“More than 50,000 stations have closed since 1991 when there were nearly 200,000 nationwide..”
“Global CO2 emissions from the transport sector are projected to increase nearly 50% by 2030 – with profound environmental, economic and social consequences – unless dramatic changes are adopted.”
You might call Chris Nielsen an artisan. His company, Electric Cab of Austin, actually makes things. And as good a tinkerer as he might be, his goal is to shake up Austin’s urban transportation market. That means everything from how you flag down a pedicab to the type of bus you’ll board in 2020.
“We have strong relationships with local businesses and local government decision-makers, which has helped us play an influential role in the definition and development of new ordinances related to sustainable transportation in multiple areas of public policy,” said Nielsen.
To get a sense of the opportunity, beyond rides back to your house from H.E.B., (though he’ll do that too) The World Economic Forum has a startling data point. We’ll need to build the same urban capacity (housing, infrastructure and facilities) in the next 40 years that we’ve built over the past 4,000 years to meet the demand of urbanization. That’s where Nielsen’s vision for electrification becomes more intriguing.
For starters, utilities and city leadership are being pressed on innovation and need solutions for improved infrastructure. Digitizing the electrical grid, improving traffic congestion and reducing pollution are necessities as cities and towns vie for the quality of life spotlight.
Nielsen says he’s approached Capital Metro with a turnkey package that includes his Low-Speed Vehicle (LSV) designs and drivers at a lower hourly rate.
A number of transportation groups across the country have already pulled the trigger on similar projects. One example, covered in Scientific American, looked at scenarios in Washington State and California. Washington’s LINK system mentioned a big piece of the upside.
“It is no wonder LINK is still bullish on the endeavor: Pezoldt says a comparable diesel-powered trolley would cost about $435,000 and each electric trolley built by Downey, Calif.–based Ebus costs significantly less at $370,000. On top of that, diesel fuel for the same trolley on the same route runs about $1,200 per month, whereas the inexpensive and green hydropowered electricity used for the Ebus trolley comes in at approximately $100 per month—less than one tenth the cost.”
While Electric Cab’s Low Speed Electric Vehicles (LSVs) have been fully permitted since January 2012 for Austin’s Low Speed Vehicles for Hire Ordinance, there’s more to the model than just moving tourists from hotel lobbies to hot spot bars. They want to kill gas-fed routes that originate from all sorts of businesses and government entities. School campuses, prisons, retirement communities and a host of others come to mind.
But that’s the bigger picture. The nice thing for potential investors is the fact that Electric Cab already operates at full speed (OK, half speed until additional funding) with some key alliances in the works. The current model has two components. The first one targets short-range fares, which Nielsen says are often denied by cab drivers. The other segment is the pedicab market, which has its own challenges when it comes to longer routes and safety issues. The company generates revenue by leasing vehicles to drivers for a flat fee, selling on-vehicle display advertising, and by delivering customers to commercial businesses, much like a mobile concierge.
Nielsen wants the additional capital to expand his clean fleet to 25 LSVs. He says each LSV is roughly $9,500, and has an earning potential of $3,500 per month. And returns can be quick, with some units paying for themselves within the first 7 to 10 months under normal circumstances. Just as notable, the maintenance associated with LSV’s is usually very low, while their lifespans are lengthy. According to his figures, an LSV can net an investor more than $40,000 over a 4-year period.
Strategic partners are key as well. The company is in talks with Pflugerville’s Community Cars, a company now run by Austin attorney Stacy Zoern after it merged with Hungary-based Kenguru Services KFT in early 2011. Zoern’s industry knowledge and the need for additional manufacturing and supply chain expertise has both companies eager to explore joint opportunities.
A few other things might also play out in its favor. Austin Energy has significant grant funding to deploy an electric vehicle charging grid, which could expand rapidly as other regional developments take shape. Pecan Street’s visibility doesn’t hurt either. They’re also exploring a partnership with Formula One to help it utilize large passenger EVs for logistical support and passenger transportation. Apparently, there’s different seating configurations to allow fans to move around the track for the best views.
But perhaps most indicative of its broad appeal, the company is currently working with the Texas Senior Mobility Project to provide alternate modes of transportation. Electric Cab says Capital Metro has decreased service to that demographic and says its newly available ADA compliant shuttle bus would be the perfect for senior citizens.
I may be a bit biased, but the more I learned about Electric Cab’s business, the more I was intrigued. Whatever the case, with fossil fuel subsidies losing favor, gas prices consistently rising, and more pressure on cities to reduce carbon emissions, what’s not to like about cleaner and more affordable transportation? And besides, we all know another website isn’t going to solve the world’s problems.
This is a sign of things to come as everyone has access to these kinds of smartphone apps. The data is available, it’s just a matter of open APIs and aggregating the right sources. Take that range anxiety!
"Japanese automaker has partnered with CarStations to offer a new app for i drivers that will provide charging station information."
When a reminder about the upcoming Clean Energy Summit hit my inbox, I jumped at the chance to make the case for why Austin should be excited about this event. And while I’d be the first to advocate the benefits of a clean energy community, this isn’t a rah-rah session. Let’s look at what’s happening in clean energy to see why this year’s gathering should accelerate Austin’s clean energy future.
