California companies poised to revolutionize global transport

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It is looking less likely that a bullet train will run from Los Angeles to San Francisco, since a Sacramento County judge ruled that California High Speed Rail Authority cannot sell bonds to finance construction, having failed to clear financial and environmental hurdles. This is disappointing for Fresno, yet the plan never made business sense. Even the Rail Authority predicts a mediocre economic return. Public support has slipped as cost estimates have roughly doubled, and it is doubtful the train could undersell airfares of less than $100 between L.A. and San Francisco. But as the future of high speed rail dims, other California companies are at the cutting edge of a nascent transportation revolution.

Most well-known is Google’s driverless car. The technology works: Google driverless cars have racked up hundreds of thousands of miles of successful test drives. Legal obstacles remain: laws have hitherto required a human in the driver’s seat. But Nevada, Florida, California and Michigan have authorized tests. Google’s car currently costs $75,000, but costs will come down, and anyway, a direct cost comparison with existing cars misses the point. While your car sits in driveways and parking lots, a driverless taxi can be on the move serving many people. Commuters will get an extra half hour a day to read or chat on the phone. Kids can get their own rides to extra-curriculars, making life easier for soccer moms. Car ownership will become optional when smartphones can summon cheap driverless taxis anywhere, anytime. Urban parking space will be put to better uses.

Meanwhile Matternet, based in Moffett, is developing drones. One ton-mile of drone transport will cost around $40 (author’s calculations based on Matternet’s numbers) compared to a few dollars by plane, a few dimes by truck or a few cents by rail or water, but again, direct cost comparison misses the point. If you drive to Taco Bell to buy a taco, your costs have little to do with the weight of the taco. Drones will specialize in small deliveries: restaurant meals, library books, groceries, medicines. In the short run, their main advantage will be speed, since drones fly fast (over 100 mph). When drones are operational, Amazon hopes to deliver customer orders within half an hour.

But drones have another fascinating feature: infrastructure independence. Being small helicopters, they can go from Point A to Point B, without roads, rails or airports. Mountaintops and islands are beautiful places to live, but inconvenient, because cars, trucks and trains cannot supply them. Drones can. Matternet will serve markets from African villages without all-weather roads to cities where skyscrapers have distributed people three-dimensionally.

That brings me to Aeros, leading developer of another infrastructure-independent transport technology: giant cargo airships. Full disclosure: I worked for an airship startup in 2007, and came away believing that nothing was stopping the airship renaissance except the difficulty of pooling capital for projects that, by the nature of airship technology, cannot start small. Aeros has built a prototype and has a promising design for 60- and 250-ton airships. Unlike planes, airships use helium instead of fuel to stay in the air, so they can be far more fuel-efficient, and need neither airports nor runways. Airships can service remote mines, offer luxury cruises in Africa, import manufactures from China, bring fresh produce from Chile and live cattle from Montana, provide cheap passenger service to Europe and much more.

Unlike bullet trains, these new technologies require no big public-sector infrastructure investments. Driverless cars will use existing roads, while airships and drones should make civilization less reliant on roads of any kind. With luck, a new age of transportation without boondoggles may be dawning.

nathansmith
Nathan Smith, Ph.D., assistant professor of business administration/finance and economics at Fresno Pacific University, is author of Principles of a Free Society and The Verdict of Reason. He also blogs at openborders.info.
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