3. Government Point of View Government New Revenues Miles Traveled Gas Tax Revenues (Indexed vs. Road Cost) Road Damage Deficits Source: US FHWA Safety Usage Fees $60B
4. Types of Usage Fees Any Usage Fee = Benefits Road Use/City Access Usage-Based Insurance Municipal Parking Source: Business 2.0 Fees = Meters
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6. Yes, It’s Private! ‘ World’s Toughest Privacy Rules’ “ While the U.S. has opposed comprehensive regulations to protect citizens' privacy , Europe has plowed ahead with the world's toughest set of rules.” ‘ Europe: Playing Privacy Cop to the World’ Wall St Journal, 10/10/2003 GPS Metering started in Europe in 2005!!
10. Experienced Team CEO: 10 year entrepreneur; CEO, angel, COO Domain: world expert in GPS tolling; co-founder (3x) Tech: IBM, Oracle, PhD Math; CTO (2x) Sales: sold >$300M in US, EU, China Supporters: VC (IAF), incubator (MaRS), board
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Editor's Notes
I’m Kamal, CEO of Skymeter. We do Smart Meters for Cars. Before I explain that, you probably want to know a little about me. Studied engineering physics, Insead MBA, Bain & Co consultant. In 1998 I became an entrepreneur – CEO of a multinational, then angel investor and interim leader. I enjoy taking ideas and turning them into reality – into businesses. When Skymeter came along I wasn’t looking to be a full-time CEO: but I saw three things that changed my mind. (1) Opportunity that comes by maybe once a decade - could be 5-10x bigger than RIM (2) An opportunity that was worthwhile – something that truly makes a difference in the world, and in people’s lives, and (3) an opportunity that needed visionary, strong leadership – a leader who could assemble a world class team, and build a world class company. That’s an opportunity I couldn’t turn down – either as a CEO, or as an investor.
So why does a car need a smart meter? Well, this is what meter-less driving looks like. 30% more driving in a decade – in an already heavily developed driving nation like the US. That’s also what meterless electricity looks like, or meterless water: constant growth in consumption. What is the impact of meterless driving? First, emissions: drive 30% more with today’s fleet of cars, and you have almost 30% more emissions. Second, traffic congestion: more miles traveled, same lane miles = more congestion. Third is the impact on safety. I have a lifesaving type for you. If you have a heart attack from the stress of all that driving – make sure you don’t get your heart attack during rush hour. More driving = more deaths. Now of course there’s a benefit to free roads. Everyone loves free …even if free means more emissions, congestion, and more deaths. So who pays for our free roads?
Well, the government pays for the roads. And of course, the more driving we do, the more the roads get damaged, and the more the cost of road repair. Though of course sometimes we can choose not to repair them. That’s a safety issue – bridges falling into rivers and so on. So there’s a tough tradeoff. Where does the money come from? We all know – the gas tax. If you look at total gas tax revenues in the US and index them to road repair costs, you get the graph in green. That’s a big hole to plug: in the US a $60B hole, between total gas tax and all driver fees, and the cost of the roads – at their current state of repair. That $60B paid to give you your ‘free roads’. And where does the $60B of government money come from? Look around. From you the taxpayer. Let me put that $60B into perspective. The stimulus plan was $800B over 10 years – that’s $80B a year. The same as this hole. Governments are looking to fill the hole with usage fees. Because usage fees don’t just raise funds … they also can reduce miles traveled!
What kind of usage fees? Any kind. You can charge for parking, road use or city access. That cuts usage, and also gives government revenues. Or you can charge for insurance – which at least affects miles traveled. All usage fees help. How much? Well, Milan in 2008 started charging a fee to access the city. That cut emissions by 14% in the city center. Speeds in other cities have gone up 30% or more during rush hour. And yes, that means faster ambulance service. So there are driver benefits, as well. And if you are going to charge usage fees – you need meters.
Usage based fees require a metering system: which would you rather use? The one shown? With expensive, limited hardware; with cameras on every street corner? Or a system like Skymeter – which is flexible, which works on every road or spot without gates – which is private – and is multi-functional and offers a huge cost reduction. Now some of you are probably looking at that and going private? A GPS meter is private?
Yes, it is private. According to the Wall Street Journal, Europe has the world’s toughest set of rules to protect citizens privacy, unlike, say, the US. And GPS Metering started in Europe in 2005 – in full compliance with Germany’s tough privacy legislation. We have a perception on GPS and privacy … but that perception is based on myth and James Bond, not reality.
Speaking of myths, let me give you a sample customer to dispel three myths about Skymeter. Toll Collect is a German integrator, who has been running GPS smart meters in 600,000 trucks in Germany since 2005. They are a potential customer for Skymeter. Myth #1 – Skymeter sells to governments. Fact – Skymeter sells to integrators like Toll Collect. The German government gives a large German company a contract – we supply the winning company. Myth #2 – the market is some point in the future. Fact – Toll Collect installed their system in 2005. They are replacing 600,000 meters starting next year. Skymeter sells to integrators who serve governments who either are buying today, or who have already bought!! Myth #3 – a company first does $2M in sales, and gradually builds to $50M. Fact – the metering business is different. If a government decides to meter road use they don’t say ‘we only meter BMWs or 5,000 cars. They meter zero or 500,000. So to repeat the three facts: we sell to integrators, for a market that exists today, and in a market where it’s as easy if not easier to sell 500,000 than 5,000.
So why would Toll Collect choose Skymeter? Deployment – show Skymeter
So why would Toll Collect choose Skymeter? Deployment – show Skymeter
How do we do our technical magic? We have a very similar technical architecture to the Blackberry. The company we actually resemble the closest is VISA. Some of you may be struggling with that example – and this is exactly what we do: collect and gather the data for a financial transaction for multiple integrators, like VISA does for multiple banks. And we can do it for multiple types of payment: roads, parking, insurance, emissions … just like VISA.