Friday, January 20, 2012

Ten Years Ago: Taxi 2000 Corporation's Business Plan

Last month, the Fridley Patch had an article about the Taxi 2000 Corporation. In the article, one of the investors described the would-be pod vendor as "moribund".

Ten years ago this month, January 31, 2002 to be exact, Taxi 2000 had the following "Business Plan" on its website - it's still available on the Wayback Machine:

The Problem We Propose to Solve

A major problem cities face today is congestion. Public opinion surveys confirm that, in the eyes of city dwellers, congestion often is perceived as the most important urban problem. Current modes of public transit date back to the nineteenth century. They offer poor levels of service and consume tens of billions of dollars in operating subsidies. The huge costs to build rail systems generally result in transit systems that connect only a few origins and destinations, and do not induce significant ridership because they are unable to compete with the convenience and flexibility of autos. This further exacerbates the need for greater government subsidies. The bottom line of current urban public transit is huge costs and poor service. This is the reason why public officials are not able to provide relief for the problem. No matter how much public investment flows to conventional public transport, the main problem – congestion – will remain if a new solution is not found.

What Is PRT?

PRT (Personal Rapid Transit) is a system with small driverless vehicles running on demand on a guideway, offering individual trips without stops. PRT has no timetables and no fixed routes. The vehicles wait at stations for passengers, departing when a passenger boards. He or she travels alone or with companions of choice. The vehicle’s computer determines the most rapid route and the vehicle makes no stops until it has reached its destination, resulting in consistently short travel time. These service characteristics are comparable to an automobile. In downtown areas PRT travel times will be much less than travel by automobile or walking, resulting in high PRT ridership.

Why Taxi 2000?

Taxi 2000 (PRT) technology is an elaborate creation utilizing “least-cost strategy”. Installation costs are a fraction of any existing rail technology. Operating costs are well below any current mode of public transit (including buses). As a result, Taxi 2000 PRT can provide much more comprehensive system networks per dollar of capital investment.

axi 2000 PRT offers compact unobtrusive elevated guideways carrying small-scale vehicles with seating for up to three people. The system is fully automated. Modular stations may be stand-alone or due to their small size located in commercial buildings, hotels or parking ramps. Station density in the network is very high, resulting in a much higher level of rider convenience at both ends of the ride. All rides are private, on-demand twenty-four hours per day, direct to destination without transfer.

Large Taxi 2000 PRT systems run at a profit. This allows for system network expansion funded by system profits. Government funds are not necessary for installation or subsidizing operation. Thus, public entities or private interests may own and operate systems.

Taxi 2000 Corporation will receive revenue from two primary streams, system installation management fees and control system software leases. Revenue flowing from secondary sources will include training fees for system personnel, system operation fees, if contracted to operate systems, and ownership of some systems.

The Market

The market for Taxi 2000 PRT is several hundred billion dollars worldwide. On a weekly basis we receive application inquiries from throughout the world (every continent except Antarctica). Taxi 2000 currently enjoys broad-based support from citizen groups throughout the U.S.

Whoa! "broad-based support from citizen groups" REALLY? I don't recall any of that support.

Marketing Strategy

Taxi 2000 PRT will be marketed to both public and private entities. The huge cost advantage in installation and operations, as well as a much higher level of service, will allow us to successfully compete against currently vested urban transit interests. The greatest obstacle to overcome is institutional resistance to change, and heavy lobbying by existing transit systems and the consulting engineering firms supporting them.

We will focus our educational and sales campaigns on communities with the greatest potential for early applications. This effort will be directed toward the general population, citizens groups, legislators, government officials and business interests. The goal is to impart a thorough understanding of Taxi 2000 technology and its cost effectiveness. Our application sales engineers, some of the best in the world, will benchmark our technology against the competition and demonstrate its economic feasibility in a variety of environments. Many of our early deployment opportunities will be in situations where bus and rail systems are unworkable as solutions.

We will also create partnerships with several of the major transportation engineering-consulting firms in the world

Here the "Business Plan" includes the lengthy bios of J. Edward Anderson, A. Scheffer Lang and Raymond A. MacDonald. Then it gets around to... the money:

The Taxi 2000 business plan requires funding of twenty-five million dollars to be raised in successive rounds over a thirty-six month period. The funds will be used for completing specifications, building of the test track facilities, world-class procurement and marketing.

Exit Strategy

The opportunity for investor exit should occur between months 54 and 72. At this juncture, Taxi 2000 should have a strong backlog of booked sales, as well as a substantial number of highly interested potential customers. Initial system installations should be complete and operating, with other systems under construction.

Two potential opportunities for investor exit will be an IPO or a strategic acquisition by a large corporate interest. The strategic acquisition of the investor position would be the more likely scenario but this would be determined by the climate of the public equity markets at that time.

Interesting - a business plan with an "Exit Strategy"?.... anyways, according to Mpls/St. Paul Business Journal:

The firm has raised $2 million in a $24 million fund-raising effort to pay for the testing facility and other corporate needs, according to SEC filings and city documents.

Then there was that nasty lawsuit in 2005 and multiple, failed attempts to grab some taxpayers' money. I wonder how those early investors feel now?

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