What Would It Take for a Driverless America? It would take political action, public sentiment, and better funding. The growing congestion is creating a new demand for political solutions to relieve and expand our infrastructure as gridlock sets in. It will be cheaper to build on top the existing multi Interstate Highway network with smarter computerized and electrified technologies in time to take us beyond oil. And these new 3 to 6 passenger technologies generate revenues that can finance them. Over time 15 to 20 passenger buses can be added. By starting now, we can plan and gradually construct what we want, instead of having climate change control us and force us to change our ways without any preparation. Hundreds of new and a few older companies are preparing to compete for a share of this trillion-dollar upgrade market with local circulators now and then Interstate routes soon. The industry is getting traction now with 12 cities starting studies and Colorado is already seeing proposals for a $3 billion system on I-70 mountain corridor. Such systems would need to have profitable revenues in order to attract private capital and it would need popular selling points such faster and more convenient service, clean energy, 200 mpg equivalency and reductions in our congestion/pollution.
1. Startup Ventures- Everything begins with a first step and in this case, it is forming a business venture to get started by building a proof of concept The estimate for this phase is $25 million to build a test track and a one mile demonstration model with 6 stations ( 1 every ½ mile)
Five new members, each investing $50 Million. If 10,000 miles is an example, here are the amount of business development potential:
Driverless Software 10% of route for $15 billion market
Car manufacturing 30% of route for $45 Billion market
Systems Integration 10% of route for $15 billion market
Telecom over fiber 10% of route for $15 Billion Market
User travel management 5% of route for $ 7 Billion Market
Construction 30% of route for $50 Billion Market
Shipping 5% of route for $ 7 Billion Market
Then a State would have in place a Consortia to deliver the development and construction of routes. Next 100% financing of routes can be obtained by selling an Industrial Development Bond. Let us visualize a Bond like structure with blockchain features of Cryptos. These will earn at 3.0 % interest with 30-year amortization and 50% of the surplus. And there will be huge surplus over the years. Any number of companies could market these bonds and manage the treasury on behalf of each state without government investment.
3. Capital Formation is key to Development. This essay describes an economic concept for a USA PUBLIC BENEFIT CORPORATION (PBC) to provide the national tax-free structure, safety and interoperability oversight. Each State will own the Driverless infrastructure and form Public Private Partnerships (PPP) within the PBC partnering with developers and capital to fund corridors that provides portions of the 50,000 miles. Collectively this becomes a $1 Trillion-dollar driverless backbone built within and beside the existing Interstate Highway system. A possibility of this concept is to go after some of the $10 trillion “flight capital” that is on the move around the world. It is looking for safe havens and assurance they will get repaid. What assurance is better than investing in 5 different kinds of critical transport infrastructure that generates all its revenue from user fees?
In addition to “flight capital” are repatriated dollars. The Public Benefit Corporation could create a Federal Bank Depository for foreign and repatriated dollars. Then there are the Pension funds which are looking for long term growing profits opportunities. Digital Currencies and Cryptos are new forms of capital that offer an exciting opportunity.
Features of infrastructure offerings:
* $1 Trillion for a Driverless America Backbone of 50,000mmiles
4. States Should Own 30% - The $3 Trillion Cost can be sliced and diced by 50 states working concurrently on a national backbone. States would be the most logical owners because this is revenue infrastructure that will survive for a very long time. Also, States will be needed to provide the Rights-of-Way and operating authority. This proposal is for the States to own 30% of the surplus (profits) for 30 years and then the funders capital will be amortized, and their mortgage expired. Then the States will receive 100% of the Net Operating Income. This is likely to be a huge annual amount that could expand as spurs and even make up for other State revenue short falls in other programs. During the last 10 years of the mortgage States could put in place seeds that they want to grow when the mortgage disappears.
