HOUSTON — A year after Shell debuted Shell TapUp mobile fueling in the United States, the oil company is set to introduce the service to three new markets and prove its mass-market potential.
Shell began piloting Shell TapUp in 2017 in the Netherlands. In 2019, it launched its U.S. test in Houston and later Seattle, serving both business-to-business (B2B) clients such as fleets and business-to-consumer (B2C) clients, such as employees parked in corporate campuses and office parks.
“This whole vision is for Shell TapUp … to accelerate the energy transition by creating mobile infrastructure for energy,” said Daniel Arbour, general manager for Shell TapUp Americas, Houston, in an interview with CSP Fuels.
“In Shell retail, we strive every day to make 'life’s journeys better' for our customers," Arbour said. "Here at Shell TapUp, we say making 'Life’s journeys better, before they begin.’ It’s one of our many vehicles to accelerating the energy transition for Shell.”
Arbour declined to share how many clients Shell TapUp serves, although he said it is signing up new consumer customers daily and new B2B clients at a weekly pace. One B2B client is Hennessey Performance Engineering, a Sealy, Texas-based business that provides modifications of sports cars, muscle cars, trucks and SUVs.
Shell TapUp has a lot of competition in the mobile fueling space from startups and services with fuel industry connections. They include Booster Fuels, San Mateo, Calif., which has financial backing from French oil company Total SA and has operations in California; Nashville; Washington, D.C.; Dallas and Austin, Texas; and recently Seattle. Filld, Mountain View, Calif., has received funding from Calgary, Alberta-based fuel marketer and c-store operator Parkland Fuel Corp. and serves consumers in Washington, D.C., and Vancouver, B.C., and fleets in D.C., Vancouver and Portland, Ore. And San Francisco-based Yoshi has financial backing from ExxonMobil and supplies Exxon and Mobil branded gasoline in 17 markets, including Houston, Dallas and Austin, Texas.
Arbour said Shell TapUp’s differentiator is its ability to sell Shell-branded fuels—including regular-grade, V-Power Nitro Plus premium grade and diesel—in trucks bearing the famous Shell pecten logo. This communicates the high level of operational, safety and quality standards that Shell has honed as a multinational energy company, Arbour said.
“When we speak to local officials and regulators, they’re always quite happy with the vehicles we are sending to [fuel customers],” Arbour said. “They’ve seen the others, and ours rank among the best in the mobile fueling space.” The mobile fueling industry, which has expanded into dozens of app-enabled services in only a matter of a few years, has faced scrutiny from local fire marshals for its ability to meet codes around storing and handling flammable liquids.
The Convenience Sell
Similar to other mobile fueling services, Shell TapUp customers schedule and pay for a fill-up from an app. Customers pay the average of fuel prices in their area, based on data from Oil Price Information Service (OPIS). B2C customers pay a delivery fee based on the scheduled delivery window: $2 for a delivery slated sometime between 8 a.m. and 4 p.m., or $4 for one requested within a tighter, four-hour window. B2C deliveries are limited to weekdays, but they can also include windshield, tire or car cleaning.
About 70% of Shell TapUp’s business comes from B2B clients, although the service is looking to grow the consumer side by making the convenience sell.
“We always tell them we’re giving back your most precious resource: time,” Arbour said. “Our service is certainly a convenience that can save time, and reduce mileage on the road. This of course parallels well to our business customers, who can save time and even money.”
Shell TapUp launched in Houston, where Shell’s U.S. headquarters are located. It then entered Seattle somewhat quietly, after a pilot with a B2B customer that has since ended. But the Seattle test proved successful enough to expand, in part thanks to the city’s proximity to Shell’s supply infrastructure on the West Coast. That business is overseen by a regional manager who manages a small fleet.
The Shell TapUp service is slated to launch into three new markets in 2020: two major markets and one “inland” market to pilot a new model, within the second-quarter time frame. While declining to share details, Arbour said Shell TapUp is looking where it has the “best capabilities for equity supply, customer demand and the ability to operate easily.”
“We’re really trying to push boundaries of growth here, and where we see it going is supporting that B2C, consumer-facing application,” he said. “What’s important for us is to be able to get our operations settled, ensure we have all the processes and that we’re scalable.”
Beyond expanding into new markets, Shell TapUp could also deliver new fuels. “We are energy agnostic,” Arbour said.
“Part of our vision is to deliver biofuels and new energies to jurisdictions and areas looking for alternative fueling services," he said. "Our mobile infrastructure can do that.”
And as Shell gets more active in the electric vehicle (EV) charging space—acquiring EV tech providers and launching its own charging network overseas—Shell TapUp could one day have applications in that sector as well.
Mass-Market Opportunity
Shell has even closer opportunities for expansion—namely, figuring out how Shell TapUp interfaces with its 14,000 branded retailers in the United States, and leveraging Shell’s Fuel Rewards loyalty program, which is currently not integrated into the Shell TapUp app.
“Where we don’t have a high density of Shell-branded sites in a market area, [Shell TapUp] can really extend the range of a retail station,” Arbour said. “We have had a lot of requests globally and in the U.S., wanting to assist us in this growth.” Those exact opportunities for branded retailers and wholesalers aren’t yet defined, but there is interest in figuring them out.
Shell could have invested in an existing mobile fueling service. At a time when the connection between mobile tech and brick-and-mortar retail is still being tested, this could have been a most reasonable approach. But Shell’s decision to brand its mobile fueling operations reflects a strategy of self-disruption and a desire to control the experience, and if anything provides a weighty endorsement of mobile fueling’s potential.
“You can have a lot of small, bespoke service providers, but with Shell’s size and scale, I believe it is a mass-market opportunity for us,” Arbour said, “and that is what we are looking to confirm.”
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