dynamics that existed 100 years ago, or 50 years ago, or that are not relevant today. So you have needs that are at odds with the fixed infrastructure. So these cities actually suffer. And public transportation has many different responsibilities. It has to work at times when people are going to work, and it has to work at times when no one else wants to travel.
So it’s very unfair to expect a transit system to try to optimize itself around the needs of commuters. In fact if you look at Caltrain, they are at capacity during rush hour. But if they were to increase capacity, then the increased cost would prevent them from serving the public at other times.
So the volume of commuters, obviously, is one area we look at as we grow the company. The other factor we look at is going to be the kinds of corporations, the kinds of verticals that might be in these markets. Because initially the corporations that will be more able to offer something like this, even if it’s much more cost effective than doing it themselves, tend to be businesses that already have resources devoted to managing their human capital, and that are constantly looking out for better solutions for their employees.
X: One of the cities that comes to mind is Detroit. It’s a city where we have a bureau, and the downtown is undergoing something of a resurgence. There are some big high-tech companies downtown like Quicken Loans and Compuserve. So this is a hub-and-spoke problem, getting people into the city. And there is a terrible public bus system, so there is no way to get into work on the city buses, and there is no rail system. Obviously, Detroit was built around highways.
NC: Which is great for buses.
X: Right. It’s great for buses. So I don’t know if there’s a huge congestion problem in Detroit but there is definitely a people problem, just getting people downtown. So it may be a market for this kind of thing.
NC: It may be. I think we will be looking and starting to talk about which markets will make sense to expand, and I think Detroit is probably on the list. Wherever there are problems moving people it is probably on the list and then we have to figure out, is this something we want to do now or something we want to do later?
So I don’t have an answer. We are not yet projecting where exactly we will expand. But the need is well beyond the Bay Area. If we were to be true to our vision, it would be difficult to stay in the Bay Area and still cover a huge percentage of the world population. [Laughs]
Right now we are really in the starting phase. Once we start scaling all of these barriers can go way down because you have all sorts of economies of scale, and the ticket to entry for a lot of these corporations will be much lower.
X: All that said, do you feel there is room to grow still here in the Bay Area?
NC: Absolutely. We are seeing huge acceleration in the Bay Area. We have a lot more room to grow. I think for a long time, companies thought they had no other options. They were saying “Oh, we don’t have the cash reserves of Google, or we’re not as big,” so for a long time people were not even thinking it could be possible. Now we have people more and more realizing this could be in reach, this may be an option.
