The demise of Hyperloop One and the future of high-speed transport
While Marketplace’s Lily Jamali was at CES last week in Las Vegas, she took her first ride on the Vegas Loop, built by Elon Musk’s the Boring Co.
In 2013, Musk floated the concept of a hyperloop as a way for people to travel long distances at superfast speeds via pods in vacuum-sealed tubes. The Vegas Loop, as Lily found out, is not that.
Developing actual hyperloop technology is hard and costly. Just ask Hyperloop One, a startup that recently shut down after a decade of trying.
Lily recently spoke with Bloomberg’s Sarah McBride about Hyperloop One’s demise and what it means for the tech sector’s larger ambition to create hyperloop transport systems.
The following is an edited transcript of their conversation.
Sarah McBride: They had trouble establishing credibility. And the second thing was the technology was so advanced, people kept doubting that it would ever get done and nobody took that leap of faith to build it. So this is a company where in its very earliest days, there was a bizarre situation where the chief technology officer and co-founder [Brogan BamBrogan] came in to work one day and found a noose curled up on his desk. And there was a lawsuit, all the co-founders suing each other, that guy [BamBrogan] eventually got fired. Then there was a former executive from Cisco running the company. He left. They brought in a former executive from the high transit system in Hong Kong. He ended up leaving. A guy called Josh Giegel, he ended up leaving, so there were a lot of huge egos. And they built a test track, but a test track is very different to a functioning Hyperloop.
Lily Jamali: Yeah, let’s talk about that because I distinctly remember in 2016, all these [San Francisco] Bay Area tech reporters making their way down to Las Vegas, en masse, to watch the first Hyperloop One safety test. And the idea seemed to have so much promise then.
McBride: Right. So that was just a little track, I think it was perhaps about a mile long, and the idea for Hyperloop at the time was to go hundreds of miles. They later scaled that down a little bit and said it would be for freight, not for people. But part of the reason they had to do that was the danger to people is considerable [while] traveling in a hyperloop. People would travel in little pods that would itself be in an enclosed tube. But the tube would be at vacuum conditions or near-vacuum conditions. And that would enable the pod to travel with no friction. Technically, those challenges could have been overcome. But the problem is, if humans are exposed to vacuum conditions, it has a really bad effect on your body. The pressure in your eyes, for example. I mean, how gross do you want to get? Basically your eyelids pop out and your blood boils. But even just going to freight cargo, they could never quite get anybody to make the hundreds of millions of dollars of commitment it would have taken to build just one of these.
Jamali: Well, I want to ask about your experience covering this company Hyperloop One. What has it been like to cover it and watch its development these last many years?
McBride: You know, I have to say there’s something so captivating about the idea [of] traveling at these intense speeds without having to get on an airplane. Their initial promise was cities like L.A. to San Francisco in, you know, less than half an hour. The problems, though, are so many. It’s not just the technology, it’s the regulation. Another company tried to build a small, similar system, just in a part of Los Angeles, and they got sued to Kingdom Come. There’s this dream, and then it butts up against the reality of nobody wanting one of these things in their backyard.
Jamali: I was struck watching you on Twitter saying you’re going to actually miss covering Hyperloop One when you were sharing this article about them shutting down. What are you going to miss?
McBride: Just the big dream of it. Just the idea that you’d possibly be able to step into a pod in a city like San Francisco and be in L.A. a half hour later without ever having to go to an airport. But you have to be realistic, and a company trying something like this has to be prepared to talk about the regulation and the technical challenges, and they weren’t always prepared to face the criticism, which was too bad.
Jamali: I wonder if there is a bigger lesson to draw from the death of Hyperloop One, from that company? Does it say something about the state of the tech industry right now?
McBride: Yeah, I think there was a time when if you had enough force of personality, you could raise money and keep going, and now money is really tight. Venture capital fundraising is way down. Venture capital spending is way down. There haven’t been huge [initial public stock offerings] of venture-backed companies in the past couple of years. That said, I just talked to a Swiss hyperloop company, Swisspod, that just raised $2 million in December. So there are still people trying, but it’s really different to raise a few million dollars and have some design prototypes compared to actually building a functioning hyperloop that can take passengers.
We can add Hyperloop One to our list of recent segments on this show on tech projects that are dead — or might be down the road. Like Netflix’s DVD service, which died last year, and the metaverse, whose prognosis is alive, but barely.
In case you missed it above, Sarah McBride’s article on the closing of Hyperloop One includes a photo from way back in 2016 during the first run of the propulsion system at the startup’s test site in North Las Vegas. According to PitchBook, Hyperloop One managed to raise more than $450 million since its founding a decade ago.
Meanwhile, TechCrunch reports the company’s death could be good news for high-speed rail in California, a perennially argued-over project here in the Golden State. The idea for hyperloop reportedly came from Musk’s hatred of California’s proposed high-speed rail system. The Joe Biden administration recently announced $6 billion in funding for it.
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