Las Vegas (Of All Places) May Be About to Reinvent Car Ownership

The all-you-can-move sharing system Project 100 launches this summer, but many questions remain.

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Flickr user nooccar

LAS VEGAS—When your boss is Tony Hsieh, it's not unusual to wind up in a bar for your last meeting of the day. This is the case one January night in downtown Las Vegas, where the CEO of Zappos is investing his personal $350 million fortune in building an entrepreneurial utopia in his company's image. Maybe the most ambitious piece of his vision is "Project 100," the code-name for a private car-, ride-, and bike-sharing service combining aspects of Zipcar, Uber, CitiBike, and RideScout scheduled to launch this summer.

While Hsieh holds court at Atomic Liquors, project leader Zach Ware debates with his team at a nearby table whether to keep a short-range electric car in its lineup, or switch to the larger (and more expensive) Mercedes-Benz Smart car. At stake is the project's vision: Will it be an amenity for downtown residents and Zappos employees, or should it aim to replace the car of any commuter in the entire 500-square-mile Las Vegas Valley?

In either case, Ware argues for the short-range electric — a light vehicle for zipping around a mile or so downtown — and when his colleagues counter that bike-sharing is better for those distances, he explodes. "I'm never going to fucking ride a bike!" he yells, more in emphasis than anger. After more fruitless back and forth, Ware stalks off to yet another meeting, demanding they reach a decision in his absence.

"Who are we?" asks Josh Westerhold, the company's head of business operations, over another round of drinks. "Are we a company that changes how people move, or a company that changes how car-ownership works? We may be trying to solve two different things."

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When Hsieh launched the Downtown Project in late 2011, he told anyone who would listen he would invest $200 million in real estate, $50 million in start-ups, $50 million in local businesses, and $50 million in schools. He also planned to move Zappos from its campus in suburban Henderson to a new headquarters downtown in the former City Hall, seeding the new landscape with its 1,500 employees.

In the meantime, he and his deputies got to work terraforming the area into a creative class company town replete with restaurants, bars, co-working spaces, and a "Container Park" guarded by a 40-foot-long praying mantis spitting fire from its antennae. When Zappos finally moved into its new digs last fall, employees found an urban playground waiting for them — and for the dozens of start-ups Hsieh's money has lured from other cities.

But despite Hsieh's best efforts at social engineering, the majority of Zappos employees still commute by car from the suburbs. This doesn't fit with Hsieh's image of downtown, which is based on what he calls the "three Cs:" collisions, co-learning, and community. Basing his theory on a close reading of Harvard economist and Triumph of the City author Edward Glaeser, Hsieh believes increasing the density of encounters will in turn accelerate the diffusion of good will and good ideas, making downtown more attractive to talented individuals in the far-flung corners of Las Vegas and beyond. One thing holding them back is the costs — real and psychological — of movement to and within downtown.

"No one knows what would people would do if those costs didn't matter," says Ware.

Project 100 intends to find out. Its name was derived from the quantity of each vehicle it intended to offer. That is, 100 Tesla S sedans equipped with professional drivers (a la Uber), 100 short-range electric vehicles you drive yourself (e.g. Zipcar or Car2go), 100 bicycles for sharing, and shuttles with 100 stops across the area. At launch, however, the service will be much smaller. No drivers, no shuttles — only a trolley car on an infinite loop and a handful of Teslas rentable by the minute or hour.

Pricing will follow a three-tiered structure with a la carte mobility options costing around $50-$100 a month and all-you-can-move usage pegged at around $500, roughly $250 less than the monthly cost of car ownership including gas and insurance, according to AAA. An app and underlying algorithms yet to be written will not only calculate where the nearest share station is, but also assign which mode to use. The latter is necessary to prevent members from hogging the Teslas; it's also such a daunting piece of software that, if it works, would give the project a considerable edge over competitors if and when it expands to other cities.

"Nothing has been built on this scale before," says Ware. That's not quite true; in Germany, Bremen successfully combined mass transit with car- and bike-sharing stations more than a decade ago through its mobil.punkt program, which today boasts 48 stations offering 180 cars to 7,600 members, taking 2,000 cars off the city's streets as a result, according to its website. Still, for American cities, Project 100 represents a strong step toward what has variously been called mobility on demand, mobility-as-a-service, and transmobility — a seamless mesh of modes comprising a single, fluid system.

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Project 100 aims to control the entire multi-modal experience, from the vehicles operating on Vegas streets to the eventual drivers — who will be full-time "concierges." Still, it wants to play nice with local agencies, including the Regional Transportation Commission of Southern Nevada (RTC), which is responsible for planning and funding the metro area's buses, roads, and traffic management. The project's original vision, after all, was a last-mile solution for commuters arriving from the suburban periphery. How do you make the priorities of a public agency mesh with a private service conceived as a sweetener for those living or working downtown?

One afternoon, I joined Ware, Westerhold, and J.J. Todd, the project's legal counsel, as they discussed the finer legal points of the trolley service they intended to offer as a sort of beta test. The idea of a downtown "circulator" bus had been floated with the RTC and ultimately had been incorporated into the project. As Ware and Westerhold pondered various aspects — should it be free, and invite-only, and make scheduled stops? — Todd considered the feasibility of each and either dismissed it out of hand or suggested legal tweaks.

A map of some of RTC's current routes in downtown Las Vegas. (Courtesy RTC)

One issue was where the trolley would stop; a nest of regulations narrowed their options. Someone suggested using RTC's own stops, pending permission. But would that require a usage fee, a la Google's $100,000 deal with San Francisco? No one knew. (And neither does the RTC: "I don't think we've looked into it in detail as a way to capture value," says David Swallow, RTC director of engineering for capital projects. "But in general, we look at ways to partner with the private sector, given that it doesn't interfere with our regular routes.")

