Despite Elon Musk’s latest move.

By Aric Jenkins
August 10, 2017

Hyperloop One’s founders are on their way to revolutionizing transportation the way the Wright Brothers did when they invented flight.

At least that’s the comparison co-founder Shervin Pishevar likes to make when talking about the success his Los Angeles-based startup has had on a test track in the Nevada desert. There, the company’s aerodynamic XP-1 pod has traveled down a depressurized tube at nearly 200 miles per hour, which is almost triple the speed it hit during its first full-scale test in May. The goal is to get the pod to fly down the line at the speed of sound—roughly 700 miles per hour—and make way for a faster, cleaner, and cheaper way to travel.

The startup’s test track is the first operational hyperloop in the United States, though Pishevar and co-founder Josh Giegel crowdsourced the actual idea from Tesla and SpaceX CEO Elon Musk. In 2013, Musk detailed an ultrafast transportation system using electromagnetism in a near-vacuum environment in a white paper that he initially said he was too busy to create himself. A crop of hyperloop startups have since emerged, but Pishevar and co-founder Josh Giegel are at the front of the pack.

Fortune recently caught up with Pishevar, an investor who handles the business side of the company, and chief engineer Giegel in New York City to talk about the company’s overall momentum, including the next round of testing set to take place “within the next couple months.” Giegel said that the upcoming tests are particularly focused on perfecting the hyperloop’s airlock design in order to get pods effectively in and out of the tube. That will be essential, he said, if and when stations are designed to board passengers.

Giegel also claimed that the system is already capable of traveling at supersonic speeds — it’s merely restricted by the length of their DevLoop test track in Nevada. “If we were to build out another two kilometers, then we could get up to 700 miles per hour,” he said. For now, Hyperloop One’s engineers are determined to test 85% of the system on the 500 meters of track they already have.

It’s worth nothing that a few days after Hyperloop One announced the news of their second test, Bloomberg revealed Musk’s intentions to build his own hyperloop, which The Boring Company — one of Musk’s startups focused on tunneling infrastructure — later confirmed.

Pishever and Giegel have not answered questions about this development, nor did any of their team members during a recent Reddit AMA. But the company’s answers do indicate that Hyperloop One doesn’t have plans to slow down.

When do you realistically expect to be able to test a human being in a pod?

JG: [laughs] Probably sooner than everybody thinks.

SP: We’ll come back to announcements about that, it’s obviously something we definitely want to do. We can’t comment right now.

JG: On this particular test we had something like 150 sensors all over the vehicle, so we know very well what the rider experience would be like inside of the pod.

Do you have any idea what speed you’d want to test with humans inside?

JG: Right now, humans don’t care about speed. They care about the acceleration, so we’ve done a couple different tests where we accelerate around 2 Gs. That’s like zero to 60 in a little over a second, so sport mode.

On CNBC you said that the hyperloop would be the cheapest transportation in the world. Who is that cheap for, exactly?

SP: That’s a great question. What we’re trying to accomplish is the cheapest, fastest, cleanest form of major public transportation. There’s economic value in being able to move people and things fast – and without any delays because the hyperloop is impervious to weather. You can live and work anywhere, whether it’s in Philly, D.C., New York City. You’ll be able to spread across regions versus being highly-localized into urban centers. It adds up to savings, productivity, and efficiency.

Is this something that costs $2.75 like the subway here in New York? Are they Amtrak-like prices? Or, given similar speeds, are they more like an airline prices in the hundreds or thousands of dollars?

SP: The actual prices are to be decided, but the goal is to get it to be something that’s affordable, more like a Southwest Airlines ticket. You want to be able to move people and things between cities in a way that turns those cities into metro stops, so it’s not a replacement for subway systems. So whether it’s a 100-mile or 300-mile distance, collapsing that into a shorter distance and making it cheaper than airlines and high-speed Amtrak trains is definitely an area we want to go. The other thing has to do with concepts we’ve coined, called regulatory arbitrage and adjacent subsidization. An example of that would be Uber Black and UberX. Uber Black subsidizes the cheaper version — whether it’s Uber Pool or UberX — and allows it to be more affordable for people. At the point when you’re getting to Uber Pool prices, you’re around the price of a bus ticket in the city.

