2005-08-14

Hitchhikers of America - a business concept

A lot of resources are wasted everyday, especially on the American highways. The 6-lane highway is fully packed while the HOV (high-occupancy-vehicle) lane 2/3 empty -> SOV (single-occupancy-vehicle) represents 18/19 or 95% of the traffic volume on the road!

Ride-share or today is hard to use and requires tedious co-ordination and planning ahead. Total inflexibility. However, now we have the technology to solve the problem. We can take Ride-share to the mobile internet platform, use eBay like software to match riders and drivers, and GPS/mobile phone locational service plus google maps to identify locations. (Share-Ride-on-Mobile-Internet or Sromi - you can't slow me just because I hitchhike :) ) Use your mobile phone, send a request for driver or search for rider any time you are ready to go. When you find your counter-part, one button and you can talk and fix a place to meet.

  • eBay and Google Maps have made the technology totally feasible
  • SMS and 3G brings the internet to our mobile phone
  • => to implement the taxi-GPS pick up system is cheap and easy on our mobile phone, just a simple software is needed (locational service from mobile operation is a plus)
  • with gas price approaching $3/gallon, more people are willing to take mobile-ride-share
  • enables ad-hoc driver-hitchhiker match up in real time, saves time to wait
  • and...meet new friends who share the same concern for environment :)
There are a few small problems though. e.g., How should I trust a total stranger?
  • eBay's has taught us a good lesson, use a peer-reviewed rating system
  • If one can trust a money transaction, why not one with car license plate, mobile phone number (we can also ask this information to be verified) and peer rating?
  • Furthermore, the passenger can choose the age/gender of the driver, so that no young girl will be driven by suspicious male, for example

How do we encourage drivers?

  • we can establish a pricing standard, where the hitchhiker will pay the driver the price of gasoline equivalent. e.g., $1 for 0-10 mile, $2 for 10-20 miles, add 50% for each additional hitchhiker who share the same route
  • credit/rating for those who drive more than hitchhike, so that one get points and prestige for taking hitchhikers, and will get high priority when they need a ride
  • get home faster via the use of HOV (carpool) lanes
What is the business model for the match-maker?


  • Can charge $0.50 for each match-making
  • Market sizing and revenue: easy, a fraction of the MTA revenue + a fraction of the number of commuter drivers. Los Angeles MTA has 330M boarding/year for buses and another 64M in rail, 1% of that gives you 3.9M/yr, 5% is 19.5M. Add Atlanta, Houston, you can easily double, 5x or 10x that if you expend across the US. Good enough to support a fixed cost e-commerce business (see next bullet)
  • Costs: mostly fixed costs, maybe partner with eBayand wireless operators via revenue sharing in exchange for the technology support. marketing cost will be low as hype and buzz would be generated through word-of-mouth and environmentalists
  • Can also apply to government subsidies for contribution to energy-saving, we should be entitled to whatever subsidy they gave to MTA. Note LA MTA obtained (2006 Budget) $(547+472)M in federal and state grants and $(575+703)M from auto and gas sales tax, their annual revenue of $264M is less than 10% of their annual cost 2.863BN!
Benefits to our world


  • Greener planet, less smog, delay global warming. To quantify this, the amount of the gas saved is at least equal to the revenue of this match-making business.
  • Higher productivity due to time saved (less traffic congestion) - we can roughly quantify that as well

Updates (Aug 27)

p.s. I will be happy to help anyone who is interested in such a good deed in drafting a business plan. :)

p.s. Special thanks to Movie Guy for the inspiration and inventing the title.

5 comments:

Aaron said...

sounds like you are describing my company fairly well, Gishigo, Inc.

Perhaps you would like to offer some kind of services to my firm?

Check it out: http://www.GishiGo.com

Tell your friends.... wink!

Sun Bin said...

It is great that someone is making this a reality.
Unfortunately I am in Asia right now and the network is a bit slow to access sites in the US.
I would be glad to discuss with you about business model and strategic issues of your site. My email is sunbinblog (at) gmail (dot) com

Best,

S

Ridester.com said...

actually, this concept exists here
http://www.ridester.com

HiPath Open office said...

Great blog! Just what i was looking for

rnbresearch said...

I appreciate the labor you have put in developing this blog. Nice and informative.