas side is entirely self-serve with credit card slots.
Adapt or die. In this age of technology, countless conventional objects and habits have become obsolete. VCRs were replaced by DVDs, and DVDs by streaming. Folding maps vanished with GPS devices. And when was the last time you actually answered your home telephone?
The gas station has had a long, healthy existence, so change was inevitable. After World War II, Americans took to the roads in droves, and this is when gas stations reached their peak—with over 236,000 gas stations dotting roads across the nation. Now, barely 100,000 remain, according to the Bureau of Labor Statistics.
The industry’s struggles can be blamed on many things, from increased competition to more regulations and a decrease in profit margins. Allowing people to pump their own gas and slip a credit card into the pump, rather than interact with an attendant, also removed any personal interaction from the transaction.
In many cases, land itself has become more valuable than the gas station that stands on it. As a result, stations have been forced to merge or shutter. Now owners like Patel survive not on profits from gasoline, which continue to decline, but with the stuff they sell inside by the cash register.
Advancing car technology has played a part in this decline. Every year, car manufacturers release new models that go farther on less gas—if they use gas at all. In 1990, the first widely available hybrid car hit the market and was followed, within two decades, with the first electric car, which instead of a pump needs a plug.
Electric car owners can recharge wherever they can find a station. It might be a mall parking lot, or at work, or their garage at home. Even college campuses, such as Salem State University, have begun to install charging stations for electric vehicles. Building owners can install these easily, freeing them from the typical burdens of gas station owners, like expensive underground tanks, late deliveries, and fluctuating crude oil prices.
But at least those cars need drivers.
Driverless cars seem to pose an entirely new threat to gas stations. While they aren’t approved yet for road use, tests, like the one in South Boston a few weeks ago, show they are coming. It’s not hard to imagine a fleet of automated, driverless taxis roving city streets trafficking people from one side to another before returning home to be refueled by an attendant, or plugged in and recharged.
There’s still time for the gas station industry. Electric cars only account for one-tenth of one percent of vehicles, according to Bloomberg. It will take until around 2020 to get more than one million of these cars on the road; meanwhile, a 2016 study estimated that charging stations will grow by more than 1 million globally each year through 2020. As for driverless cars, they have a long road ahead to regulatory approval.
And while the price of an electric car can be almost double that of their gas or hybrid counterparts, they may only travel 75 to 100 miles per charge. Plus, even with the fastest electric chargers, it takes about 30 minutes to charge a Nissan Leaf to 80 percent capacity.
John Paul from AAA Northeast predicts it will take five more years before the electric car is anything more than a luxury vehicle, but eventually that day will come.
“At the turn of the 20th century if you went to buy a car, it could be powered by diesel or gasoline,” Paul said. “In the near future, it could be a choice between diesel, gasoline, hybrid, and electric.”
A smart gas station owner should be ready to handle all of them.
“The gas station industry is a special kind of customer business,” Patel said. “It’s not just wait and see what the customer wants. You have to stay on top of the competition.”
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