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Kristin Eberhard’s Blog

A new transportation option

Kristin Eberhard

Posted April 6, 2013

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Right now, you really only have two levels of transportation options: high cost, high flexibility, high comfort, high pollution OR low cost, low flexibility, low comfort, low pollution. Various companies have been trying to fill in the middle of the spectrum with a medium cost, medium flexibility option, but none has really put the whole picture together. Now, the Las Vegas Downtown Project and Zappos Founder Tony Hsieh are planning to do just that with Project 100.

More about your options:

High Cost, High Flexibility, High Comfort, High Pollution

This means owning your own car. Between purchase, insurance, gas, maintenance, and parking this costs you approximately $10,000 per year. That’s a lot of money. Indeed, in Southern California, the average person spends nearly one quarter - 25%! - of their take-home income on transportation (mostly owning, operating, and parking a car). In return for that nice chunk of change, you get your own private vehicle parked at your door, ready to take you anywhere you want at any moment. Which is, let’s face it, pretty amazing. However, it is also very polluting both for greenhouse gases that are destabilizing our climate and causing destruction like Superstorm Sandy, and in terms of local air pollutants that cause asthma and death. (You could reduce the pollution part of this option by getting an electric vehicle.)

Low Cost, Low Flexibility, Low Comfort, Low Pollution

This means riding the bus or your bike exclusively. The bus is cheap: only $1,000 per year for unlimited rides on bus or metro in Los Angeles. Even though (contrary to popular belief) LA actually has pretty good transit service, it is still generally uncomfortable and inflexible. It takes about 3 times as long to get somewhere compared to driving your car, and it involves a lot of standing around at bus stops, or standing on a crowded bus, and trying to figure out how to get from here to there.

Owning and operating a bike is cheap - only about $300 per year. Riding your bike exclusively gives you more flexibility than any other option for short trips, and it is a great way to get outside and get exercise if you have a nice bike path. But there are still very few places that you can actually get to on a nice bike path, meaning you have to brave nasty traffic conditions for part or all of your trip, which is uncomfortable for most of us. And unless you are really hard core, you have a pretty limited range. For most people, about 3 miles.

The (new) Middle Ground

There’s a lot of room between $1,000 per year and $10,000 per year. Why not an option that costs around $5,000 per year and gives you more flexibility and comfort than a pure bus or pure bike experience? Van pools, carpools, and ride services have been trying to make inroads on this middle ground, but the tricky part is that no single service alone can provide it. It has to be a basket of options; an ecosystem of transportation services, if you will. It has to allow you to “right-size” your transportation to your particular need. Instead of driving 2 tons of metal, an internal combustion engine, and 4 empty seats around with you everywhere you go, you need just your seat and an efficient electric drive for most trips. For the few times a year that you actually take the family camping, you need access to a 4WD and a lot of trunk space. But you don’t need to pay to have that sit in your garage the other 360 days a year.

Screen Shot 2013-04-06 at 2.30.54 PM.pngUsing a bundle of options to match your transportation needs, rather than using a single option - your personal (expensive) car - for every trip.

This is the middle cost option, but it has the potential to actually be the highest flexibility options since you can shed some of the inconvenient aspects of car ownership like parking it and and maintaining it.

In addition to having the right options available, they have to have low transaction costs to use. If you have to sign up for 5 different services, with different apps and different payment methods, and open each app one at a time every time you want to go somewhere until you figure out which one is the right fit, it quickly becomes worth it to just pay the extra money and get in your own car and go.

Project 100 plans to put together this whole ecosystem under one program umbrella with a single subscription fee and a single app to give you what you need when you need it. They just made a big splash by buying 100 Tesla Model S, but they are also going to have bikes, small electric vehicles, other cars, as well as shuttle vans and private drivers. They haven't worked out the price model yet, but are aiming for around $5,000 per year.

Would you like to have the option to take a shuttle, a driver, drive a Tesla or a small electric vehicle or a bike as appropriate for your trip, and in return get $5,000 back in your pocket to spend on other things? Sounds like a pretty sweet deal to me. Hopefully Project 100 can pave the way for other cities to move into the 21st century of transportation.

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