“In the late 1960s, Mobil, Humble, Sun, Texaco, and Cities Service began self-serve experiments. A reason behind the move to (capital-intensive) self-serve marketing by majors was the increasing cost of labor from the manpower drain of the Vietnam War and minimum wage and hour regulations.”
“More and more self-service bans were being challenged; five had been rescinded in 1968, and maverick dealers were converting to self-serve in illegal states to dare a court suit. By 1970, it was just a matter of time before motorists had the self-serve option coast to coast.”
In the 1950s, independent marketers of privately branded gasoline effectively competed against high quality, well advertised major brands by offering lower prices and maintaining high-volume, low-cost operations. It was the independent that popularized the tracksider, self-service, multi-bay pumps, and, now, premiums. Coin operated pumps, however, encountered unfavorable regulation. The next major innovation would be theirs too.
“Skid Stations”
Spawned by recessionary economic conditions in late 1957/early 1958, the skid-tank station was introduced that set a new standard in low-cost gasoline dispensing. “Not since the self-serves came out of California,” a trade journal reported, “has a station caused as much excitement as this recession-bred design.”
As one brand name, “Petromobile,” suggested, the skid station was a portable long-and-narrow operation consisting of two above-ground storage tanks with advertising painted on the outside of a prefabricated office unit. Restrooms and service bays were absent. An initial investment of under $10,000 allowed quick payouts, and the station could relocate unlike regular stations that became eye-sores once abandoned.
By mid-1960, over several hundred skid stations were in operation, mainly in the Southwest and Midwest. Encountering restrictive ordinances, modified versions of the skid stations placed the tanks underground.
Self-Service Lurking
Self-service was resilient. Despite legislative obstacles in 1930 and 1947–49 that stamped out large-scale introductions of self-service, one comeback was recorded in 1959/60 when some 14 stations sprang up between Dallas and Fort Worth. With cost economies more favorable than even the conventional full-serve skidtank station, these self-serves gave notice that only regulation stood in the way of a new sub-industry within gasoline marketing.
Self-service represented a potentially revolutionary form of gasoline marketing. Gasoline dispensing was not a specialized skill, and by performing the labor a motorist could save from 10 to 20 percent off regular gasoline prices. The threat of lost business was recognized by conventional stations, and dealer trade groups worked with local fire marshals and state legislatures to retard its development and growth. In 1930 (Part I), the success of self-service inspired an alliance between conventional dealers and the fire marshal to close down the novel stations. A burst of self-service entry during 1947–49 raised much controversy, and legislation and fire orders became commonplace. Many legislative and administrative battles remained before self-service could become an institution in gasoline marketing.
In the 1950s (Part II), self-serves cautiously grew on the fringes of the law. The only major incident occurred when the growth of coin-operated pumps in Wyoming led to a crackdown in 1959.
In 1960, a sizeable group of self-serves sprang up between Dallas and Fort Worth that generated wide publicity among marketers and gave clear signals that this was an economical form of gasoline retailing. [1] Other examples over the next several years would add further credence to the viability of self-service. Most encouraging was a 18 million gallon per year coin-operated chain in California, Wyoming, and New Mexico that, in the owner’s words, prospered from “absurdly low” costs in the “vending age.”
Other events in the early to mid-1960s gave self-service momentum despite legislative discouragement. Growth of self-serve/convenience stores ensured at least one niche for this mode of gasoline sales. Amoco’s experiment with self-service showed that even a major marketer respected its possibilities. In western states, coin operated pumps were “spreading like a prairie fire” where legally allowed. But in order to sustain growth future, restrictions needed to be repealed or at least relaxed, which required a well-articulated counter-movement to educate the public that self-service was not a safety bomb waiting to explode. [2]
Big Oil Tries Self-Service
In late 1965, the API’s marketing division passed a resolution that “no restrictions be imposed on the use of coin-operated dispensing pumps except those essential to public safety.” An API representative also advised the National Fire Protection Association to sanction “coin-operated, card-operated, and remote preset” pumps. If nothing else, the API’s support brightened the prospects for self-service in the U.S.; in Europe, where bans were less prevalent, existing and planned self-service stations numbered in the thousands.
