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Comment by pdelbarba | Hacker News Reader

They're not paying the gas station price. They're likely paying bulk prices then just using the local prices as your price.

Edit: $3 for delivery generally and they're using F250 trucks. Call it 1.5t in the bed or about 400 gallons plus tank. They probably have a contract with the local bulk terminal so if you're paying 2.55, they might be paying 30% (no idea what this margin is) less or so. @400 us-gal if they make 30% on the gas plus $3 per 15gal tank, revenue would be in the $380/load range for an average of 26 tanks of gas per load.

Edit2: regarding the loss leader strategy, they still have to truck the gas to the station which adds overhead. By going direct to customer (again, assuming they're loading at the bulk terminal) they remove a couple middlemen who's position they then take.

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Gas is actually a loss leader at many/most gas stations. My parents owned a gas station about 10 years ago and one of the reasons they sold it and got out of that business was because competition was so fierce that they had to sell gas at or below the bulk price they paid for it. In other words, they effectively lost a few pennies every time someone bought gas. All profit came from in-store sales of other items.

Where in (presumably) the US was this?

The parent's story is essentially universal in the US and has been for decades.

Almost no convenience stores make money on gasoline, unless they're operating a special setup (the convenience store chain Sheetz for example has tried to build out their own gasoline business to cure this problem). There are a few routine exceptions, usually involving either some kind of rare location (eg right outside an airport exit, usually operating under a special arrangement), or a rare event (something that causes gasoline to be in unusual demand / limited supply).

When I did the books for a gas station in Canada it was similar. This was a franchise location as well, so they had the parent company buying gas for them.

Profit on gas was measured in cents per liter, with premium giving the best margins. And by best I mean $0.023/L or $0.087/gal.

"Bulk price" at a terminal and the true cost of delivering it to the station are going to differ.

>Gas is actually a loss leader...all profit came from in-store sales

That and the increasing prevalence of electric cars, Uber, and other shifts are why the gas-delivery model will likely be unsuccessful over any reasonable duration.

The idea seems to be moving in the opposite direction as the rest of the world.

Could anyone run the numbers on whether this model is profitable, or whether it's another "use VC money to acquire users" type deal?

EDIT: Looks like they pay anywhere from $18/hr to $22/hr for their delivery people: https://www.comeet.co/jobs/filld/42.00E

Also health, dental, and vision benefits + PTO, FSA, and free lunches. Wow.

Just did, check my comment above

There's a lot of speculation in your comment about things that are critical: The price they pay for gas and distribution costs.

Yea, based on the eia data it should all be ballpark but the calculation is there mostly just to serve as an example. You could shave a little off gas-per-fillup in retrospect because very few people will use 15gal exactly and few new car gas tanks are over 15gal but the $3 service charge balances that out somewhat. Based on the map on their site, it looks like their margins might be slimmer than what I calculated but they succeed by having a lot of customers in a very small area that they serve.

I don't think that "(no idea what the margin is)" is what OP meant by running the numbers.

Mostly a "pamper early adopters with VC money" operation I think, possibly with a profitability story (that may or may not turn out to be realistic) centered around high real estate value areas: in those places where the ground occupied by a gas pump and its accompanying infrastructure plays a significant role in the local fuel price, using public rights of way for mobile pumps is effectively a value transfer from the public to the pump operator.

Back during the original dotcom, when all anybody could think of was basically a mailorder shop with a website, I joked with friends how a "fuel.com" could be a great parody of contemporary startups and/or a fine participant in the hype wave.

I still think that sending pickup trucks to fill individual cars is stupid, but it's leaps and bounds less stupid than "mailorder fuel" would have been. A nice illustration of the difference between the current breed of VC money sinks and the dotcoms of old.

I don't disagree at all. My numbers should be in the ballpark but generous. If someone has more data sources they can link to, fire away.

I think the real takeaway here is that even at ~$400 per 25 cars refueled, it's not a super great market to be in. It's also kind of like starting a printing company during the 21st century (cough cough Vista Print). Yes, there's a sliver of margin to be had with aggressive automation and negotiation but at the end of the day, you'll be out of business in a couple decades when the underlying technology changes, in this case electric cars that can be charged at home.

On the other hand, it's likely that petrol stations will begin to close as electric cars become more and more widespread, but until literally no one uses petrol any more(and that will take a very long time) you can always make business by delivering fuel directly(Oh you have a 2010 vintage ICE car and the nearest operating petrol station is 50 miles away? we will bring fuel to you!)

30% doesn't sound crazy, based on this first-order-approximative data: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=E...

That ignores taxes which make up ~30% of retail price depending on the price of oil at the time.

Further, gas stations generally need to pay quite a bit to get gas shipped to them as it's heavy (12 gallons is over 75 pounds), dangerous, and often very far away.

So, cost at the refinery is very misleading.

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