Are Gas Stations as We Know Them a Dying Business?
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The world is changing at an accelerated pace, and the automotive world is no different. Gas stations, a constant symbol of our automotive, oil-fueled existence for the past century, have been slowly disappearing.
One might think that car ownership is on a steady incline, and therefore gas stations should be more common. However, studies suggest that car ownership is actually going the opposite direction.
With the rising costs of owning and operating a vehicle, the low profits raked in by gas stations, and the growing trend towards electric and hybrid automobiles, the humble gas station may be on its way out.
Gas stations have been an American staple for years, but how much longer will they survive?
Gas stations on the decline?
Although consumers are driving more and more miles, and spending an increasing amount of their budget on gasoline, there has been a continuing disappearance of gas stations for several decades.
According to The Hustle, gas stations around the US have dropped from around 195,000 in 1995 to 115,000 in 2020.
There are a few key contributing factors, including natural gas prices dropping, making it a more popular alternative, and prime real estate in urban areas being converted into more profitable infrastructure, such as condo buildings.
As a business, gas stations also just aren’t that profitable.
Gas stations a tough business
Most gas stations are operated by individual owners or franchisees who pay bigger oil companies royalties to use their branding. After the cost of overhead, gas station owners make very little profit from their gas sales.
Gas stations are also competing not only with each other for business, but new and emerging trends. As hybrid and electric cars are seen more frequently on the road, drivers are moving away from the traditional gas-powered motors for their transportation.
The cost of gas, car insurance, maintenance and repairs continues to rise, and many drivers are finding the hybrid or electric car option not only more affordable, but more appealing.
From gas station to charging station
Many drivers are reporting they would or are considering buying an electric vehicle (EV) for their next car, and EV charging stations have been popping up all over urban areas to serve them.
Although EVs make up less than one percent of the cars on the road now, gas stations have been following the lead and getting with the times.
Gas stations have been installing expensive EV charging stations right alongside the gas pumps. An expensive addition for most at $100,000 a charging station, but worth it in the long run to keep the business alive.
With the projected sales of EVs climbing, it makes sense for gas stations to evolve into the future.