Research & Ideas <http://hbswk.hbs.edu/features/research.html>
Can Entrepreneurs Drive People Movers to Success?
<http://hbswk.hbs.edu/item/6333.html>
Q&A with: Benjamin G. Edelman
Published: December 14, 2009
Author: Martha Lagace
Executive Summary:
Call them next-generation driverless taxis or people movers, the age of
personal rapid transport is just around the bend. Could PRT change the
face of public transportation in cities and smaller communities? HBS
professor *Benjamin G. Edelman* weighs the benefits and opportunities
for entrepreneurs and for society. "Right now, the field is wide open,"
he says. Key concepts include:
* A typical PRT vehicle carries one to four passengers along a
dedicated track. It travels direct routes---no stops along the
way---using computer control.
* Although it sounds futuristic, the PRT concept has been discussed
seriously by engineers, designers, and academics since the mid-1950s.
* A PRT system has been in use since 1972 at the University of West
Virginia in Morgantown. An installation at London's Heathrow
Airport is slated to open in 2010. Yet general skepticism remains
prevalent.
* PRT could reduce traffic congestion by offering a strong
alternative to the private automobile.
* Other opportunities include establishing PRT systems on corporate
or educational campuses, ultimately reducing costly and intrusive
parking garages.
* PRT systems could also improve the value of real estate on land
that is not close enough to other public transportation or services.
<p>Call them next-generation driverless taxis or people movers, the age
of personal rapid transport is just around the bend. Could PRT change
the face of public transportation in cities and smaller communities? HBS
professor <strong>Benjamin G. Edelman</strong> weighs the benefits and
opportunities for entrepreneurs and for society. "Right now, the field
is wide open," he says.</p>
About Faculty in this Article:
HBS Faculty Member Benjamin G. Edelman
Benjamin G. Edelman is an assistant professor in the Negotiation,
Organizations and Markets unit at Harvard Business School.
* More Working Knowledge from Benjamin G. Edelman
<http://hbswk.hbs.edu/faculty/bedelman.html>
* Benjamin G. Edelman - Faculty Research Page
<http://pine.hbs.edu/external/facPersonalShow.do?pid=417579>
* E-mail Benjamin G. Edelman: bedel...@hbs.edu <mailto:bedel...@hbs.edu>
Imagine you've arrived for a meeting at a corporate campus. But now you
discover that the conference room is in another building a quarter mile
away. Sure, you could walk there ... but in the rain? Up purrs an
automated people mover, a vehicle shaped like a segment of a subway car,
big enough to carry solo travelers or small groups. You step inside,
press a button for your destination, the door closes, and off you go
down a narrow track. Two minutes later---presto, the door opens again
and you alight at your destination. You've arrived for your meeting on
time and fresh as a daisy.
The concept of personal rapid transport, or PRT for short, has been
percolating since the mid-1950s and is finally gaining ground, according
to HBS professor Benjamin G. Edelman. Business and communities small and
large are increasingly aware of PRT as a "green" solution to multiple
transportation problems from (in)convenience to price to congestion, he
says.
"Robust computer control is at the core of a successful PRT."
The concept is well known---you have likely encountered automated,
driverless people movers in cities such as Detroit
<http://www.thepeoplemover.com/WE-LL-TAKE-YOU-THERE%21.id.2.htm>,
amusement parks (Disneyland coined the name PeopleMover for its
transport/ride launched in 1967), and numerous airports.
However, these systems were largely designed to move a large number of
people on a fixed schedule along a track from point to point to point.
In today's revival, people movers are downsized into single cars, a
lightweight "pod car," that quickly ferry from one to four passengers
with no waiting to a number of possible destinations.
Grey body yellow doors
PRT is an innovative approach to short-distance transportation,
continues Edelman, whose other research interests include the design of
electronic marketplaces.
"These vehicles travel on an exclusive right of way, typically an
elevated guideway, though track can also be installed at or below ground
level. A vehicle leaves when passengers are ready, and service is
nonstop from origin to destination, with no intermediate stops for
others to get on or off."
