by Lucie Greene
The idea for Hyperloop began in 2013 when Elon Musk published a fifty-seven-page white paper describing a radical alternative to public transport—capsules containing twenty-eight people could be fired through a sealed, low-pressure tube. Floating on a cushion of air, the capsules could make the journey between San Francisco and Los Angeles in thirty minutes.
The project was later taken over by Pishevar and Lloyd. The story goes that Pishevar and Musk were on a humanitarian mission to Havana, Cuba, in 2013—presumably another city that could be terraformed from scratch—when Pishevar asked if he could take on Hyperloop. Musk, after all, had space, cars, and energy on his plate. Pishevar suggested that Hyperloop could carry freight as well as people. He subsequently recruited a cofounder, a former SpaceX engineer named Brogan BamBrogan. Hyperloop Technologies set up shop in BamBrogan’s garage in Los Angeles in November 2014. By 2015, the project was big enough to open its current downtown location, and it raised money from Sherpa Capital among others. Lloyd joined in 2015. Since then the company has generated $295 million in investment, signed deals with Dubai’s Roads and Transport Authority and DP World, which is the world’s third-largest port operator, and established partnerships with General Electric and Deutsche Bahn. But the company has continually had naysayers. Before Richard Branson came on board, it was reported to be experiencing financial problems. It has repeatedly been dubbed a fantasy project, or worse, a Ponzi scheme. Before Pishevar’s legal issues, the company’s slick reputation was marred by a lawsuit filed by BamBrogan, who exited his position claiming harassment and financial mismanagement—but from this at least, it appears to have moved on.
The company has enlisted BIG—the Bjarke Ingels Group, utopianist architect of the moment—to design the vision and experience. The promotional video, set in 2020, offers a teaser. The Hyperloop terminal is a sleek, futuristic circle in the heart of Dubai, surrounded by skyscrapers and gardens. Pods join and move around the circle continuously; pods contain meeting rooms, lounges, and cargo, and they are deployed in regular intervals to sealed Hyperloop tubes, where they jet off to their destinations. The video features actors portraying how it will be used for a trip from Abu Dhabi to Dubai. The entire experience is frictionless and idyllic—renderings by BIG show a light-filled terminal space. It’s all very slick, with thumping digital music adding to the ambience.
Hyperloop isn’t shy on futuristic rhetoric, either. Taglines include “Be anywhere. Move anything. Connect everyone. Hyperloop is the new way to move people and things around the world.” Or “Hyperloop is a new way to move people and things at airline speeds for the price of a bus ticket. It’s on-demand, energy-efficient, and safe. Think: broadband for transportation.” And “We’re not selling transport, we’re selling time.” Certainly one of the more enticing aspects of the on-demand loop pod system is eradicating the time currently spent in airport departures and security.
The Virgin Hyperloop One headquarters has all the bells and whistles of a startup, complete with exposed brick walls (ironically, it sits next to old train tracks). When I visit pre–Richard Branson, it’s still plain old Hyperloop One and only a small discreet door sign indicates what’s behind. Today, there’s a parking lot with vine-covered, multi-tiered car lifts, and a full frontage with sleek grey planters and desert grass landscaping.
Engineers are walking around. Out back there are vast tubes being lifted around by cranes. Amid the noise, drilling, and commotion, Lloyd, formerly president of Cisco, is bullish about the company’s future. “If you look at what we’ve done in a short period of time, we’re going to have our kick-off moment this year and have the first full-scale Hyperloop in history working with cargo as well. That’s pretty phenomenal.” (Note: 2018 this has yet to happen.)
Lloyd brushes off those who question Hyperloop One’s science. It’s difficult to see, without a moneyed dictator prepared to flatten everything, how to build a giant network of mounted low-pressure, maglev tubes shooting trains back and forth across oceans. But the pure ambition is laudable. (Each of its proposed routes will need gigantic infrastructure built to carry the tube network, via either new tunnels or mounted monorails.)
“The good news is, the challenges we face are to just demonstrate that this system works,” he says. “But remember, we expect the naysayers to absolutely resist something quite disruptive, because there’s no rules around what we do. The book on transportation in the UK is this thick,” he indicates a thick volume, “the rail regulations are this thick”—he indicates another huge pile of paper—“and there are about two pages that have any relevance to Hyperloop. Two pages. So we have to write a new book. Governments don’t necessarily feel very good about writing new rules and regulations, so we have to help them do that. The biggest challenge, in my opinion, will be writing the playbook for how to regulate what looks like a plane, riding on a track, and in a tube—it’s almost like, ‘Oh my gosh, this is pipelines meet airplanes meet rail meets solar farm.’”
The vision presented by Lloyd is of a future where entire geographies are transformed. Of Virgin Hyperloop One’s high-speed, long-distance capability, Lloyd commented that “it alters the definition of a city. Cities would be defined much more as regions than the boundaries of municipal government . . . Your working and living arrangements would be very different, so you would start to change property values. You wouldn’t have to live in San Francisco and pay ridiculous rents to have the vibe of San Francisco.”
