A Practical Application for a Boring Company

[Disclaimer: The ideas and views in this post do not represent any of Ken Pyle’s professional or volunteer roles (including his role as SJC Airport Commissioner) and are strictly his own.]

Overview:

An order of magnitude less expensive than traditional tunneling methods is the promise of The Boring Company. Assuming The Boring Company’s numbers are close to accurate, this could be a game-changer, if not for entire networks of transportation, like Elon Musk envisions, but for point-to-point solutions.

This brief analysis looks at one such challenge, which is ferrying people from SJC, Silicon Valley’s Airport, to the Santa Clara train station, which is expected to be a major hub with service from Caltrans, BART, and High-Speed Rail.

What Makes The Boring Company’s Approach Different

The Boring Company is doing some innovative, but not exactly exotic, things to reduce costs, including boring smaller tunnels than would be needed for traditional transit, turning the dirt into bricks (instead of hauling it away) and running the boring machines 24-hours per day using electricity and via robotics.

cube from continental
Example of one of the many electric pod vehicles shown at CES2019

This technology could provide for an interesting connector between SJC and the Santa Clara train station.  At $10M per mile, this might be a fairly inexpensive way to create a connector to the airport. To be clear, this would be unlike The Boring Company’s proposal where private vehicles would be lifted up and down. The electric, pod-like vehicles would stay in the tunnel.

Assumptions and Business Case:

The following spreadsheet provides a rough estimate of capital and operating costs based on a set of assumptions. To directly access the spreadsheet, go to this link:

https://docs.google.com/spreadsheets/d/1rxBCOGifqLi03E6Sr_LzRd9qS-E4EK_N9qsNxh2gOh8/edit?usp=sharing


The total cost per passenger would be less than $1.50. A $3 charge would provide a 50% margin while paying back capital costs (unlike, Oakland AirBart connector, which charges $6 just to cover operating costs, has a top speed of approx. 25 MPH and isn’t covering any capital costs).

Of course, there are a lot of assumptions in the above model (e.g. could there really be a demand of 1M passengers (that would represent only about 7.5% of current SJC passenger demand, so maybe not too far off).  It might eat into parking revenue and TNC revenue, but it could be priced accordingly. Also, the vehicles would probably have to be sized to carry about 16 people max (to get the average of 8 people), but they could probably use the same skateboard, as an existing Tesla and wouldn’t need all the interior bells and whistles of a Tesla).

Some assumptions, like the cost of electricity and even the cost of the pod vehicles, could be lower (e.g. inductive charging through the concrete could greatly reduce the battery size on the pod vehicles, life could be more like 500k miles), lowering upfront costs and ongoing electricity needs.  There is slack built in the above model, so, for example, say the number of passengers is less than half assumed, then the operating and amortization of capital costs would increase to $2.87 per passenger; not good, but lower than a price of $3 per passenger.

Clearly, the above model needs refinement, but it appears to be compelling enough that it deserves further study by VTA & SJC.

Advertisements

One thought on “A Practical Application for a Boring Company”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s