Friday, April 27, 2012

EPA Climate Change Report

The United States Environmental Protection Agency released its annual Greenhouse Gas Inventory, basically a compilation of all the data we have of all carbon emissions from all sources in the U.S. As we’ve discussed, Rideshare does not have the same impact on climate gases as it does on Local Pollutants, but as an environmentally responsible company we wanted to give a shout-out to the results anyway.

Power Plants continue to represent an ever larger share of total U.S. emissions, as high gas prices and tighter fuel efficiency regulations reduce U.S. emissions growth from the Transportation sector. Power plants now constitute 42% of all carbon emission in the United States, up from approximately 1/3 of emissions in the 2000 report. Transportation represents about 34%, about the same as a decade ago, although a smaller proportion than a few years ago. The other major sources are certain industrial production activities, including glass, cement, and steel production, as well as deforestation. Agriculture is also a major contributor to greenhouse gas emissions, both from deforestation and other land use pattern changes as well as the more intensive utilization of nitrates and other fertilizers to boost crop production per acre. Ironically, one of the things incentivizing farmers to use more climate changing nitrates is the high price of corn caused by the ethanol industry, which was originally supposed to reduce carbon emissions.

Friday, April 20, 2012

Airport Shuttles

Although most corporate commutes involve traveling from home to the office, a substantial portion of our customer base is asked to travel for work from time to time. As such, Rideshare is interested in establishing routes not only from residential areas to commercial areas, but also from residential areas to airports. In order to give our members some idea of the savings that would be possible in such a scenario, we’re going to spend a little time breaking down the numbers.

Anyone traveling to the airport who doesn’t have a friend or relative to drop them off will incur either two cab fares or a gasoline bill and a parking bill(if they drive themselves). Since parking costs are paid by day and cab fares are flat rate, obviously the more days you are gone the more sense it makes to take a cab instead of driving yourself. Conversely, the further away you live from the airport the less sense it makes to take a cab, since cabs charge per mile fares and your savings driving yourself over a cab go up the further away from the airport you live.

Whether you are commuting to the office or commuting to the airport to work in another city, Rideshare can help accommodate and help save the corporate commuter time and money.

Saturday, April 14, 2012

Atlanta Highway Comparison

With things getting closer to launch in Los Angeles I just thought we might talk a little bit about Rideshare’s plans for future growth outside of California. I also thought this might be a good time to take another systemic look at the whole issue of rush hour congestion and inefficient use of highway resources.

Atlanta is certainly a prime candidate for a service like ours. The December 10th, 2011 issue of The Economist weekly magazine ran an article detailing an upcoming vote in Atlanta on whether to spend an additional $6 billion building new highways, ramps, overhangs, and bridges to reduce congestion on highways. Atlanta could certainly use the extra capacity: its average rush hour commute is a staggering 127 minutes.

But there is still the question of whether this is the best way to add capacity. Just to reiterate, the proposed expansion will cost almost $6 billion, and it will have a substantial but less than revolutionary impact: only 800,000 people will see their commute cut to 45 minutes or less, roughly half the time of the current commute.

So how much would it cost Rideshare to achieve the same degree of savings?
It’s a little hard to convert minutes of commute into number of drivers, because of the synergistic effects we discussed earlier. Each additional driver you add to the highway slows down EVERY driver on the highway, which means still more drivers get added as people are on the highway longer, which adds still MORE drivers, and so on. Modeling this effect and writing a formula for it is very difficult.
Still, let’s take a crack at it. Remember that for a passenger on Rideshare’s service, one of the biggest benefits of the service is TIME. The passenger can spend the entire trip to and from the office working, sleeping, talking with family, streaming Netflix, or any other activity they desire. They are literally paying for time. Since time is the metric the article uses, let’s take that as our reference point.
Let’s assume a 1-1 driver passenger ratio. Cutting commuting times in half for 800,000 people is mathematically equivalent to eliminating “commute times”(i.e., time spent driving) for 400,000 people. A passenger in Rideshare’s service has essentially had their “commute time” cut to zero, since with modern laptops and smartphones they can work just as efficiently in the passenger seat of a car as they can in the office.

