Reducing Vehicle Traffic In Cities: A Disruptive Ride-Sharing Model For Sydney

The Problem

Discuss about the Car Pooling Business Idea for Sydney.

The modern world is faced by a myriad challenges, least of which is city transportation given that increasingly more people are living in cities. Billions of dollars worth of productive time and productivity is wasted while people are stuck in traffic. In the USA, for example, the number of cars are so many that there is practical a car for every person living in the USA. China is also faced wit a rapidly growing vehicle population. This massive increase in vehicle traffic has been massive in recent years, yet the available transport lanes and channels have barely changed. Yet with every challenge facing society, there comes an opportunity that can be exploited, without much massive investments (Zheng, 2017; Dahl, 2005). Despite efforts to develop efficient mass transport solutions for cities, the efforts have not had much impact in reducing vehicle traffic. Because of the general work schedule, traffic peaks during certain times of the day; when people are going to work and when they are coming from work. Further, vehicle generate a significant amount of green house gas emissions, apart from contributing immensely to air pollution (Anand, Quak, Van Duin, & Tavasszy, 2012, p. 111). In this paper, a disruptive model is developed that can help reduce vehicle traffic in roads in cities by nearly a third, resulting in significant reductions in pollution and wasted productivity and productive time. The paper fist discusses the population that has a problem and how it will benefit from the business idea, the proposed business model, as well s critical success factors for ensuring it succeeds. The feasibility of the idea is then evaluated before a conclusion is made

The pilot will be run in Sydney; reports show that Sydney workers spend an average of three weeks each year while stuck in traffic and is costing them averagely 6% of their salary (Farquhar, 2016); this leads to lost valuable productivity and productive time that affect the economy adversely (Badger, 2013). A survey of commuter data showed that Sydney is the worst affected by traffic jams in Australia. The lost wages, based on average annual wages translates into $ 3308.30 in lost wages every year by workers (Farquhar, 2016). Based on a global ranking of cities with the worst traffic clogs in the world, Sydney is placed at position 17, making it among the cities with the worst traffic problems in the world (Farquhar, 2016). With many car owners and only 14% of residents being able to access their workplace within a 45 minute time period, the proposed disruptive solution would greatly aid Sydney workers and reduce pollution as well as reduce the traffic jam problem (Davies, 2015)

The Proposed Solution

The proposed business model is a ride sharing/ carpooling approach in which residents share rides and so leave more cars at home. The solution will work based on a ride sharing application that users install on their devices (where devices primarily imply smart phones or tablets; it can also be installed on a computer) for free. When they install the application, their details are taken, including their phone numbers and they can link their credit card numbers of mobile payment wallets to the application. They also get to register their car, with the car data updated using the State vehicles database; this will update the insurance and vehicle safety numbers as well. Once they have registered, when it is about time to get to work, the user can search around for other vehicle owners and will inquire on availability of commuter space; the system works with GPS and maps so that the nearest vehicle is shown on a screen. When there is space, the nearest vehicle owner will send a direct message and the person can book a ride on the specified vehicle. If a vehicle can carry say five people, it will be carrying an additional four people plus the driver. The driver then becomes ‘a taxi driver’, and the other occupants pay a small amount for fuel and service to the vehicle owner. The application will also work in a way that the ride sharing people’s destinations are along a give path or general direction so they can be dropped conveniently as the vehicle owner also gets to work.

The car owner gets ‘paid’ by other users, so they incur minimal or no expenses in fuel and maintenance. The other commuters save themselves the fuel cost to get them to work. The most important benefit will be the ability to reach their workplaces on time because the system will remove almost a third (as a minimum) of the personal vehicular traffic from the roads. The other benefit will be a general reduction in the overall fossil fuel use and consequently, a significant reduction in the amount of pollution generated as a result of a significant number of cars being removed from the roads, especially at peak hours when people are rushing to work (Conner-Simons, 2017; Seyedabrishami, Mamdoohi, Barzegar, & Hasanpour, 2012, p. 331). Apart from the commuting workers benefiting, the economy will also benefit significantly die to reduced time and productivity wasted on traffic jams. Going by the earlier data that Sydney commuting workers spend an average of three weeks in traffic jams, losing about $ 3308.30 in wages, the economy and the individuals will benefit greatly if this lost revenue and productivity is reduced even by half. 

