Hyperloop One says Missouri route is economically viable

The company expects tickets to be cheaper than the price of gas for the same journey.

Virgin Hyperloop One has announced the results of a feasibility study on a planned route connecting Kansas City, Columbia and St. Louis. The study, which has yet to be published in full, purports that the route between the three cities is commercially viable. Researchers at Black & Veatch examined the engineering, viability and economic challenges of a proposed line running parallel to I-70.

The release doesn't go into specifics, but Hyperloop One must feel justified in saying that the route is worth the effort. It claims that the number of people traveling between the three cities would increase by 80 percent, from 16,000 to 51,000. In addition, the local economy is said to be $410 million better off, thanks to reduced journey times, with an extra $91 million coming in savings from a less congested I-70.

Virgin Hyperloop One has doubled down on its claim that journey times between Kansas City and St. Louis could be cut to under half an hour. The release suggests that the trip would now last 28 minutes, with the time to Columbia -- roughly equidistant between the two -- being cut to 15 minutes.

The most interesting claim is that the price of a ticket between St. Louis and Kansas City would be "lower than the cost to drive (based on gas alone)." The details are couched in a lot of ifs and buts, but we can use publicly-available statistics to make some guesses as to the company's thinking.

At the start of 2018, the EPA reported that the average US fuel economy was 24.7 miles per gallon, and the journey between St. Louis and Kansas city is 248 miles along I-70. The current average price of fuel per gallon is $2.91, so if we do (248 / 24.7) x 2.91, the final figure is $29.21. That would mean that users could expect a ride in one direction to cost around $30.

One of the very first claims the company made was that trips on the Hyperloop would cost less than that of a bus. Greyhound's prices for runs between St. Louis and Kansas City range between $22 and $65 depending on the date of travel. If our math is correct, give or take, the company is going to sail very close to its original target.

Another development at Virgin Hyperloop One is the conflicting reports about the company's potential deals with the Kingdom of Saudi Arabia. The Financial Times is reporting that a planned deal has fallen through after Sir Richard Branson spoke out about the (alleged) killing of Jamal Khashoggi.

CNBC, however, refuted the claims, saying that Virgin Hyperloop One is still negotiating with the regime. The deal was due to be signed at a Saudi Arabian investment conference running between October 23rd - 25th. It remains to be seen if the deal is signed, but any such agreement may look unwise given the current political environment.