What is the Hyperloop?

As usual, Elon Musk is keeping everyone guessing. At some point in August, he has said that he is going to reveal exactly what he has in mind for this high speed transit system. There have been a number of guesses about the precise nature of the hyperloop, at least one of them supposedly coming close.

The basic idea has been around since the 60′s – build something like a train, but running inside of a tube, allowing for tight control over the environment that it moves in (and therefore permitting higher velocity). Some of the variations involve a vacuum tube, or pressure differentials to move the vehicles, or magnetic propulsion of different kinds. All of them were ultimately discarded as being unfeasible.

Instead of speculating about the technology (since so many others are doing so already), I just want to share a few thoughts that came to mind about how he might be planning on implementing the hyperloop from a business standpoint.

  • Railroad companies tend to trade at a relatively low P/E these days. A railroad already owns significant rights-of-way. In theory, buying such a company could be an excellent starting point. The new hyperloop tubes could be built on elevating columns, above the existing railway lines.
  • Safety is going to be a huge factor. How quickly can the vehicles inside the tube be decelerated in case of emergency? How will the system prevent vehicles from piling into each other at huge velocity, if something goes wrong? How will it deal with things like earthquakes?
  • My best guess is as follows: this system is wasted on human passengers. Personally, I’d rather take a plane if I’m in a hurry to get somewhere.
  • However: this would be an amazing way to deliver cargo quickly – think same-day delivery. Combined with other light-weight distribution systems (i.e. a network of small local delivery vehicles), a trans-continental hyperloop network would allow a small number of warehouses to provide same-day coverage for the whole of North America. Think of Amazon’s grocery experiment in San Francisco, scaled up big-time. Using a large volume of tiny vehicles, with automatic routing, the hyperloop would allow for exceptionally agile logistics, and would enable business models that are currently unfeasible.

I guess we’ll just have to stay tuned for now…

2 responses on “What is the Hyperloop?

  1. Jeff

    “this system is wasted on human passengers. Personally, I’d rather take a plane if I’m in a hurry to get somewhere.”
    Not me. The plane is a reservation system relying on heavy logistics/air traffic control/weather with cancelations and delays, the airport itself is a chokepoint even if you disregard the lower speed.

    The Hyperloop would be like taking the bus, you just get there, hop on the next pod, and zip to your destination, for a probably cheaper price (pod is much more simple than an airplane, less maintenance than high-maintenance airplanes, no oil price hikes and oil storage logictics, no air traffic/radar management), despite the technology once in place its much more simple than air travel. I would choose Air over hyperloop for the various destinations that would always remain without direct hyperloop connection, but between cities that are connected by hyperloop I imagine I would choose this mode over air for sure.

    1. Jeremy Lichtman Post author

      If there’s sufficiently high traffic, there would be some kind of reservation system as well (the PDF on the Tesla blog indicates the volume they anticipate it being able to handle) – I’m thinking that the train system in Europe might be a better analogy. Also high likelihood of needing at least marginal security.

      My point though was not that it wouldn’t be efficient in moving people around, but rather that economically the benefit for using it to move cargo would be vastly larger.