Space saved by Hyperloop being partly underground would also mean extra real-estate development potential. It’s a big, chunky, audacious project, involving miles of tubing, concrete, metal, new town planning, and new towns. And it’s being led by a private company, a tech executive, and backed substantially by Silicon Valley venture funds.
Will it work? Could Hyperloop be the disruptive force that changes transport in the same way the smartphone changed telecommunications?
“Transportation has typically been the domain of governments.” But, says Lloyd, innovation in recent years has been iterative and incremental— not transformative, which is where entrepreneurs have the edge. “We’ll put in a metro for city transportation, we’ll get our buses to be smarter and get an app for your bus, and that’s all around the world. Unless something really disruptive comes around, there’s no reason to expect that that would change. I think, in transportation infrastructure, the same thing is going to happen. I wouldn’t expect anybody in government to actually want to accelerate a disruptive technology. It’s not a natural behavior—it doesn’t make sense to disrupt all the mechanisms that you feel might be working well. It’s going to have to be a company, an industry, a movement.”
A Silicon Valley “movement,” presumably.
Tech’s entrepreneurial spirit, limitless funding, and ambition is turning to reinventing every corner of our lives. Its way of thinking is lauded as a secret sauce for fixing just about everything, from disrupting a broken transport system to improving the way we learn. In all, technology, economies of scale, and disruptive business models are usually deemed the cure. But what happens when it tries to disrupt one of the most lucrative and entrenched systems around? Can Silicon Valley save health care?
6
The Future of Health
As symbols go, it was pretty potent. Amid ongoing national debate about America’s broken health-care system, the future of the Affordable Care Act, sky-high drug prices, and continuous headlines about the opioid epidemic, with scant signs of resolution, in stepped not government with a decisive action but three titans of industry. One of them was Jeff Bezos.
On January 30, 2018, Jeff Bezos, Warren Buffett, and Jamie Dimon announced they were entering the health insurance business with a new joint venture. The partnership, between Amazon, Berkshire Hathaway, and JPMorgan Chase, is a new company aimed at providing their U.S. employees with a better alternative for health care. In a statement, they said the company, while still in its early stages, would be “free from profit-m
aking incentives and constraints.”
“The ballooning costs of health care act as a hungry tapeworm on the American economy,” Buffett commented. “We share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes.”
The venture’s ambition is to find a more efficient and transparent way to provide health-care services to their collective base of 840,000 employees and their respective families. “The health-care system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” Bezos said. “Hard as it might be, reducing health care’s burden on the economy while improving outcomes for employees and their families would be worth the effort.”
Reports soon speculated that this company could in time extend its services to all consumers. So much so, shares of established health insurers from UnitedHealth (UNH) to Anthem (ANTX), Aetna (AET), and Cigna (CI) took a dive following the announcement.
And little wonder. Amazon had already ruffled feathers by making key hires and acquisitions in pharmaceuticals, including buying pharmaceutical licenses and holding talks with generic-drug makers. The threat of it disrupting the pharmacy business was enough to inspire pharmacy chain CVS Health to acquire health insurance behemoth Aetna for $69 billion in a defensive move, and tout new potential services such as in-store primary care and medical follow-ups.
The perceived threat is not unreasonable. Amazon is giving many packaged goods, fashion, beauty, and personal-care brands a headache with its roll out of AmazonBasics, more affordable, private-label alternatives to branded versions. Meanwhile, a new wave of Amazon lines in fashion, beauty, and athleisure are being pitched as desirable independent brands akin to Nike, Lululemon, and Tory Burch (see Dear Drew by Drew Barrymore). All of which are promoted in Amazon search results above other brands. Then there’s Amazon’s grocery business. Efficiencies, robotics, and machine learning enabled it to reduce the price of organic goods in its newly acquired Whole Foods supermarket chain by as much as 43 percent. No doubt a host of private-label affordable organic groceries are on the horizon, creating challenges for Trader Joe’s among others. All that’s coupled with the fact that Amazon is already baked in to people’s daily lifestyle and shopping habits. More online shopping searches start on Amazon than Google, according to the “State of Amazon” study by BloomReach in 2016. (Ninety percent of consumers will check Amazon even if they have found the product elsewhere.) All of this could provide big competition when applied to the world of health.
Would it be the worst thing for Amazon (along with Buffet and JPMorgan) to shake up health care? Health-care systems in the U.S. and the UK are under deep scrutiny. The United States spends more on health than any other nation. Despite this, the average life expectancy has fallen in consecutive years, according to the Centers for Disease Control and Prevention. Health inequality is an ongoing issue. A recent study in the American Journal of Public Health found that household spending on health care was a significant contributor to income inequality in the U.S. Meanwhile, medical expenses push millions of Americans below the federal poverty line. “Medical outlays reduced the median income of the poorest decile by 47.6 percent versus 2.7 percent for the wealthiest decile and pushed 7.013 million individuals into poverty . . . The way we finance medical care exacerbates income inequality and impoverishes millions of Americans.”
In the UK, the woes of the National Health Service continue to make headlines. In 2017, the British Red Cross even warned that it was on the brink of a “humanitarian crisis” because it could not keep up with demand for ambulances and hospitals.
Perhaps Bezos, Buffet, and Dimon’s health care 2.0 could have global potential.
