One On-Demand Fueling Service's Drive to Expand

How Yoshi is capitalizing on an investment from Big Oil

Newspapers, meal kits and razors: If a subscription model works for these items, why not gasoline?

That’s the bet—and vision—of Yoshi, an on-demand fueling company that has been on a serious growth streak in 2018.

The San Francisco-based company was founded in 2015, initially operating in Silicon Valley and, soon after, Nashville. That second market—far from its first client base of wealthy software execs—was a true test of the concept.

“We wanted to build out our operating model, business model and the messaging in at least two places,” says Nick Alexander, co-founder and CEO of Yoshi Inc. “We wanted to prove that even if things worked in Silicon Valley, did it necessarily mean this model and business would work everywhere else?”

The answer to that question was a resounding “yes.” Yoshi proved so successful that it attracted the attention of ExxonMobil. The oil company not only partnered with Yoshi, but it also contributed toward $13.7 million in Series A funding, along with General Motors (GM) and other investors.

Making the Investment

ExxonMobil declined an interview request for this story, but in a statement it cited the potential of Yoshi’s delivery model to expand the major oil’s customer base.

“The on-demand economy is changing nearly every aspect of our everyday lives, including consumer expectations about the way fuels and lubricants are purchased, delivered and used,” said Adam Wariner, manager of fuels and lubricants innovation for Irving, Texas-based ExxonMobil. “We believe the simplicity and convenience of this direct-to-vehicle care service will attract new customers to Exxon- and Mobil-branded products.”

As part of the partnership, Yoshi provides ExxonMobil’s Exxon or Mobil regular or Supreme Plus Synergy-branded gasoline and Mobil 1 and Mobil Super lubricants. (Yoshi is also developing an offer that can be integrated into connected vehicles through commerce platforms such as GM’s Marketplace.)

“They were very up to speed on all the players, the industry,” Alexander says of ExxonMobil, which is not alone among oil companies in testing direct-to-consumer fuel delivery. Shell is piloting its own service, Shell TapUp, in the Netherlands (CSP—Sept. ’17).

Why, though, out of all the on-demand fueling startups—including Filld, Booster Fuels, Purple and Gas Ninjas, to name a few—did ExxonMobil choose Yoshi?

“We’re a little bit of a different model than anyone else out there,” Alexander says. “It’s a subscription service. It’s set it and forget it.”

For $20 per month, customers can get a membership to Yoshi and receive weekly deliveries of gasoline without paying the a la carte $7 delivery fee. They also get free tire checks and fill-ups, and the ability to earn points toward future gasoline purchases and vehicle services such as car washes and detailing, wiper-blade replacement and oil changes.

That Series A funding is fueling Yoshi’s biggest expansion to date: By the end of 2018, it aims to be in 25 markets. The first new markets were announced in February within a couple of weeks of each other: Chicago; Minneapolis and St. Paul, Minn.; Tampa, Fla.; Cleveland; and St. Louis. Including these markets, Yoshi will operate in 10 U.S. cities, including the San Francisco Bay Area and Los Angeles, Atlanta, Nashville and Austin, Texas.

Each eco-friendly car wash from Yoshi uses the equivalent of 2 cups of water, the company says.

Fueling Growth

Who’s the typical Yoshi customer? Anyone and everyone.

They include a heavy commuter who fuels up with Yoshi five days a week, a 90-something who texts his orders on an old-school cellphone, and even an electric-vehicle (EV) driver who likes the convenience of a car wash and tire check (even though chargeups are not yet available).

Most of Yoshi’s clientele get their vehicles fueled up at work, during the day. “Big office parks—that’s our bread and butter,” Alexander says. Some employers pay for Yoshi’s membership fee as a perk for employees, who simply pay for the cost of gas (priced at the local AAA average for gasoline). Others promote the service and let their folks know it’s available as an option.

There is some variation in why customers use Yoshi, based on their market. In Silicon Valley, convenience is the leading driver, according to customer surveys. In Atlanta, safety is a top priority. And for some customers, price is the main driver.

“Depending on where your office park is, a lot of times the gas station around the corner is way above AAA average,” Alexander says. “We’ll see in different pockets, for a lot of people, it’s cost savings: Yoshi’s price per gallon is significantly less than what they’re comparing it to.”

With 10 markets down and 15 more to go, Yoshi is not even halfway toward its goal for the year. But Alexander is confident in its chances.

“Here’s the model we have, it’s working, people love it, [and] there’s appeal that’s very geographically diverse,” he says. “We want to make 2018 the year that we expand it to a lot more cities.”

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