Special Report

Las Vegas Gambles on a Future With Car Sharing for Everyone

Zappos CEO Tony Hsieh is investing $350 million in an ambitious redevelopment plan that includes a new model for getting around Sin City

(Shaylyn Esposito)

Give people free shipping and a yearlong window for returns, as the retailer Zappos did, and suddenly buying shoes online is a lot more appealing. Give them access to manifold transportation options in a place where good jobs, homes and entertainment are within walking distance, and going car-free just might take on new allure.

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That’s the experiment under way in Las Vegas, Nevada, where Zappos CEO Tony Hsieh is investing $350 million over five years in an attempt to re-energize the city’s 1.5-square-mile downtown area. This for-profit investment plan, called Downtown Project, is focused on attracting technologists and artists to a part of town that has long had more empty lots, seedy bars and vacant buildings than hopeful startups or hip boutiques. The hope is that these creative types will “serendipitously” collide with one another in cafes, parks and co-working spaces, exchange ideas, and build great companies as well as a tight-knit community.

Three years into the project, Hsieh and his partners are now just months away from launching the most ambitious part of the plan: Project 100, a major new transit service incorporating shared electric cars and bicycles, shuttles, and chauffeured vehicles, all available for a flat monthly fee. Organized under Downtown Project as a separate company, Project 100 kicked off earlier this year with the purchase of 100 Model S electric sedans from Tesla Motors. By summer 2014 the company aims to build out a network of 150 to 200 shared bicycles, 150 shared cars of various sizes, 100 chauffeur-driven electric cars, and several Sprinter van shuttles that founder and CEO Zach Ware says will provide "the sort of shuttle experience you aspire to," although he's not yet sure what exactly that will mean.

All of this has the potential to shift energy use away from gas tanks if it enables people to cover fewer miles by car, says Susan Shaheen, co-director of the Transportation Sustainability Research Center at the University of California, Berkeley. Individuals who enjoy the cost savings, convenience and other benefits of a car-sharing service, she says, often end up deciding to “sell or postpone a vehicle purchase and use other modes of transportation more often.”

Project 100’s launch comes amid a growing number of bike- and car-sharing services worldwide. As many as 300 bike-sharing systems are in operation globally, and the world’s largest program, in Paris, has 20,000 bicycles. In most cities, an operator provides bikes in exchange for ad dollars, and bikes are free for the first 30 minutes. Car-sharing services like Zipcar, meanwhile, have more than 2 million members, and Navigant Research, a market research firm based in Boulder, Colorado, predicts membership will grow to more than 12 million by 2020. Car2go, a car-sharing service from the automaker Daimler that lets members pick up and drop off its Smart Fortwo cars anywhere within a set area (rather than a specific parking space like Zipcar), now operates in 22 cities around the world. Its membership has grown from about 60,000 users in 2011 to more than 275,000 at the beginning of this year.

What's different about Project 100 is its plan to combine so many modes of transit and add hired drivers to the mix. Like Car2go, Project 100 plans to offer vehicles for one-way trips, so users can pick up a shared car at one location and return it at another. But whereas Car2go charges by the minute—38 cents in Austin, Texas—Project 100 plans to charge customers a flat monthly fee. Ware, who led Zappos’ product development for 10 months before Hsieh tapped him to work on Downtown Project in 2011, says a set of local solar plants are slated to provide clean power for a charging station for Project 100’s electric cars.

The service is on track to become one of the largest real-world deployments of what transportation scholars call Mobility on Demand. First articulated by researchers at the Massachusetts Institute of Technology's Smart Cities Research Group, the concept calls for making a variety of shared vehicles available for spontaneous use: ultra-compact electric cars and scooters that can be rented for short errands, for example, or bicycles that can be picked up in one neighborhood and dropped off in another. The whole system hinges on one-way rentals and prices that rise in response to higher demand.

Proponents of this type of service hope batteries in the electric cars will eventually be able to store renewable energy for the power grid. More immediately, the goal is to solve the so-called "first and last mile" problem of public transit, connecting residences and work places with transit stations to eliminate the need for personal cars.

Project 100 is looking to bridge even wider transit gaps in Las Vegas by extending its service all the way to the urban fringe. "We're starting with Vegas, but if you look at Phoenix, Raleigh, and lots of other cities in the United States, you have this urban core and then around it you have a residential area with mostly single-family homes and low-rise condos,” Ware says. These outer neighborhoods are often poorly served by city transit lines and untouched by traditional car-sharing services, which tend to concentrate on densely populated urban cores and college campuses to ensure back-to-back bookings. "Project 100 is meant to not only increase the connectivity of the urban core itself,” Ware says, “but also to increase the accessibility of that core to people who live one to two miles beyond it." 

It’s a risky and potentially costly plan, says Ryan Chin, managing director of the City Science Initiative at the MIT Media Lab. Maintaining a small, densely populated area of operation ensures shared vehicles are never far from where they need to be to meet demand. But if shared vehicles and bicycles can be taken to far-flung residential neighborhoods and left there, Project 100 may need to pay to haul them back downtown for the next user.


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