JG: If you look at those modes of transportation, they all come out to be about 10 cents a kilometer — which is what the passenger pays for. On airplanes you might pay eight cents a kilometer, depending on how that goes. But our system target is that 10 cents range because that’s currently what the market is paying.

SP: One thing that is important to clarify is that we are a technology and intellectual property company, so we don’t really want to operate these lines — we want be a platform for other companies. So this should be thousands of companies around the world that get built on top of our technology. This is a multi-decade effort. The pricing is going to be determined by the local economic realities of each of those operators.

What did you think about Elon Musk’s announcement on Twitter saying that he had “verbal government approval” to build a hyperloop between New York and D.C.? Did you have any idea he was going to say anything like that?

JG: I was at a test site until 3:30 a.m. and I got a call at 8 a.m., so I didn’t know he was going to say anything [laughs].

SP: We’re very focused on building overground and underground solutions. What he was talking about was tunneling, so if you look at that and you look at the video from the TED talk, it’s very much centered on electric cars on sleds. There’s going to be many different applications. We’re very focused on building the hyperloop. And the hyperloop is exactly something we’ve described as an actual tube with levitation propulsion and a vacuum that essentially vents around sky inside the tube flying at 200,000 feet. That to us is the hyperloop, and we’re the only company building that. Tunneling is for long distances, not necessarily the most economically feasible solution. But like we said, there’s going to be many different form factors and applications of it.

If he did get that approval, would that be something that you would expect or hope to work with him on? Or do you see yourself as competitors?

SP: Not necessarily. If there’s a car company, and you have another car company, you don’t stop building your car and company because there are others. For us, the world’s a very big place, the planet’s very big, and infrastructure takes a long time. These are also public projects, so there will be a bidding process for these routes, all of which are still years away. It’s going to take an incredible effort.

How do you ensure your company stands out and is ultimately profitable?

JG: I just finished a super fascinating book on the Wright Brothers. They’re the guys that first did it, but we don’t fly on Wright Brothers airlines. It seems like they kind of just stopped innovating. So for us, we have to continue to innovate. That means we get the best people, we push the boundaries by actually building and testing because good engineers like to build things—they don’t want do it on paper. We also need real world projects, whether it be Dubai or in Europe or the U.S. These give us an opportunity to go and deploy this throughout the world. If we stagnate in terms of what we’re developing, then yeah, those competitors are going to pass us by. There was something like 100 car companies at the turn of the 20th century.

SP: And the difference is, we’re the only company that’s actually building it and proving that it works.

Surely that gap will close at some point, though, right?

SP: Yeah. But competition is a good thing.

This project is almost certainly going to need government money. What do you say to local communities you are competing with for funding?

SP: This is a case study in the economics of work and the economics of cities, and I think we’re moving into an era where the challenges that are going to happen because of automation — the types of jobs that are going to be available — is going to create a lot of societal and economic pressures. You have to be able to bring technology to the forefront and allow economic opportunity to be more equally spread. If you look at Detroit right now as an example, there are vast swaths of Detroit that have been abandoned. If you were able to connect Detroit to places like Chicago, you could potentially bring a lot more economic opportunity investment to it.

JP: Roman roads, Spanish ships, English trains — the whole thing — allowed GDP to shoot through the roof, and by connecting people in that way and by saving time it just continues to allow people new opportunities.

The Olympics are in Los Angeles, 11 years from now. Could hyperloop help the transportation out in any capacity?

SP: Well, early on we met with some of the leaders of the Olympic Committee in L.A. while they were bidding for it. We were incredibly excited, again to the point we were talking about being able to spread the economic impact in a positive way to a wider region of greater Los Angeles. Also, the strains on the transportation systems that are going to happen need to be relieved. But you could have an Olympics that could potentially spread those activities and events to a wider area versus localizing them into downtown areas. And that could create a lot of jobs, so we’ll see. There’s nothing concrete, but you never know.

This interview has been edited and condensed for clarity.

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