Starting a business is always a gamble. Sometimes it pays off and sometimes it doesn’t. When we came up with the idea of renting out classic arcade games by the month, we knew that getting them to and from our customer’s locations would be a pretty large component of our costs. With gas prices continue their steady climb to $5 per gallon, we’re fortunate in that we’ve been insulated from these increases by an early bet on natural gas. We think that there are a lot of benefits to adopting the technology and while we don’t know whether or not there’s enough demand for it to go mainstream, this particular gamble has paid off for us.
There are really three key benefits to natural gas technology. The first is that it’s a very green friendly technology. I don’t want to go too environmental with this post, but we think that everyone has a certain responsibility to help protect the environment. Every time we rescue a game or old CRT from the dump, it feels good to know that someone will get to use it a bit longer before it ends up being recycled. I’d be willing to bet that we spend more on used parts then we do on new materials. When CNG powers an engine the exhaust is basically water. It’s fun when we go to get smog checked because the techs always say that it’s the cleanest reading that they’ve ever seen. The lack of soot also benefits our truck in that it provides less wear and tear on our engine and will ultimately allow us to go a lot farther then we could on a diesel or gas.
The second major benefit to natural gas is the carpool lane Because the state of California wants to encourage drivers to reduce pollution they’ll allow you to drive in the carpool lane solo as an incentive. If you have a long daily commute, this alone is reason enough to consider a CNG vehicle. Not every vehicle qualifies, but with as much driving as we do, it saves a lot of time on the road and allows us to fix games instead.
Of course the biggest benefit is the cost involved. We get about 14.5 miles to the gallon in our truck. Not great, but not so bad for a work horse either. According to GasBuddy.com, the average price of fuel in Antioch runs about $4.00. Currently we’re paying $2.59 per gallon for CNG at the local station in Concord. This means that we would have to get 23 MPG with a regular gas vehicle before we’d be better off paying for regular gas. With a liftgate and a couple of arcades in the back, we think this would be a hard number to hit. If you compare the $2.05 that we pay in Ripon, it boosts our MPG (miles per gasoline gallon) to over 28 MPG.
This isn’t to say that CNG doesn’t have it’s downsides. The first CNG vehicle that we bought had been converted from gasoline to CNG. This made it very unique. Ultimately when the computer unit inside the van died, the entire car was worthless over the failure of a silly microchip that you can’t find. Even finding a mechanic to work on CNG can be a challenge. There’s only a handful of them that are qualified to work on them and the only one we actually trust to work on ours is in Fresno (6 hours of driving) There’s also the issue of finding gas stations that support CNG. We had to spend one night sleeping in the freezing cold, at the airport in Lake Tahoe because their pumps froze up and they couldn’t get a technician to service them. Another time we missed a TV interview because the pumps were down and we didn’t have enough fuel to get to another station. There was also the time that we had to pass up a $50 Stargate game in Paradise California because it was 10 miles too far from the last CNG station. In order for CNG to have a robust future, they need to expand the network of fueling stations beyond Los Angeles and the Bay Area and into something more national. Every time I see the suggestion box at Costco, I always tell them that they should add CNG refill stations. The adoption by a national chain would do more to propel the technology forward than any incentives that the government gives for carpooling or to keep the prices low.
Overall the pros outweigh the cons and while higher gas prices could ultimately put pressure on our margins, we think that we can maintain our low price point for our arcade rentals for a very long time, thanks in part to the savings that we get from CNG.