The market opportunity for Texxi - Why now?


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This presentation is for urban planners to assess how a system like Texxi and the Transit Exchange could alleviate urban travel exclusion for the lower income, while not restricting choice for anyone else.

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The market opportunity for Texxi - Why now?

  1. 1. The Market OpportunityThe (Demand Responsive) Transit Exchange Empty Seats Travelling - Linking Supply & Demand
  2. 2. A Transit Exchange system is designed to complement existing travel systems
  3. 3. To promote the "New Mobility Agenda"
  4. 4. We do not aim to tell people not to use their private cars or not to take a taxi trip singly, just that thetrue costs of their decisions be reflected in the price
  5. 5. The only loser in the application of such a scheme is the single occupancy vehicle which currently comprises over 3/4 of all trips annually
  6. 6. So just how ripe is this opportunity?What do the numbers say ?
  7. 7. $500 billion p.a.
  8. 8. In the USA alone
  9. 9. €223 billion p.a. in the EU5
  10. 10. A full size system would yield€0.30 - €1.0 billionper year for the licence buyers of such a scheme in the USA + EU5
  11. 11. In New York City a system using $5m with 100 taxi 8-seater vehicles (commuter mode) would return at least $1.25m p.a.
  12. 12. Not convinced?Then jump to Slide 91 for a worked numbers example
  13. 13. A Transit Exchange exists to linksall forms of vehicular travel into afree market auction mechanismso that transport can be executedwith respect to its true costs
  14. 14. A transit exchange does for vehicle operators and passengers what anagricultural exchange did for farmers and produce buyers
  15. 15. In the market for dynamic transport it serves, it links supply and demand
  16. 16. The true costs of congestion are rarelyfactored into the prices of various modes of transport
  17. 17. Subsidies for certain other travel modes further distort the picture
  18. 18. Why Now?
  19. 19. People + Cars + Resources
  20. 20. Transport accounts for about one quarter of global energy use and energy- related CO2 emissions. International Energy Agency
  21. 21. In the car crazed USA, the proportion is even higher 75% of oil use and 50% of CO2 emissions. Transport, Energy and CO2: Moving Towards Sustainability
  22. 22. In the absence of new policies, transport energy use and related CO2emissions are projected to increase by nearly 50% by 2030 and by more than 80% by 2050.
  23. 23. 76% of commuters in America go to work alone in a private car.
  24. 24. The world’s car fleet is expected to triple by 2050 with 80% of this growth occurring in developing economies. See "50by50" report from the Global Fuel Economy Initiative (GFEI) for more details. See also the IEA press release.
  25. 25. See "50by50" report from the Global Fuel Economy Initiative
  26. 26. Increasing urbanisation is rapidly presenting a new and diverse set of challenges for many cities across theworld, most notably the BRICS economies
  27. 27. According to the UN, almost 180,000people move into cities every day [UN DESA Report, March 2012 - World Urbanization Prospects The 2011 Revision] Source:
  28. 28. That is 2 people every second [UN DESA Report, March 2012 - World Urbanization Prospects The 2011 Revision] Source:
  29. 29. [UN DESA Report, March 2012 - World Urbanization Prospects The 2011 Revision] Source: are predicted to be anextra 2.1 billion people 2040living in cities by
  30. 30. There are currently 23megacities in the world withpopulations over 10 million [UN DESA Report, March 2012 - World Urbanization Prospects The 2011 Revision] Source:
  31. 31. By 2025 [UN DESA Report, March 2012 - World Urbanization Prospects The 2011 Revision] Preparing for Chinas Urban Billion | McKinsey 2009 There will be 36
  32. 32. Source: [ McKinsey & Co. report, "Preparing for Chinas urban billion" March 2009 ]
  33. 33. China will have an estimated 8 “mega-cities” 2025(populations of > 10 million) by 2025.Two of those will have populations of over20 million.Source: [McKinsey & Co. report, "Preparing for Chinas urban billion" March 2009 ]
  34. 34. China2025 1m 20m 5m 10m 221 23 8 2
