Error in calculating Hyperloop ticket price

The semi-technical document on the Hyperloop mass transport system, recently produced by Elon Musk, estimated the price of a one-way ticket as $20.

Transporting 7.4 million people each way and amortizing the cost of $6 billion over 20 years gives a ticket price of $20 for a one-way trip for the passenger version of Hyperloop.

Multiply 7.4 million trips by two then by $20 over 20 years and you get $5.92 billion dollars which is about the $6 billion estimated cost of construction of the Hyperloop. So $20 is the price at which the cost of construction (very simplistically) is returned in 20 years.

The amortized cost is not the ticket price, which must necessarily include such costs as management, operations and maintenance, and financial costs such as interest on loans and profits to shareholders. Thus the actual ticket price of a fully private venture would be comparable to an airfare, at least $100 say.

The Musk document is poorly worded at best or misleading at best. Major media outlets universally quoted a ticket price of $20.

According to New Scientist

He also estimates that a ticket for a one-way Hyperloop trip could cost as little as $20, about half what high-speed rail service is likely to charge.

The Telegraph:

Hyperloop would propel passengers paying about $20 (£13) in pods through a 400-mile series of tubes that would be elevated above street…

The Washington Post

How the Hyperloop could get you from LA to San Francisco in 30 minutes for $20.

USA Today, Huffpost, Fox News, and all of the internet tech blogs simply repeated the same story. While this is one more example of the total absence or research in the media, the blame also surely rests on Musk, who should correct the misrepresentation immediately.

20 thoughts on “Error in calculating Hyperloop ticket price

  1. This also assumes that the energy utilized to transport Mr. Passenger from A to B is so cheap that it’s cost does not need factoring in. Is Elon Musk on to some type of over-unity machine? I suppose he also believes in the aether, phlogiston and flying pigs.

  2. At $20 demand would be much higher than 7.4M tickets/y. Say 20M tickets/y is more accurate. Then the 30 seconds between capsules would have to be reduced to 10 seconds. If that is possible then $20 x 20M = $400M/y which is probably fine for operating costs. In truth this would be much BETTER than typical high-speed rail systems which have government-subsidized operating costs.

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