An assistant professor at Harvard Business School, Edelman recently
wrote about Vectus, Ltd., a Sweden-based PRT firm, on his Web site
<http://www.benedelman.org/prt/prt-111109.pdf>; a case study
<http://harvardbusiness.org/product/personal-rapid-transport-at-vectus...>
is available from Harvard Business Press. Other firms in the PRT
business landscape include Advanced Transport Systems (which won a
contract for Heathrow Airport's Terminal 5), 2getthere, and Cabintaxi.
In the past decade PRT projects been weighed for sites as diverse as the
docklands in Cardiff, Wales; the airport-to-town route of Ciampino,
Italy; and the Technical University of Eindhoven, The Netherlands.
We asked Edelman more about PRT in an e-mail Q&A.
*Martha Lagace:* How did you first become interested in PRT systems?
*Ben Edelman:* As a longtime user of public transportation, I often wish
for more widespread transit links, more frequent services, and faster
journeys. Yet I'm shocked by the costs of existing transit systems. At
$200 million per mile (the approximate cost of recent subway projects in
Los Angeles and Washington, D.C.), subways can be tough medicine. And
cost aside, subways are no panacea---disruptive construction, limited
residential connections, and for many routes, long trips due to line
changes and waits between trains.
"A lot depends on the public response."
Most of the cost of a subway system comes from the guideway---digging
tunnels, building stations, laying track. And when you look at that
track, it's usually empty. Every ten minutes a train sweeps by, and then
the track lays fallow for nine more minutes. That always struck me as
inefficient: We built this expensive track only to leave it vacant most
of the time.
PRT offers a different approach. With much lighter vehicles, the
guideway can be proportionally slim---above ground in many areas, with a
visual intrusion as small as an elevated bicycle path. Stations can be
equally small---even integrated into the side of existing structures,
improving convenience while further reducing construction costs. Because
service is on demand, passengers need not wait for a vehicle to arrive,
and changing lines would be a thing of the past. I had been thinking
about some of these concepts independently. Then I was thrilled to learn
that implementation is well under way.
*Q:* Have you ridden in a PRT? If so, how was it?
*A:* I've ridden the Vectus test track in Uppsala, Sweden, and I've
toured the new installation (scheduled to open in 2010) at Heathrow
Terminal 5. They're both impressive: smooth track, elegant vehicles, and
a polished user interface.
*Q:* In 1972 a PRT was launched at the University of West Virginia in
Morgantown, and it continues to operate today. As you write, the concept
of PRT is not new; it has been public since the mid-1950s. Since PRT
seems a great idea, how do you explain the long gestation? What have
been the main obstacles to date?
*A:* PRT designers in Morgantown started with the right concepts---small
vehicles and on-demand service. But the designers worried about the
occasional rush, so they enlarged the vehicles, which required
strengthening the track and enlarging the stations, which led to a cost
spiral. These days, designers understand the crucial importance of small
vehicles to limiting system cost. Another key improvement: Robust
computer control is the core of a successful PRT---tracking vehicle
locations, knowing who wants to go where, sending appropriate
instructions. With modern IT, these tasks are far easier than in the past.
Morgantown's system attracted early complaints for its cost and visual
intrusion. But Morgantown's PRT stacks up well against decades of
shuttle bus costs---particularly given its speed and reliability
advantages. Indeed, Morgantown's system provides more than 10,000 rides
per day, continuing for decades with good reliability.
*Q:* What is the potential now for PRTs to "take off," so to speak? What
are the incentives both for PRT businesses and for the public?
*A:* Certainly interest in clean technology is an important part of the
story here. What would it take to get commuters out of their cars and
into public transit? I envision a subway system with stops further
apart, so long-haul transit can be faster and more efficient. Then each
subway stop enjoys a feeder network of PRT serving businesses and
residences with proximity at least as convenient as current bus stops,
and a quality of service far above what buses can offer.
Right now, the field is wide open. Companies with existing transit
experience are certainly watching PRT. But the first PRT installations
are coming from small companies and entrepreneurs.
*Q:* What sorts of hurdles remain?
*A:* One challenge is general distrust in the approach. PRT is
complicated---numerous small vehicles rather than a few large vehicles,
computer control in place of drivers. Simulations say these changes are
workable, but some people want to see proof through operational
installations. That's fair---and I'm hopeful that demos will be
available in 2010.
"With the right combination of price, speed, and convenience, PRT
could beat the private automobile."
