CNBC Disruptor 50
Stay tuned: The 2021 CNBC Disruptor 50 list will be revealed May 25
CNBC Disruptor 50

Los Angeles backs 'risk taking' of Elon Musk's Boring Company — Residents fear damaged homes, earthquakes

Key Points
  • Elon Musk's The Boring Company wants to create mass transit tunnels beneath Los Angeles.
  • Los Angeles residents fear that their homes will be damaged and earthquakes occur.
  • Los Angeles is the world's most gridlocked city — the average LA driver spent 102 hours (or more than four days) stuck in traffic in 2017.
Building a high-tech L.A.

Elon Musk is no stranger to controversy. Even his "boring" company — The Boring Company — can't steer clear of it. It is in the very early stages of trying to solve a legendary traffic problem here on earth. In May, Musk detailed his plans to dig mass transit tunnels under the city of Los Angeles, where the Boring Company is headquartered.

The project has faced some criticism from local communities amid fears about earthquakes and that tunneling could damage their homes. Two neighborhood groups representing parts of LA's west side have filed a legal challenge against the city's proposal to exempt the project from environmental review. But the city is trying to fast-track the project. At the state level, a bill introduced earlier this year in the California legislature to impede Musk's Boring Company from selling flamethrowers to the public also just failed.

Speaking at the first-ever CNBC Disruptor 50 Roadshow event in Los Angeles on May 23, Los Angeles Mayor Eric Garcetti explained his support of The Boring Company and the use of LA as a testing ground. He believes Musk's companies exemplify the diversified technology ecosystem he is working to grow in the city, and LA doesn't want to force Musk to go elsewhere with his ideas.

Another Musk company, SpaceX, was No. 1 on the recently revealed 2018 CNBC Disruptor 50 List based on its progress in reusable rocket technology and plan to take humans to Mars. SpaceX is headquartered in the City of Hawthorne, in Los Angeles County.

"I love that companies like SpaceX will change the entire paradigm," Garcetti said at the CNBC event. But Garcetti added another note about Musk's companies not likely to calm down LA residents who are worried about the digging under their backyards. "An engineer from SpaceX will be part of a new company, in this case, another one of Elon's companies, The Boring Company, never having done construction technology before."

Garcetti was referring to Steven Davis, a former SpaceX engineer, who is leading The Boring Company's project digging tunnels under LA.

Boring Company's first tunnel.
Source: Boring Company

"Who knows whether it will hit or not but isn't it worth trying?" Garcetti said. "And don't we as Americans want to see our technologies work and then be applied right in our own backyard instead of China or Dubai or other places that seem to be more risk-taking?"

Los Angeles was named the world's most gridlocked city for the sixth straight year in 2017 by INRIX, a leading transportation analytics firm. INRIX estimates that the average LA driver spent 102 hours (or more than 4 days) stuck in traffic in 2017, which it estimates cost the city $19.2 billion. Facing numbers like that, it's not hard to understand why Garcetti is turning to LA's tech community to try to break up some of the gridlock.

"I think LA's developing that reputation, with transportation technology for sure," he said. "We are a place that will work with you … test it here."

More from CNBC Disruptor 50:
From rule-breakers to rule-makers: How Uber, Airbnb and other star start-ups scale up for success
CEO says Crowdstrike's security platform could someday attract Amazon, Google
Indigo Agriculture CEO wants to change economics for farmers with a 'revolution in agriculture'