In 1966, over 1,000 self-serve pumps were reported in 20 states. Independent marketers in diverse states such as California, Kansas, New York, and Virginia planned many more. The next major development was “the first systematic, broad, thoughtful, substantial, and determined test of self-service in the United States.” Amoco, which several years before opened a lone coin-op, offered self-service in a variety of settings in the thriving Tucson, Arizona self-serve market to verify its safety and profitability. With both full service and remote preset self-service, these outlets would define the service station of the 1970s and 1980s. [3] A sampling of opinion on Amoco’s full-scale entrance into what had been exclusively the independents domain was revealing.
Said one major-company executive:
I can’t begin to tell you all the reasons it’s terrible . . . for a major company to be promoting self-service. . . . They should stop and think. This could cause tremendous damage.
Echoed another major-company marketer:
This is no doubt a revolution in oil marketing. . . . Not only will dealers get burned, but oil companies will. It will be ruinous because it will force the industry to liquidate so many high-priced properties.
An independent marketer revealed the reason behind the “don’t rock the boat” mentality.
Nobody I’ve talked to thinks what American is trying is a good idea, but I can’t honestly say how significant that is. Have you ever heard of a marketer who didn’t think what he was doing was right, and what the other guy was doing was wrong?
One major, however, gave Amoco the ultimate compliment: imitation. Phillips Petroleum opened five self-serves in Tucson offering the same 2 cent per gallon discount under the full-serve price. As elsewhere, majors began to challenge independents on their own turf.
The trend blossomed into nationwide reality. As the National Petroleum News reported, “marketers of all sizes and strengths, municipal and state authorities, and even API, are acting and reacting to developments in self-service operations.” In the late 1960s, Mobil, Humble, Sun, Texaco, and Cities Service began self-serve experiments. A reason behind the move to capital-intensive marketing by majors was the increasing cost of labor from the manpower drain of the Vietnam War and minimum wage and hour regulations. [4]
As of 1969, leading states with self-serve stations were Colorado (350), Texas (325), California (180), Arizona (150), Utah (105), Idaho (104), Oklahoma (100), New Mexico and Missouri (75), Louisiana (60), North Carolina (50), Montana (44), Wyoming (43), and Kentucky (40). In many states, local bans prevented the number from being higher. Seventeen states still banned self-service altogether: Oregon, North Dakota, Minnesota, Iowa, Kansas, Illinois, Indiana, Ohio, Michigan, Pennsylvania, New Jersey, Vermont, Maine, Tennessee, Georgia, Florida, and Hawaii.
More and more of these bans were being challenged – five had been rescinded in 1968 – and maverick dealers were converting to self-serve in illegal states to dare a court suit. By 1970, it was just a matter of time before motorists had the self-serve option coast to coast.
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[1] Fourteen self serves operated within a four-mile stretch of highway.
[2] In fact, no major self-serve accidents had happened, and no major accidents would happen. The major problem would be vandalism, not safety. See NPN, May 1968, p. 67.
[3] The same article (ibid.), added: If self-choice someday comes to dominate the gasoline business as it now does the grocery business, historians may look back on an experiment by American Oil in Tucson, Arizona in 1967 as the turning point.”
[4] Effective September 5, 1961, a federal minimum wage law became effective for an estimated 86,000 service station employees with annual sales over $250,000 (Public Law 87-30, 78 Stat. 65). Automatic escalations over the next several years increased the cost-burden. NPN, June 1961, p. 84. Jobbers also were placed under the 1961 revisions to the 1938 Fair Labor Standards Act.
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Source: Robert Bradley, Jr., Oil, Gas, and Government: The U.S. Experience (1996), pp. 1481–85.
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