(Bloomberg) – The CES tech show in Las Vegas last week was a milestone for Elon Musk’s Boring Co., which operates a network of underground tunnels to transport passengers around the massive convention center in cars. of Tesla Inc.
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The Vegas Loop generally did well, despite some issues that were caught on video and sparked mockery on Twitter at a company that said its mission was to “fix the traffic”. Another element of Musk’s initial vision also appears to be fading: Vehicles rely on human drivers behind the wheel, a stipulation that isn’t expected to change anytime soon.
However, Las Vegas officials said they were happy with the results last week. Figures provided to Bloomberg by the Las Vegas Convention and Visitors Authority show that the public transit system successfully transported some 15,000 to 17,000 people a day during CES, nearly half of the show’s attendees. According to Boring Co., average wait times at its three stations were less than 15 seconds. Trips took less than two minutes on average, as the LVCVA predicted when reporters visited the site in April.
The numbers show a solid performance for Boring Co., although CES fell short of the rigorous testing of its systems that some had hoped. Because a spike in Covid-19 cases drastically reduced conference attendance and shortened the event, far fewer people made their way through the tunnels than they otherwise would have. It remains to be seen how the system will withstand drastically higher demand.
The throughput and durability of Boring Co.’s Las Vegas tunnel system, the company’s first commercial project, is important for several reasons. First, the startup is in negotiations with several cities across the country, all of which are likely eager to see how the startup’s technology performs in the real world before signing a contract.
Second, the company’s compensation for the Las Vegas project is tied to its performance at major conferences like CES. Under the terms of its contract, Boring provided a $4.5 million letter of credit to the LVCVA. The money Boring Co. owes the authority will be reduced by $300,000 every time the company flies an average of 3,960 passengers per hour for 13 hours during a major conference.
Given that this year’s show only drew around 40,000 attendees, down from 170,000 in 2020, the smaller crowds almost certainly mean Boring was unable to prove he could keep up with the number. minimum number of passengers defined in the contract. The LVCVA declined to provide hourly averages.
But the company was able to hit those numbers in a recent test, the agency said. In December, LVCVA chief financial officer Ed Finger told the authority’s audit committee that accounting firm BDO had confirmed the system was carrying 4,431 passengers per hour during a test in May. This was more than enough to allow Boring to receive the final installment of his total payment of $44.25 million, as per his contract.
The test lasted an hour and involved more than 300 volunteers, Finger said. The contract allows Boring to run tests using 10% of the vehicles required for system capacity, with the addition of engineering analysis to predict what rates would be if more vehicles were used. After testing, the county approved an increase to 70 Teslas for the transit system.
If the Las Vegas project is successful, it could encourage other cities to enter into contracts with Boring Co. Fort Lauderdale, Fla., and San Bernardino County, Calif., are in various stages of negotiations for their own tunnels. In San Bernardino County, where Boring Co. has until the end of this month to submit a proposal, plans are still in limbo.
“Negotiations have been difficult,” Carrie Schindler, director of transit and rail programs for the county transportation authority, said at a town hall meeting Thursday. She said that although Boring Co. originally offered self-driving vehicles, it “no longer engages in self-driving technology,” which would affect the county’s budget for the eventual operation of the project. Autonomous technology was once a key selling point of Boring Loop systems.
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