Also uncertain is public response to an elevated guideway. I well know
the impact of elevated highways---recall the elevated I-93 in downtown
Boston---and I'm no fan of that kind of intrusion. To me, PRT feels
quite different from an elevated highway: A bidirectional PRT guideway
can be narrower than a single lane of highway, and some PRT guideway
designs let light pass through to areas below.
We accept all kinds of intrusions in our urban environments---buses,
highway ramps, traffic lights, telephone poles. I am hopeful that PRT
will stack up well---huge benefits relative to the intrusion it asks a
community to permit. But a lot depends on public response.
*Q:* Might the potential for PRT be greater in countries with good and
already-established public transportation infrastructures as compared
with, say, the United States, where most citizens like and need their
automobiles?
*A:* Certainly Americans like cars. Although no one likes traffic jams,
shoveling snow in the winter, or paying for parking. With the right
combination of price, speed, and convenience, PRT could beat the private
automobile. There are already routes that are faster by bicycle than by
car, particularly when you consider parking. PRT can widen the gap.
In the very densest cities---parts of New York City and plenty of cities
elsewhere---PRT probably isn't a great fit. But even small to midsized
cities struggle with automobile congestion, particularly since subways
and light rail often don't match their needs. In this spirit, Santa
Cruz, California, and Ithaca, New York, are already looking at the
benefits of PRT.
*Q:* What sorts of questions should managers at Vectus or other PRT
businesses ask themselves going forward?
*A:* I'm convinced that PRT creates huge value---reducing automobile
congestion, and getting passengers to their desired destinations more
quickly and more reliably. But how can a system vendor claim a fair
share of that value---enough to justify building the system in the first
place? One possibility is to seek government funding. That's not a bad
idea---so much transit is government-funded---but it's a tough
requirement for an upstart business.
Car station
Another possibility: Build PRT on a corporate or educational campus. The
campus owner internalizes benefits, and could pay to build the system.
I'm particularly struck by the use of PRT to increase the value of land
that might otherwise be viewed as undesirable. Consider a parcel that's
a bit beyond walking distance from the subway, restaurants, and the
like. Right now, a developer must accept a dramatically reduced price
for that kind of land. But PRT could connect outlying buildings directly
to a subway platform and a restaurant district. A PRT-connected outlying
building could be a two-minute ride from a subway station a mile
away---closer, in terms of time and convenience, than a close-in
building just a block from the station. Suddenly the outlying land is as
valuable as the close-in land, and the developer can afford to pay for
PRT with private funds. It's an exciting possibility, and I believe it's
workable for a broad class of PRT installations.
*Q:* What are you working on next?
*A:* These days, online shoppers face deceptive offers that promise
discounts ("$10 off your next order") while they attempt to check out at
ordinary retail Web sites. Because an online checkout requires a series
of "yes" and "I agree" confirmations, it's all too easy to press an
extra button that purportedly accepts one of these offers, without
realizing that the offer actually carries a charge of $15 per month or
more. Notably, these offers obtain consumers' credit card numbers
directly from partner sites---playing into consumers' reasonable but
mistaken belief that, if an offer doesn't request a card number, the
service must be free. As a result, a user may enter a billing
relationship and face credit card charges without actually providing a
card number to the company that posts the charges.
I analyzed deceptive characteristics of these offers in a statement
<http://www.benedelman.org/posttransaction/statement-1.pdf> to the
Senate Commerce Committee in November. At present, I'm comparing these
practices with applicable rules
<http://www.benedelman.org/posttransaction/cardnetworks/> from Visa,
MasterCard, and American Express. Card networks do not let merchants
copy customers' card numbers willy-nilly, so I hope to get these charges
removed from the credit card ecosystem.
Meanwhile, this holiday shopping season users ought to exercise special
caution. A link promising extra savings may not be what it seems. Be
careful even at trusted sites: Sites as well-known as Buy.com, Expedia,
and US Airways all confronted consumers with these deceptive offers.
To learn more about PRT:
Advanced Transport Systems, Ltd.
<http://www.atsltd.co.uk/applications/proposed-systems/>
Vectus PRT <http://www.vectusprt.com/>
2getthere <http://www.2getthere.eu/>
Cabintaxi <http://faculty.washington.edu/jbs/itrans/cabin.htm>
