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Types of Companies and Capital Flow

Three Types of Companies and Three Types of Capital

There are 3 ways capital will be cycled in deploying JPods networks with 3 types of companies to utilize capital.  These are very similar to how the Transcontinental Railroads, Internet and cell networks were deployed.

Three Types of Companies:

As with building the Internet and Transcontinental Railroads, companies must be created to fill specific niches:

  • JPods Inc. JPods profits by creating and enforcing technology standards that are desired by the farebox payer.
  • Master Mobility Companies® (MMCs) are licensed to build JPods networks within specific legal jurisdictions. They are the experts in building under the laws of that jurisdiction. MMCs profit by
  • Local Mobility  Companies® (LMCs) are licensed to own and operate networks within a specific economic community.

Three Types of Capital:

There will always be multiple types of capital used to meet specific objectives.  But in general there are three categories of how capital will be used to constrain risks and reward capital as the following illustrates and explains. It might require reading the explanation below to understand the cycles in the graphic.

CapitalFlowTypes

 

  1. Kitty Hawk Networks are starter efforts that will be founded depending on some combination of local interests, technology partners, investors, etc....
    • $3 million to buy a Kitty Hawk Network (KHN, a fully functional commercial grade network).
    • $2 million to operate the KHN, pass the Performance Standards Law, and perform the geotech for a larger commercial network.
  1. Master Mobility Companies will use Construction Capital to build networks. Construction Capital can be from equity and short term bonds (one, two, and three years).

Master Mobility Companies will operate with 52 accounting cycles per year. Networks completed each week will be sold that week to LMCs to operate. These weekly accounting cycles forces internal disciplines that nothing waits.

The cycle for building rails is six to nine months from survey to construction to certification and sale to an LMC. Once manufacturing is fully ramped, an MMC should be able to certify rails at the rate the Transcontinental Railroads were built in the 1860s of 3 to 10 miles of rails per day per crew.

As networks are certified, Construction Capital will be repaid or recycled to build more networks depending on the specific agreement with the source of the Construction Capital.

  1. Local Mobility Companies (LMCs) will use:
  • Walk-around Capital. This is $5 million to install and operate a Kitty Hawk Network to open a specific market. Kitty Hawk Networks are approximately 300 meter fully functioning networks that can be applied in a limited niche. This can provide barrier crossing, such as crossing a freeway between two malls. The cost of the Kitty Hawk Network is $3 million. The LMC will have $2 million to operate the network and get Rights of Way access to expand networks.
  • Asset capital.  Networks built by MMCs will be sold to LMCs to operate to service the fare box payer. Asset Capital may be a combination of equity capital and long term bonds (3-year, 10-year, 30-year). Asset Capital is rewarded by converting 90% of current urban mobility costs into value and customer savings.

Kitty Hawk Networks can be deployed reasonably quickly in the following locations:

  • Secaucus, NJ, Performance Standards Law passed, 2014-23.
  • San Jose, CA, private land.
  • Somerville, MA, Performance Standards Law pending as Massachusetts Senate Bill 
  • Medley, FL, verbal agreement from the Major. Expect law in May.
  • Bloomington, MN, verbal agreement with SMAAASH
  • Bengaluru, India

 

  • Greenville, SC, video prepared by the county government on PRT
  • Atlanta, GA, collaboration with Airport West Economic District.

The objective each of these Kitty Hawk Networks is to contain costs while opening the market to deploy high valued networks such as airport economic communities.       

Background:

A good book to read on financing the Transcontinental Railroads is Nothing Like It in the World, by Stephen Ambrose (link).

Why:

Life requires energy. Increasing the energy efficiency of highly repetitive urban mobility by 10 times (10x) converts 90% of costs into profits and customer savings. This applies to people, cargo, and waste.

Metrics:

  1. Economic work accomplished per unit of energy consumed:

     

    vehicle-mile cost

    Passenger-mpg

    Seats/hour/lane

    Headway

    Speed mph

    Mode-Deaths/Year

    JPods/PRT

    $0.04

    264.4

    28,800

    .5 sec

    30

    zero since 1975

    Commuter rail

     

    38.2

    1200

    10 min

    24

    743

    Cars

    $0.59

    32.6

    4800

    3 sec

    18

    34,624

    Buses

     

    27

    600

    5 min

    8 to 12

    44.2

     

     

    $/vehicle-km

    Passenger-km/liter

    Seats/hour/lane

    Headway

    Speed (km/hr)

    Deaths/Year

    JPods

    $0.025

    112.3

    28,800

    .5 sec

    48.3

    zero since 1975

    Passenger trains

     

    19.7

    1200

    10 min

    29.0

    743

    Cars

    $0.380

    16.8

    4800

    3 sec

    38.6

    34,624

    Buses

     

    13.9

    600

    5 min

    19.3

    44.2

 

  1. Profit per trip (passengers and/or cargo). Profit is the difference between the value customers willingly pay minus the cost to compete. This is a critically important way to look at profit as different customers have different value expectations. Specific example at an airport complex:
    • Business traveler will easily pay $5 to travel from their airport hotel to the airport 2 miles away because of the convenience and certainty of making their flight.
    • The hotel housekeeper might pay $80 per month for a trip to a station along the same route to the airport.
    • Trips will also cost differently based on time of day. A trip during peak hours might cost 2-3 times what an off-hours trip would cost.

Focusing on value supports both service to customers and rewarding capital more quickly so more capital will flow into the system to build networks faster.

 

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