  35. 35. India2025
  36. 36. India will havecities with a 68 1population of at least million
  37. 37. India will havecities with apopulation of at least 6 10 million
  38. 38. There are predicted to be a total of 1.7 billion cars and commercial vehicles on the planet by [2] 2025Sources: 1. Wards Auto Report 2009 | World Vehicle Population Tops 1 Billion Units 2. International Transportation Forum Transport Outlook 2011 3. UCDavies ITS | 2 Billion Cars - Transforming Transportation
  39. 39. Taking the total to over 2 billion(but 4bn cars, buses and trucks by 2050)
  40. 40. Average vehicle occupancy in the United States in 1977 - 2001 was * 1.3Source: FHWA & FTA 2009
  41. 41. And as much as 30% of all thefuel used by cars in the urban USA
  42. 42. is burned by people looking for places to park in cities
  43. 43. Perhaps we can do better
  44. 44. Even while the average vehicle occupancyis currently higher in emerging economy countries
  45. 45. this trend is in reverse as both incomes and car ownership increases
  46. 46. The net effect of all these trends will beglobal gridlock on an unimaginable scale
  47. 47. With the attendantdeterioration in quality oflife for all citizens on the planet
  48. 48. And not only in the form of poor air quality, large numbers of road deaths and social marginalisation of the poor
  49. 49. but also in overall "livability" as defined bthe ability to breathe clean air, drink clean water, travel freely and easily while affording both the necessities and small luxuries of life
  50. 50. Even if we could find reallycheap or even free energy to power all of our vehicles
  51. 51. this would solve just one problem butlead to a whole host of others
  52. 52. For instance, if we started right now convertingevery vehicle to electric or hybrid drive at the rateof 1 a second
  53. 53. would take 38 years just to refit the currentstock of cars (1.2bn) already in circulation
  54. 54. And that is assuming that vehicle growth rates would be zero
  55. 55. And that older vehicles do not need replacing outright
  56. 56. and further presuming that we get what we need for free
  57. 57. One more strange side effect of the increasing automotive efficiency movement
  58. 58. is a seemingly paradoxical increase in the amount of fuel used overall
  59. 59. An effect known as Boomerang(actually Jevons Paradox or the Khazzoom-Brookes postulate)
  60. 60. So we are on a merry-go-round, where things we saveon one hand result in evenmore problems on the other
  61. 61. we in fact reduce mobility byadding more cars
  62. 62. No matter what MPG figure such vehicles apparently get
  63. 63. where in order to provide more mobility to morepeople, we end up putting out even more carbonemissions, pollution and noise while all the time creating a monster gridlock problem
  64. 64. with average vehicle speedsregressing even further backthan they did from 1901 - 2001in cities such as London
  65. 65. So we find ourselves at a crossroads,where we may gain in energyefficiency only to use more fueloverall and require mandatorycongestion pricing schemes
  66. 66. And yet, ironically, without suchcharging schemes, life in citieswould literally grind to a halt
  67. 67. Congestion charges would (in fact *do*)become the new "high oil prices"
  68. 68. Electric vehicles simply movethe point of energy generationto an area outside a city
  69. 69. To yet more power stationssituated remote from the city
  70. 70. and while clearly beneficialfor the air quality within a city (an important outcome)
  71. 71. the batteries in such vehicles are still a way off from having the same energy density as petroleum
  72. 72. to say nothing of the cost of the new powerlines needed to bring that energy into the city
  73. 73. or the sourcing, mining, transportation andfabricating of the rare earth metals used in suchbattery technology
  74. 74. Moores Lawdoes not necessarily work for technologies outside ofintegrated circuits,even while progress is being made Gordon Moore
  75. 75. Thus a 10 mpg vehicle carrying 6 passengerssharing a ride is both as fuel efficient and farmore roadspacetime efficient overall...
  76. 76. than 6 electric hybrid carscarrying only one person each
  77. 77. Is the answer more mass transit?