800,000 people using Rideshare’s service translates to taking 400,000 cars off the road and creating 400,000 time-enriched passengers, assuming a 1-1 driver-passenger ratio. Let’s assume right now that the people of Atlanta are making the same average commute as people in other cities, roughly 20 miles each way. Rideshare’s $0.55 per mile charge x 400,000 pairs = $44,000 per day. 250 commute-days per year translates into a yearly cost of $11 million.

The average service life of a road is somewhere between 30 and 100 years, according to the Department of Transportation. The wide range is due to the fact that in the United States many decrepit roads are left in service long after reaching the end of their useful life spans, which imposes other costs on drivers such as higher vehicle repair costs. Whether through maintenance costs on roads or vehicle repair costs on unmaintained roads, drivers pay for the roads. But never mind. Let’s be extremely conservative and give credit for the full 100 years to the road, AND let’s even assume NO maintenance or vehicle repair costs for that whole period(unlikely). $6 billion divided by 100 years STILL equals $60 million a year in current costs. That’s almost SIX TIMES Rideshare’s costs to achieve the same reductions.

The actual number is of course even higher. There WILL be maintenance costs, and vehicle repair costs, and we haven’t even counted Rideshare’s pollution, climate change, gas savings, parking savings, or other benefits yet. Atlanta, like every other major city in America, is prime real estate for Rideshare.

Wednesday, April 4, 2012

Buses, Vans, and Cabs Oh My!

Okay, so I know I take my artistic license a little far sometimes. So to make up for it, today my topic is going to be the law, which is about as far from art as you can get.

Your service sounds like it could be a winner, but is what you do… know… Do you have a license?

That was actually my dad talking, not a potential Rideshare customer as he lives out of state. And no, we don’t exactly have a license. But we don’t exactly need one.

Most industries today are regulated in one form or another, and ours is no different. Indeed, since Rideshare is trying to bring together several previously separate industries(public transportation, carpooling), we have to be familiar with the regulations for each of them. Today we want to talk a little bit about how those regulations impact our business plan, and what we plan to do to stay on the right side of them.

The regulatory world we find ourselves in does limit our options somewhat. Specifically, the taxi licensing regulations. Although taxi regulation is a state and local matter, thus making it hard to make general statements that are true throughout the United States, a few general principles hold true throughout.

  1. It is illegal to operate a taxi service, or the functional equivalent, without a state license.
  2. These licenses are far fewer in number than the market equilibrium would dictate, producing an acute shortage of point-to-point transportation services
  3. The difference between a carpool/vanpool service and a taxi service is generally defined as the difference between paying a driver to travel to a destination he otherwise would not visit, and one he was already planning to go to before he picked up his passenger.

Point 2 is what makes our business viable. Point 1 is what might make our business harder to operate, and Point 3 is how we plan to avoid any regulatory troubles.

Because of the regulations governing taxi services, Rideshare does not and will never employ professional drivers who are paid to convey people from place to place. We are a peer-to-peer network that coordinate the activities of members who already intend to travel to a specified location. As such, we are NOT a taxi service, and do not require a license to operate our app. What we do is no different than what thousands of friends, family members, and coworkers do every day. Except that we bring all those small carpools together into one larger service, affording everyone more flexibility and reliability in their carpool.

Public transportation is not so much regulated as it is exclusive. By definition, only the government can provide “public” transportation. But, there is no law saying that other companies cannot provide alternative means of achieving the same ends as public transportation, as long as they don’t fraudulently claim to be a government agency, which of course we don’t. But just in case you somehow thought otherwise, here is an official disclaimer:

“Rideshare is not an official government agency. We are a private company providing a for-profit service in a socially responsible way."

Please remember that we are all stuck in traffic together. We all breathe the same polluted air from millions of vehicle emissions. If we use the fuel that drives us to be good, we can live socially and responsibly through collaborative consumption.