Entrepreneurs See Opportunity in People Movers

Last Updated Dec 15, 2009 7:23 PM EST

My first experience with "people movers" came at Disneyland, where the brightly colored four-person cars glided silently on elevated tracks above Tomorrowland. They spoke of the future, seemingly powered by small wisps of energy, and smart enough not to need a driver. They have since been discontinued at the California theme park, but the real business of "personal rapid transit" is just dawning.

Maybe.

A handful of small entrepreneurial firms such as Vectus and Advanced Transport Systems are developing systems for a variety of clients including cities, airports, schools, corporate campuses and, of course, amusement parks.

These aren't your father's PRTs, which moved dozens of passengers from station-to-station on a regular schedule. Check out the sleek model in the image at right. These "driverless taxis" service single riders (or small groups) on-demand. They can travel to a number of locations picked by the passenger.

Harvard Business School professor Ben Edelman is putting together a case study of PRTs for use in the classroom. The central question for potential entrepreneurs in this market is, where does the profit come from? As he tells HBS Working Knowledge:

"I'm convinced that PRT creates huge value -- reducing automobile congestion, and getting passengers to their desired destinations more quickly and more reliably. But how can a system vendor claim a fair share of that value -- enough to justify building the system in the first place?"
One answer might be by having government shoulder some of the cost. And companies and other institutions might be willing to pay if the cost/benefit equation works out. Read the interview and then come back here to tell us how you would make money in moving people from one location to the next with minimal impact to the environment.
  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.