  78. 78. Not necessarily
  79. 79. Mass transit systems arealready overstretched inmany large global cities
  80. 80. And requireenormoussubsidy to remainoperational
  81. 81. While not being particularlygreen or energy efficient mostof the time (unless 100% full)
  82. 82. serving necessarily only themost popular locations whileremaining highly inflexible
  83. 83. not catering to "niche" or "specialneeds" customers particularly well
  84. 84. unless privatelyoperated and managed
  85. 85. So there is little economic reason to think aboutbuilding new mass transit systems from scratch
  86. 86. It is simply not economically feasible tobuild a brand new light rail infrastructurefor many of our smaller towns and cities
  87. 87. But the good news is
  88. 88. We do not always have to!
  89. 89. Where such systemsalready exist
  90. 90. There is every reason to make the best use ofthem and scope to marry them into anoverall holistic urban transport paradigm
  91. 91. Some kind of holistic system that links all types of demand for ground transportation together with vehicles that supply it in a city
  92. 92. Including water bornetransport if necessary
  93. 93. So what do thenumbers say ?
  94. 94. That the per annum market forlargescale ridesharing in the EU5 aloneis worth at least €223 billion and $500bnin the USA alone* *Assuming $0.05 per mile cost of a seat, that each car travels 16,550 miles p.a. and that each car has 2 seats free. Taxis cost $3.00 / mile.
  95. 95. That a shift to to an occupancy rate of 3.6 ormore could take as many as 75% of vehicles off the road at times of peak congestion
  96. 96. Lets do the math for a fictional cab fleetserving the commuter railway stationsnorth of New York City with 300 vehicles
  97. 97. Assume we use 100 8-seater taxis, anaverage of carrying 5 people per day to andfrom just ONE railway station
  98. 98. Paying $20 each trip(By the way, the current price for White Plains station to Downtown is $30)
  99. 99. Lets say each cab does 8 trips per day (4 trips in the morning rush hour and 4 in the evening)
  100. 100. 100 * 5 * 20 * 8= $80,000 $ cost trips / Totaltaxis people per trip day
  101. 101. 100 * 5 * 20 * 8= $80,000 $ cost trips / Totaltaxis people per trip day per day, gross revenue
  102. 102. the broker takes 25%
  103. 103. That makes $20,000 per day shared between the local Texxi company and the licence buyer
  104. 104. Is $20 per trip too high ?
  105. 105. Let us call it $5 per trip then
  106. 106. 100 * 5 * 5 * 8 = $20,000 $ cost trips / Totaltaxis people per trip day per day, gross revenue
  107. 107. the broker takes 25%
  108. 108. That makes $5,000 per day shared between the local Texxi company and the licence buyer
  109. 109. $5,000 per day $25,000 per week$1,250,000 per year
  110. 110. Or we can use the average trip distance andaverage number of seats to calculate a seat cost per mile on this model
  111. 111. And that is just Commuter mode
  112. 112. There are 6 other modes thatcan be applied for different purposes
  113. 113. Including, for example, movingpeople to and from sports stadia
  114. 114. or taking people to shopping malls
  115. 115. making it easier, safer and cheaper for studentswithout cars to get around ma rim ba ipop loll
  116. 116. shore excursions fortourists from cruise ships
  117. 117. And how many taxi vehicles are there in and around New York City ?
  118. 118. 65,000cabs, livery cars and "dollar vans"
  119. 119. But this sounds like"Blue Sky" thinking
  120. 120. Are those numbers realistic?
  121. 121. White Plains 2.383m per year 9,166 per dayNorth White Plains 660,400 per year 2,540 per day Stamford 1.928m per year 7,415 per day Greenwich 729,400 per year 2,800 per day
  122. 122. Would people really beattracted to such a scheme ?
  123. 123. We are have actual evidence that once people experience cheaperfares, that bridge is truly crossed $30 or $5 per trip is compelling, especially if you travel 500+ times a year
  124. 124. And how much investment is needed to make this example a reality ?
  125. 125. $5mto be paid to the licensing company for the franchise rights
  126. 126. What would all thatmoney to be used for ?
  127. 127. Advertising and promoting theservice and its capabilities
  128. 128. d rio " pe p up m " ra t he d in an em ngd ildiBu
  129. 129. It takes a certain amount of time to go from "the ground floor" to a well patronised system
  130. 130. This is the dawn of a new transport paradigm
  131. 131. We are ready to take the plunge in a number of cities
  132. 132. For more (0) 207 993 2324