Hyperloop Could Take People from LA to SF in 35 Minutes
In this episode of TechTalk, Dave Katz, Senior Audit Manager in EisnerAmper’s Technology and Life Sciences Practice, tells us about this space-age technology that could revolutionize personal travel and commercial traffic sooner than you may think.
Dave Plaskow: Hello and welcome to EisnerAmper’s Technology Podcast series. With more than 500 hundred technology clients, we’re always interested in the latest industry trends and developments, as well as any related business and accounting opportunities and challenges. Today’s topic is the Hyperloop. I’m your host Dave Plaskow, and with us today is Dave Katz, Senior Manager in EisnerAmper’s Technology and Life Sciences Practice. We like to call this the Dave & Dave Show. Dave, welcome and thanks for being here.
Dave Katz: Pleasure to be here Dave.
DP: So Dave, the Hyperloop – it sounds part science fiction and part amusement park ride. What are we talking about here?
DK: So we’re talking about a transportation system where pods will be enclosed in depressurized tubes, and by using magnetic levitation technology and eliminating friction and air resistance, Hyperloop may be able to reach speeds of more than 700 mph. So we’re talking Los Angeles to San Francisco in 35 minutes. Travelers may be unsettled by those speeds – developers liken it to riding in an elevator.
DP: Ok. And where would the infrastructure for this live?
DK: Maybe above ground, below ground, underwater, or some combination in-between.
DP: Ok. And whose ideas was this?
DK: It was originally conceived by Elon Musk, also famous for the Tesla auto and Space X.
DP: And what are some of the pros and cons of the Hyperloop?
DK: Clearly there are huge costs and time savings by moving both people are cargo in such a rapid manner. Also, based on the propulsion method, the Hyperloop has zero carbon emissions. However, it’s not without its challenges. Construction estimates for a Hyperloop from LA to San Francisco vary from $6 billion to $100 billion. And with certain disruptive technologies, safety is a concern. And the issue of land rights and eminent domain are certainly likely to come into play.
DP:And where does the project stand today?
DK: So in ’15, Musk announced a Hyperloop design competition, and a company called Hyperloop One took the challenge. In May 2016, the company conducted a test in the Nevada desert. It’s a limited run, about the size of a football field, but the Hyperloop One team described those results as a Kitty-Hawk-type moment. And on the heels of that test, Hyperloop One agreed to do an economic feasibility study on how to deploy the system at Dubai’s Jebel Ali Port. DP World, which is the third largest terminal operator in the world is interested in a possible submerged or floating Hyperloop system to rapidly move cargo, and Hyperloop One is targeting 2019 to move cargo and 2021 to move people.
DP: This could be huge for the commercial sector. Obviously, an undertaking of this is going to have a big price tag. Tell us a little bit about the Hyperloop One’s financing.
DK: Sure. So Hyperloop One is headed by venture capitalist Shervin Pishevar whose firm is a major funder of Uber. But the Hyperloop project is a collaborative effort that includes other VC firms, transportation specialists, technology experts, dozens of engineers, and those with political backgrounds, as well as hundreds of open-source participants. To date, Hyperloop One has secured $120 million in funding, and Pishevar has indicated that additional cash generated by Uber could go into Hyperloop development.
DP: What role will accounting professionals play in all of this?
DK: We see this potentially impacting a host of industries, such as clean tech manufacturing and government contracting, just to name a few. And there’s also going to be a need for forensic accounting professionals with all the money being thrown around and invested in the space—so are international tax specialists to deal with international investing and complex issues such as transfer pricing.
DP:Would you ride in one?
DK: As long as the safety aspect gets vetted, the idea of getting from North Jersey to a client in Philly in 20 minutes or so is very intriguing.
DP: I would if it did feel like an elevator – going under water might freak me out. So Dave, as always, thanks for your expertise and great insight.
DK: Thanks Dave.
DP: And thank you for listening to the Dave & Dave Show, as part of the EisnerAmper podcast series. Visit EisnerAmper.com for more information on this and a host of other topics, and join us for our next EisnerAmper podcast, when we get down to business.
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