This startup is bringing app-based discounts to gas stations

Gas station owners are always keeping an eye on the prices of the competitors around them. Upside has a way to bring the discount from the sign to the smartphone, and in turn keep customers returning.

At gas stations that are signed on, the D.C-based startup’s app offers cash back for drivers after they pump. Customers have to use a credit card to pay, take a picture of their receipt, and can cash out the money using PayPal.

Drivers who used the app since its launch have saved about $1 per pump on average, the company says. It’s currently available at 650 gas stations in the D.C. and Baltimore area. The startup’s internal numbers show $300,000 in cash back was distributed overall since launching last year, according to cofounder Wayne Lin.

Last week, the startup (which is different from the also-D.C.-based Upside Travel) began offering a way for the cash back to be donated to charity. #GasForGood offers an option to donate to Ayuda, Capital Area Food Bank, Chesapeake Climate Action Network, Operation Second Chance or The Child & Family Centers.

For gas station owners, Lin said the service is designed to serve the same function as a marketing campaign. It helps customers find the gas station, and may encourage a purchase inside. With gas stations tending to cluster, Upside also offers geographic exclusivity, according to its website.

The service can also provide data on what people spent and how much profit they made as a result of the investment.

“Every offer we give is personalized and guaranteed to be profitable to the merchant,” said Lin.

The app is free to download, and the startup makes money as a percentage of the incremental profit that the gas station.

“Only when they make more profit than they made today do we make money,” Lin said.

Screenshots of Upside’s #GasForGood. (Courtesy image)

The company currently has 13 employees, and is working out of WeWork on K Street. Its founding in 2015 is a sign of the potential for startups to sprout from past wins.

After working together in tech companies for a number of years, Lin and fellow cofounder Alex Kinnier decided to found a startup for the first time last year. They were influenced by a pair of past roles. As executives at Opower (which IPO’d in 2014 before being acquired by Oracle in 2016), they saw how consumers save money on everyday costs — in that case with utilities — and learned what motivated them. Before moving to D.C., they also previously worked on advertising tech at Google in Silicon Valley, where they saw how personalized marketing can help improve campaigns.

“We wanted to bring that specificity to small, local businesses who probably wouldn’t be able to build it themselves,” Lin said.

Even amid dire predictions about retail’s future, there are signs that startups see opportunity in products helping local merchants. Baltimore-based BlisPay is another example, albeit targeting a different kind of purchase. At Upside, Lin said the company sees the potential to move into other verticals in the future. The theme — from the area served through the nonprofits where customers can donate — will remain focused on locals.

The company raised seed funding (Lin declined to disclose the amount) from Silicon Valley firm Formation8, and also draws on the expertise of Google Chief Economist Hal Varian, Lin said.