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)

(Continued from page 1)

Chin says this redistribution problem is shared across most existing car- and bike-sharing systems. Barcelona, for example, loses 17 million Euros a year moving bikes around to make its bike-sharing system work, Chin says. “They make the argument that it's a public good so it's okay to lose money."

"Car2Go claims it doesn't have a redistribution problem,” he says. And earlier this year Daimler said the service was profitable in at least three cities. Nonetheless, if you don’t have a redistribution problem, Chin adds, “then you probably have an underutilization problem."

For any on-demand system to work, Chin says you need to manage vehicles based on empirical knowledge about where people are coming from and where they're going so that you can be sure to have available options for transit and parking. " Refueling or re-charging cars is actually secondary to parking," he says. "Pick-up and drop-off are the biggest issues, so if people are going to be using the system to get from residential areas to the core, then you need to make sure that there's enough parking once they get there." 

That can also be expensive, according to Chin, especially since cities don't want to lose the profit they would get from paid parking just to help a for-profit company get more members. "They should probably be targeting moving those people in, closer to the core, instead of figuring out how to get people between that ring and the core," Chin says.

The local government agrees, and is working with Downtown Project to draft policies that will increase density downtown and encourage Las Vegas residents to avail themselves of alternative transit options. "Downtown Project's efforts fit into elements of the city’s strategy for sustainable development," Tom Perrigo, sustainability officer for the city of Las Vegas, says. Perrigo notes that city agencies as well as the Regional Transportation Commission of Southern Nevada (RTC) have worked with Downtown Project to develop new infrastructure, including bus-only lanes that support express bus service, bicycle racks and electric vehicle charging stations, among other projects.

"With time, the City will develop a new form-based zoning code for Downtown that will provide standards that promote increased density and connectivity, new gathering spaces, and more efficient resource utilization," Perrigo says. 

For Ware and the Downtown Project team, the venture will be worthwhile if it gives rise to a more free-flowing community. “There’s this friction in getting around that impedes peoples' ability to connect," Ware says. The Project 100 transit network is meant to eliminate that friction, in part by making transit options so ubiquitous that a ride can always be found within five minutes, and by offering mobility as a full-service package.

"What's happening in Vegas is an exciting and important experiment,” says Dan Isenberg, executive director of the Babson Entrepreneurship Ecosystem Project, which is working to spur entrepreneurship in communities around the world, starting with Milwaukee, Wisconsin. “But I worry about the fact that it involves so many changes."

Moreover, when Hsieh’s funding dries up, Isenberg says, “the real challenge will be how to make this self-sustaining.” For now, Project 100’s plan is to charge $50 per month for basic memberships affording access to the bike-sharing system, shuttles, and small electric city cars—enough to meet the occasional lunchtime transit needs of downtown workers. The next level, $150 per month, will add occasional use of the car-sharing system and drivers. Unlimited access will be offered for about $500 per month. That’s still $250 less than a typical American driver pays for maintenance and gas every month, according to the latest AAA figures, but perhaps too high for the service to gain the kind of widespread adoption necessary to have a real impact on energy used for transportation citywide.

Ware hopes the model will "eliminate the idea of a tariff or fare from the decision to move." If all goes according to plan, downtown restaurants that might seem too difficult or distant to reach from the Strip today, for example, would become readily accessible options for members enjoying a night on the town.


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