5. Digital Currency Is a Digital Currency exchange for a new type of (Green) Bonds feasible? These bonds could be issued by each State as a Public Private Partnership (PPP) based on earning significant infrastructure revenues. Since each State would own their routes via the PPP, they could sponsor competitions for funding and for developers. These in effect put a 30-year tax free mortgage on each route. The Bonds would be like industrial development bonds with 3.5% interest, 30-year amortization and a surplus. Over time there will be large surpluses, so each party gets a share: developers 20%, each State 30% and the capital funders 50%. This should attract the needed capital for each route. After 30 years the mortgage is paid in full and the State gets everything. Although there is Wall St. and Silicon Valley funding, Digital Currency is a new wave sweeping the globe. Here is a chance for the government to establish a new asset class for infrastructure funding. There are thousands of Crypto companies already set up to market investments. Using their blockchain technology would offer investors some of these features such as instant liquidity, faster and cheaper transactions, tamper proof, anonymous, decentralized and appreciation of shares. With the earnings from Cross country (day) ridership and (monthly subscriptions) urban ridership, the volatility would be minimized compared to today’s Crypto market. The Crypto industry is going mainstream. In 2020 Big business, big banks and big governments are preparing their own form of digital currency. Technology companies such as Microsoft, Google, Amazon, Apple and Facebook have plans to issue this year or next. Walmart, Ford, Disney, Met Life and Intel are said to be preparing for issuing digital currency products next year. Even the big banks which have resisted Cryptos so far are known to be preparing their own digital currency: JP Morgan, Wells Fargo, Morgan Stanley and Bank of America. The United States government has a plan to issue Fed Coin soon. Even China is getting into Digital Currency. Also Congress has Introduced 32 Crypto and Blockchain Bills for Consideration. These are all just timid first steps.
6. A Proposed Structure for any State
* First is a $25 million Startup Venture to organize a team, build scaled Models, buy a testing site on large acreage and build a one-mile demonstration model. Draft a model Public Private Partnership to propose to states.
* Second Market a Development Consortia that contracts with Public Private Partnerships in selected States for funding an incubator with $250 Million consortia capital. An incubator of 10m to 15-mile operating route is built as a national demonstration
* Third Begin private funding for engineered routes and proposals to the private sector markets for the Consortia to develop 3 to 4 additional incubators. This phase is the Beginning of Revenue Production with 3 illustrations:
A Metro example-
7. Sustainable Economics. There are daily revenues for cross country trips $100 and monthly subscriptions for unlimited use in urban areas. Based on a subscriptions service of around $100 per month for unlimited ridership in the metro areas, travelers would save money over car ownership and normal travel costs. The “last mile” problem has always been the short fall to transit, but with Uber and other shared services this problem is easily solved. In addition Improvement Districts can be installed for one mile around each station to provide dedicated paths for drivers buses, trolleys, carts and trams, Our rough economic evaluation is that these routes can pay for themselves and can retire debt over a 30-year period. With the “Stacked Pay Zone” concept they could pay double today’s market returns. If investors could also get 50% of the surplus, it would make the funding even more marketable. Why will there be a surplus? (1) less labor costs (2) multiple revenues such as travelers, cargo (fills the night-time hours), fiber optics (underneath guideway) and solar electricity (3) increasing prices over 30 years (4) increasing users will grow huge over 30 years of the partnerships. Users should be able to use their cell phones to coordinate their elevated travel with ground based driverless, banking, shipping, media, restaurants, hotels, events and purchases.
Profits on these systems are thought to be in the 6% to 10% range in the early years and grow up to 4 times higher within the full 30 years. This is just for the movement of people. Adding in the other revenues, the profits could grow from 20% to 30% combined ROI in the early years. Small systems costs for malls, resorts, universities, hospitals, airports, office parks and venues will cost $25 to $50 million, small city circulators will be $150 million range and up and Interstate systems will be in the Billions of dollars. By stacking the various carriers (travelers, cargo, fiber and energy) into one easement, the combined profits are expected to be larger, more sustainable and growing faster.
This will stimulate the economy, give each state the authority to design and sell new Bonds based on tax free incentives and higher returns. America needs a new green economic model for the movement of goods and people. It also generates new jobs building it. Mobility is the heart of our economy and the lifeblood of every community in which we live, work and invest.
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