At the end of the day, the project doesn’t answer to the RTC. Still, before it can launch, it must file an application with the Nevada Transportation Authority (NTA), which regulates motor transportation. A stand-alone trolley won't be a problem, says Todd; that will only require approval from the Nevada Department of Motor Vehicles. Neither will bike-sharing nor Tesla rentals — Zipcar is perfectly legal in the state. It's only when you stick your own driver behind the wheel that things get a little dicey.

Just ask Uber, which attempted to kick the regulatory door down here two years ago. Classified as a livery service, its appeals to sidestep Nevada laws requiring passengers to buy at least one hour at an average price of $46 were rebuffed thanks to pressure from the Livery Operators Association of Las Vegas (LOA). The company has publicly complained about being frozen out of the multi-hundred-million-dollar market ever since.

Taking pains to distance themselves from Uber, Todd and Ware insist Project 100 won't compete with the city's taxi companies and limousine services. "Their bread and butter is the airport and the Strip," says Todd, not downtown residents or suburban commuters. He says he's cordially discussed the project with his counterpart at the livery association (representatives of the NTA and the LOA did not return calls in time for publication).

Despite their apparent deference, the "D" word — disruption — keeps creeping into Project 100 conversations. Todd was hired in part thanks to his compulsive habit of renting a different fuel-efficient car from the airport each evening at rock-bottom prices, replacing his gas-guzzling SUV while earning enough airline miles to fly his wife everywhere for free. He and his colleagues bring a similar glee in gaming the system to the task at hand.

"It is a very fine line between reading the statues and finding a way to fit, versus also toeing that line to demonstrate there are other options that are going to be good for the community," says Todd. "We can make transportation better, and it may not fit with existing regulations in the state, but we're going to provide a benefit. 'Where do we push and how much do we push it?' is a question I ask myself every day."

Which returns to mind the question of which "community" Project 100 will embrace. Well-to-do start-up employees capable of footing $500 a month for membership in a sharing system are one thing, but a third of the city's downtown population lives below the poverty line. The equity of running a private mobility scheme that leverages public infrastructure is another outstanding question running beneath Project 100. In treating Las Vegas like a transportation tabula rasa, the project might be wiping the slate of many residents who make up the city it hopes to improve.

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Later that afternoon, Matt Dengler and I took one of the company's pair of Teslas out for a spin. Our smooth, nearly silent ride down empty streets was punctuated on occasion by Dengler mashing the accelerator to the floor, producing the gut-churning torque electric cars are known for.

Plans for Zappos's campus downtown Las Vegas. Courtesy of the architects.

Dengler, the twenty-something in charge of the project's auto lineup, explains that his other car is with Tesla at the moment being outfitted with sensors. When Hsieh's order for a hundred of the cars was announced, a number of journalists (myself included) made hay of the fact he was paying list prices — $62,400 and up — despite his volume purchase. Instead of a discount, he bargained for a degree of telemetry data unprecedented for a car-sharing service. If one of Project 100's members were to replicate our stunts on I-15, for instance, it would instantly trigger alarms back at headquarters. And even during normal operations, it will log the car's conditions and whereabouts in real-time.

For all the attention given to the project's choice of electric vehicles, the decision ultimately had less to do with sustainability than information. Every mode is a rolling data collection device — even the bicycles have on-board GPS. This is essential in two respects.

First, as a monthly subscription service, the project's revenues are capped, while member usage is theoretically unlimited. This places a premium on the ability to shape demand and manage assets. For example, bike-sharing programs in New York, London, and Paris have all struggled with redistribution, while Barcelona's reportedly loses 17 million euros a year doing the same. Although Project 100 expects to post losses at the outset, it can't afford to simply write them off indefinitely as a public good. One way to cope with pockets of high and low demand is to steer members to the nearest/easiest/cheapest option at hand, courtesy of its smartphone app. Rather than redistribute vehicles after the fact, it can attempt to regulate their usage beforehand.

In the same way, the system might plan its own expansion. As Westerhold explains, the project intends to construct an "agent-based model" — essentially a stylized game of SimCity populated by algorithms instead of people — capable of simulating members' current travel patterns and projecting where they might go. "We've become a transportation planner in some ways," he says, "but we're trying to do it in a way that's real-time and flexible as opposed to a fixed bus line or train route."

Project 100 was in talks with two companies to build such a system at the time of my visit in January. Westerhold was leaning toward McLaren Applied Technologies — an offshoot of the Formula One racing team — but had also given consideration to BoldIQ, whose modeling software was the result of more than a decade of work at the failed air taxi service DayJet. The decision has since been made to develop it in-house. Given the enormous complexity involved, it’s an open question whether the project can.

Add it to the list of the project's open questions, still none bigger than one Westerhold raised at Atomic Liquors that night: Who will the project serve? Hsieh's hand-picked downtown residents? Or potentially anyone? Especially as the project expands to other cities, Westerhold can imagine a series of hubs and spokes, with cars-and-drivers ferrying members to dense nodes where bike-sharing and other modes are available. Then again, if the answer already existed, Project 100 might not need to.

"How can we incorporate the inner-ring suburbs into the city?" he asks. "That's a nut no one has cracked."

This article is part of 'The Future of Transportation,' a CityLab series made possible with support from The Rockefeller FoundationLindsay's reporting was also part of the Rockefeller-supported NYU Rudin research initiative called Re-Programming Mobility, and he's previously written about Project 100 for the New Cities Foundation.

Top image via Flickr user nooccar.

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