Many Americans (unless they work in health care) would welcome the prospect of Silicon Valley’s disruptive forces changing the game for creating at least a new set of competitors to the big giants, if not a new system entirely. The current health-care system doesn’t seem to benefit anyone except those who can afford it—and chances are, they too would welcome a cheaper, more efficient version.
The continued specter with any of this, of course, is that it gives private companies like Amazon access to yet more intimate personal data. Do we trust them? And is the benefit of sharing this information incentive enough for a reasonable health-care system? For many, it actually might be.
In 2017, J. Walter Thompson surveyed 1,000 American adults on the future of health. Eighty-eight percent of women and 83 percent of men said they believed the health insurance system was broken and must be fixed. Seventy-five percent of consumers thought startup tech companies should be working to improve the health insurance system. In the same study, the majority of consumers said they would be comfortable sharing anonymized medical data for research, both with research institutions (69 percent) and with private companies (62 percent).
But health is not just one thing, of course. Health is pharmaceuticals, hospitals, doctors, emergency rooms, optometrists, chiropractors, dentists, sleep coaches, yoga teachers, and medical marijuana. And Silicon Valley is moving into many of these spaces and attempting new services that disintermediate traditional businesses with consumer-centric, transparent, and data-driven alternatives. Or make huge breakthroughs in life sciences, biotech, equipment, and even the way health insurance itself works.
The Chan Zuckerberg Initiative has set up a $600 million Biohub as part of its mission to cure, prevent, and manage all disease. Research is open—encouraging other researchers to feed in. Grants are given with a five-year time limit to make a breakthrough. OraSure, a Pennsylvania-based tech company, has partnered with the Bill & Melinda Gates Foundation to offer its HIV self-testing product at a more affordable price in fifty developing countries.
New equipment and hardware are also being developed, which could service hospitals, clinics, and research organizations. A San Francisco startup called 3Scan has raised $14 million in venture funding for a proprietary robotic microscope and computer vision systems to automate tissue analysis for scientists involved in drug discovery.
Jeff Bezos has invested in Juno Therapeutics, a cancer research startup.
Tech’s health awakening started, perhaps, with the dual rise of trends in well-being and self-quant (the trend for using devices such as wearable Fitbits to monitor fitness levels and improvement, which have since become embedded in people’s lifestyles and health regimens). Over the past few years, well-being has become a global phenomenon—the lens through which people consume everything in the attempt for a balanced lifestyle— perhaps in the knowledge that we’re now all going to have to work until we’re one hundred years old. According to the Global Wellness Institute, the well-being economy is now worth $3 trillion. It grew 10.6 percent to $3.72 trillion between 2013 and 2015. There are now paint colors positioned with a well-being angle. Luxury apartments with purified air and water (see Deepak Chopra’s latest development in Miami). And as luxury fashion sales see challenges, a global army of athleisure-bedecked consumers continues to spend on brightly colored seasonal leggings and crop tops.
With that, consumer health tech products have exploded, promising shoppers the ability to monitor their own health. The halls of CES, the Consumer Electronics Show staged every year in Las Vegas, have started to groan with new devices that help consumers monitor everything from their sleep patterns to the lighting in their room (designed to optimize your circadian rhythms) to their pregnancy, stress levels, blood pressure, and more. The inventions continue to get more inventive. At CES 2017, several connected cars boasted well-being benefits such as mood-enhancing displays and fresh air alert “bursts”—all of which seems a bit of a stretch, given that you’re sitting in a vehicle and when they all become self-driving people won’t even need to exert themselves to steer. With smartphone dependence and rising anxiety and mental health awareness, mindfulness apps have exploded, helping us, ironically, to disconnect. Calm, an
app that offers guided meditations, has been downloaded fourteen million times and counting. Headspace, a similar app, has been downloaded eighteen million times. There are apps for mindful eating, childbirth, and more. WeCroak is an especially morbid addition. The app reminds users several times a day that they are going to die, along with other motivational messages such as: “The grave has no sunny corners.” The philosophy behind its approach has Bhutanese folk origins. Apparently there is a famous belief that to be happy you need to think about death five times a day. The instinctive response is to appreciate life and seize the day.
Some of these wackier concepts are driven by the culture in Silicon Valley itself, one defined by a relentless quest for self-improvement, turning to philosophy, history, spiritualism, and far-flung lands for ways to be better at their jobs. As Amber Atherton, founder of advertising tech company Zyper and new Palo Alto resident, tells me: “Most of my startup friends do have tutors. There’s a culture of self-improvement and desire for efficiency, it’s like nowhere else. You just want to optimize, optimize. How am I being more efficient? All the time.”
Collectively, this sits within a growing appreciation of well-being in lifestyle as a form of preventative health care, a way to ward off chronic disease. According to Aon Employee Benefits, the number of employers investing in workplace well-being increased from 36 percent to 42 percent this year, with a view to preventing (rather than treating) everything from disease to anxiety and stress-related symptoms. Consumer tech companies have been in prime position to capitalize on this shift, presenting new services as a way to take control of personal health care and potentially avoid excessive medical costs for treatment.
