LoopWorks will secure grant funding for engineering and construction from foundations ingaged in reducing greenhouse gas emissions, increasing transit ridership, or promoting social equity. To provide free rides to users, alternative revenue streams will be cultivated to fund the low cost of operations and maintenance. All revenue can be applied to running the system and serving people because grant money eliminates the need to pay for both capital costs and interest on debt.
The LoopWorks Business Plan will be the primary document representing both LoopWorks and the Milpitas PRT project when writing formal Grant Requests. Supplementing the business plan will be all official LoopWorks documents, including this website.
As a California Benefit Corporation with ties to all stakeholders, LoopWorks improves its prospects for funding from foundations, even those that normally fund only non-profits. Also, the flexibility afforded a Benefit Corporation enables LoopWorks to quickly adjust to economic and other changes in its environment – and makes it easier to show foundations how LoopWorks can help them achieve their goals.
This project offers the prospect of replication and scaling, aspects that are necessary for any technology that promises to make a big impact on Global Warming. PRT can grow locally, be replicated virally, and scale to serve large metropolitan areas.
As shown in the Financial Projections section of the business plan, LoopWorks will seek 3 rounds of funding in the sums of $0.6M for initial business development, $6M for design work and project management, and $60M for construction, testing and 1 year of O&M. At the end of that first year of operations, enough data will be available for communities to fairly estimate costs for their own PRT system using the ITNS design. That data – and the knowledge gained from building this first PRT system – is the biggest payoff for investing in this Milpitas PRT System. For specifics about data to be collected, see Performance Reports – The Big Payoff in the business plan.
While LoopWorks anticipates support from foundations, many other methods of financing are available – any combination of which may provide the required capital. Find further information in the Funding Request section of the business plan.
Reality of "Free Money"
Although "free" money need not be paid back, there will certainly be "strings attached". The funding entity will expect - and receive - a say in how the project is run, regular reports on how funds are spent, and what results have been accomplished. In conformance with LoopWorks’ goal of transparency, reports and results will also be made publicly available.
Because "free" money unburdens LoopWorks from both repayment of capital costs and servicing debt, all revenue can be applied to maintaining a high level of service. For LoopWorks, that means covering Operations & Maintenance Costs without charging fares. Free fares for all - the "transportation equity" aspect of this system - will further endear LoopWorks to foundations and others poised to contribute to improving the lives of people.
Operations and Maintenance (O&M) is expected to be 1% - 3% of capital costs, or $0.6M - $1.8M annually. While nearly all publicly-owned transit systems charge fares and lose money, LoopWorks seeks to provide free rides to users and pay for unusually low O&M expenses from Alternative Revenue Streams.
LoopWorks recognizes that charging a fare alters the relationship between riders and the transit system. Also, charging a fare could provide a revenue stream for growing the initial Milpitas PRT System to serve more of Milpitas. However, LoopWorks is disinclined to charge fares at this time for various reasons that can be found in the LoopWorks Business Plan.
Since free rides will be offered, paying for Operations & Maintenance (O&M) Costs of the PRT system proposed for the Transit Area will be needed. LoopWorks expects to successfully cover O&M costs using a 3-tier approach that includes endowment (Plan A), add-on services (Plan B) and farebox recovery (Fallback Plan). While we plan to pursue Plan A first, we expect to also develop Plan B add-on services. Plan B, like tributaries to a river, will have several small income streams that add up. If those two income streams prove inadequate to cover all O&M costs, user fares will be considered. Again, details can be found in the LoopWorks Business Plan.
“The climate crisis is an existential threat to our planet. But it’s also a once-in-a-generation opportunity to rebuild our crumbling infrastructure, create a million good new jobs, and unleash the best of American innovation.”
- Senator Elizabeth Warren (D-MA)