The technology has since been adopted by several rival companies, and Hyperloop One conducted a successful test over a short distance in the Nevada desert in May.
Nevertheless, many experts, including Dr John Hansman, professor of aeronautics at Massachusetts Institute of Technology, and Richard Muller, professor of physics at the University of California, Berkeley, believe hyperloop technology faces challenges of engineering, cost and safety that may be insurmountable.
Akin Adamson, the Middle East regional director at British consultancy Transport Research Laboratory, said the high cost of developing the hyperloop and the potentially high price of tickets to recoup the expenses could limit the system's impact.
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"You would have to take a close look at the economic model to see if it makes sense as a real alternative," he said.
However, Mr Adamson said that if the concept could be made to work, it would improve safety. There are frequent serious accidents on the 170km road between Abu Dhabi and Al Ain, the latest being a 25-car pile-up last month.
"The more you can take the responsibility of safety away from individuals and give it to a small number of highly trained individuals or, better still, robustly tested technology, then it is inevitable you will have safety gains."
Mr Adamson said adopting more advanced technology such as hyperloop, while skipping conventional systems such as railways, was not unprecedented.
"There are a lot of examples of established technologies which cease to become relevant and are leap-frogged by newer technologies. Some people will never own a fixed-line telephone or a desktop personal computer."
Khalid Hashim, acting executive director of land transport sector at Department of Municipal Affairs and Transport, said the technology would further connect the cities while stimulating their economic, social and tourist sectors.
In addition to direct benefits such as speed, he said, there would be "less reliance on private vehicles and traditional public transport modes, which means creating sustainable transport that can lessen the negative impact of transport-related emissions".
HyperloopTT chairman and cofounder Bibop Gresta said the project would provide a safe, rapid and effective transport alternative.
"It will result in providing a sustainable solution – reducing the carbon footprint while enriching the lives of people in various communities here in Abu Dhabi," he said.