The Economic Climate
Clearly this isn’t the best of times for the economy. Unemployment is unfortunately unwavering, wages are stagnant, and now there’s even a potential poster child for clean energy failure with Solyndra’s collapse.
Even so, Cascadia Capital showed cleantech investments totaled $1.42 billion over 113 deals during Q2 2011. While that’s down 10 percent from Q2 2010, one thing to note was the shift to the “capital-efficient energy sector,” displacing investments in biomaterials and biofuels.
Big Fish Getting Involved A Good Sign.
A good barometer for clean energy is to also look at what established companies are doing to get a seat at the negotiating table. Fortune 500 companies are often a cleantech company’s first customer. And if they’re not a paying client, they often provide needed infrastructure or partnerships in key markets.
As an example, GE is aggressively investing in energy startups, telling the Wall Street Journal its deal flow for 2011 is already at 20, easily eclipsing its 2007 figure of 11.
That’s also consistent with data provided by UMASS economics Professor Nancy Folbre, who points out private venture capital has quietly moved towards the clean sector, rising to 16 percent in 2010 from 2 percent in 1995.
The other footnote to GE’s activity, and one startups should pay attention to, is its approach to cultivating its clean energy portfolio. Besides obvious industry partnerships, it created the Ecomagination program, aimed at spurring ideas to help the environment. And while there’s a PR veneer to it, GE is no doubt getting a leg up on what’s happening in the trenches, an innovation-driven sneak-peek if you will.
Where Are The Opportunities? How Is Austin Positioned?
Austin’s tech lineage is strong, particularly in software and semiconductors. A good start would be bridging that expertise. If we look at comparisons to the rise of information technology in the United States, the picture is clearer.
“The aggregate green economy, which includes jobs in the public sector and waste management, is just under half the size of the IT producing industry, but measured by jobs, “cleantech” is similar in size today as the computer manufacturing industry (162,000) and roughly half the size of the semiconductor industry (370,000).”
Those numbers are compelling for a few reasons. One, it shows cleantech isn’t as far behind as some pundits would have us believe. Not to mention the computer industry isn’t exactly tearing it up these days. Can you say Tablets? Heck, the most exciting innovation I’ve seen lately is proof that our computers are doubling their energy efficiency every 18 months. I’d also bet those semiconductor numbers decrease as processors increasingly move to smaller, more mobile devices. Unfortunately for some that might correlate to less manufacturing and fewer jobs.
Mr.Muro capped of his post with another important observation.
“..many solar producers are classified in the IT-sector as semi-conductor manufactures; smart-grid technologies are also heavily IT-based. It’s therefore not unimaginable that, with a few strong years of growth and innovation, cleantech could be large enough to fuel considerable increases in aggregate economic growth.”
One of the takeaways here is the breadth and potential depth of clean ecosystem and markets. Famously, many Silicon Valley companies have ‘pivoted’ to capitalize on other markets. The point is, Austin’s clean energy companies have plenty of ways to innovate in a sector that’s tied to so many converging forces. Today’s motherboard producer might be tomorrow’s solar fabricator.
Cities, Infrastructure Provide Opportunities
Getting more hyperlocal, there’s other reasons to pay attention to clean economy activity, not the least of which is better paying jobs. Here’s a few charts I pulled from the Brookings’ clean economy report. The first one is self-explanatory. There’s growth in our own backyard.
In the second image, you’ll notice that Austin ranks 36th when you compare the largest 100 metropolitan areas. But look at the growth. The growth metric moved Austin up a number of notches and also shows clean jobs grew more than 5% each year. Not too shabby.
And before you scoff at the annual wages, we’re looking at you Mrs. software engineer, it’s important to keep it in perspective. Wages are higher compared to all other Austin jobs Brookings analyzed.
One other notable piece in the Brookings report was the huge emphasis on energy efficiency. It was the largest category analyzed by Brookings, capturing 13 out of the 39 distinct segments. That’s called bulletin board material if you’re keeping score. (Sorry for the sports cliche, but it is football season)
It shouldn’t be that surprising. Old buildings, old schools, all of them could use some sort of energy upgrade. Couple that with new commercial and residential activity and it’s no wonder ABI Research projects cities will spend $39.5 billion by 2016 to become smarter. The other data point I like to point out is research from the University of Massachusetts that estimated roughly 15 jobs are created for every $1 million invested in energy efficiency.
City Mayors Get Behind Clean Energy And Efficiency
Another positive sign for CEVS is having the eyes and ears of local government. That was echoed in the form a recent letter to Washington from U.S. Mayors, entitled a “Common-Sense Jobs Agenda.” Local officials analyzed parts of Obama’s Jobs Act, emphasizing how the clean economy can spur job growth and stoke the economic fires.
The group (Mayors) has been vocal recently, penning an earlier report (June 2011) from its national conference, in which 86 percent of the 396 cities surveyed saw building retrofits and clean energy conversion as economic priorities.
So whether you’re a startup, an investor or you just want to see Austin continue to evolve, there’s plenty of reasons to get behind clean energy. Get out and support these companies, your grandkids will thank you.