Tech Transformers

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Ready to travel in tubes?

Hyperloop, the transportation brainchild of Tesla boss Elon Musk which plans to take you from San Francisco to Los Angeles in 30 minutes, could be be free to use, according to the CEO of the project.

Comparing the business model to that of video games, which have increasingly moved to in-game add-on purchases, Dirk Ahlborn told a question and answer session with CNBC at the Pioneers Festival tech show in Vienna that Hyperloop could follow the same model.

"When we think about video games, they are free and are making more money (than ever before) through upsales in-game."

"We are thinking about tickets and whether this is the right way to make money," he added, saying that fares could be free during off-peak times and very low-cost during peak time.

Ahlborn said he is looking at other ways for the project to make money but did not outline specific plans.

A rendering of a Hyperloop by Hyperloop Transportation Technologies
Source: Hyperloop Transportation Technologies

'Break ground' in 2016

Hyperloop has moved closer to reality after inking a deal this week with landowners in California's Quay Valley to build an 8 kilometer test track for the project, which it expects to "break ground" in 2016.

The system would be a number of passenger capsules that would be propelled by magnets at a speed of 750 mph or close to the speed of sound.

"The next phase now is to use this 8 kilometer track which is not about speed, it's about optimizing all these systems - passenger boarding, capsule handling - once we have done that we can go and start building the first multibillion-dollar track which is full length," Ahlborn told CNBC in a TV interview.

The CEO envisions a system where users can call a self-driving car or ride sharing service to transport them to a local Hyperloop station where they can catch a capsule to the main LA to San Francisco line.

After the U.S. launch, Ahlborn said the next markets are likely to be the Middle East and Africa before it comes to Europe.

It won't be 'weird'

Still, the project has received a host of criticism around cost and passenger experience. The company is expecting the project to cost $16 billion, much lower than the $68 billion being spent on a California's high speed rail service, Ahlborn said. But that low figure has been questioned with some estimates expecting costs to hit around $100 billion.

Travelling at such rapid speeds also raises questions about the passenger experience, but Ahlborn said he had that under control too.

"We are building it in a way that everybody is familiar with it so it's very similar to's not weird, it's not's similar to what you feel in a car," the CEO said.

'In the shadow' of Musk

Tesla Motors and SpaceX CEO Elon Musk unveiled this project in mid-2013 but said he didn't have time to build it himself. At the time Ahlborn had founded JumpStartFund - an investment fund that allows people to crowdfund projects and contribute ideas.

The principle has been applied to Hyperloop and Ahlborn said the project has over 10,000 people who have day jobs at places which include Nasa and SpaceX. They all contribute ideas to the project in their free time in return for stock options in the company, creating a very unique business model.

Musk doesn't have too much to do with the project, but Ahlborn was candid about what working with the billionaire is like.

"It's great from one point because people listen to what you have to say," Ahlborn said.

But the CEO said it also has its downside as "you're always in his shadow" and pitching to investors - such as Richard Branson - who has businesses rivalries with Musk can be difficult.

"There is always a plus and negative part...he is doing great things."