Feasibility Analysis

The ride sharing application will be disruptive; the application will be developed by the entrepreneur and tested to be working okay. The application is to be developed fully in house so as to allow customization and scalability in future, as well as adding other features and services. Once the application is developed, aggressive marketing will be done through social media until saturation is obtained and also using some form of mass media as proposed by Sharma & Bharathi ( 2013). The application itself will be fee to download and will be compatible with popular platforms including Android, Apple, and Microsoft. Once downloaded, the user details will be captured together with a linked payment method; this method is linked to a payment processing system. The taking of user details including their phone numbers will enhance security because known risk persons (such as convicts on parole or those with a criminal history can be known and denied from registering). Whenever a commute offers their car for use by others to pool, he/ she receives payments from the other users based on the distance traveled. The revenue model will be profit sharing where the application developer (lets call it SydShare) will take a percentage from what the car owner receives; say 50% for developing the application and creating the infrastructure to manage the system. The only investment SydShare will make is in developing the application, its maintenance, and linking it with other systems such as pay processing, banking, and links to vehicle registration system. Such a system fits with the new business model requirements as put forth by Achtenhagen, Melin, & Naldi (2013, p. 439)

Of the about 117000 Sydney residents that are in full time employment, two out of three commute to work using private transport, implying 78000 cars on the road. If 30 % of these vehicles adopt ride sharing, the figures mean 23000 users; if each on average shares a ride with two other people daily, paying $ 3 per day, the company will generate about $ 69000 daily in revenues. Using conservative figures, say SydShare makes just $ 15000 per day from the use of its application, in a working year, this equates to $ 3.9 million. The cost of developing and maintaining the application would be about $ 150000 per year, while a core staff and equipment, as well as logistics and wages would cost another $ 450000 per year. The company would then make Pre-tax profits of about $ 4.3 million annually. Taking out advertising and other costs plus 30% tax, the annual profits would be in the range of $ 2 million. This analysis shows that the idea is practical, feasible, and likely to be accepted by the general public and authorities, and receive wide adoption.

Revenue Model

In undertaking this project, all grup members were assigned roles as follows;

Student name	Student Registration	Telephone	E-mail	Role
				Team leader
				Scribe
				Moderator
				Group member

The roles were given based on ability and willingness to undertake the role. The team leader was responsible for offering overall leadership to the team and acted as the project manager; the tam leader was required to fully understand the concept and help inspire the team to develop a feasible business idea. The scribe was in charge of communications, taking down notes and sharing findings with team members as needed. The moderator conducted the meetings and allocated time for people to speak while helping combine different ideas and moderate discussion. The group member contributed ideas and participated in team activities. My role in the task was to act as the team leader. It was challenging at first since while I understood project management techniques and approaches, this did not seem a ‘real project; in the traditional sense, such as construction g a house. However, upon further reflection and evaluation, I realized that project management techniques and approaches could be used in this task. To ensure we had the best idea, I first proposed that the team has a status meeting in which we confirmed roles, originally, I had wanted to be the moderator, but after everybody else decided what they wanted to do; the others proposed I become the team leader.

In the status meeting, while everyone wanted to go straight to discussing the idea, I proposed that we must adopt a structural way in which to undertake the task, proposing to use agile methods in undertaking the discussions. My idea was that we should meet at least once everyday, with three physical meetings every week and the other days we met through an online collaboration platform. In so doing, I aimed at having the best ideas generated: each person was tasked wit coming with three distinct ideas based on the course requirements and presenting them.  The team would then discuss each idea in detail, using brainstorming techniques and approaches and then evaluate each. In order to be objective, all ideas were given scores in terms of originality, ability to meet a need in the population, practicability, and profitability. Th approach to give weights and scores to each idea and create scores of between one and ten for each criteria was motivated by McNamara, Peck, & Sasson, (2013, pp. 478-487). The weighting would also help the team avoid bias and determine, using an objective model, the best idea to use. My proposals were the following;

• An online based study method for lower grade children
• A bicycle hiring business for city commuters
• Solar glass films to capture free energy in buildings

Team Roles

During the analysis, my ideas performed well, but the chosen idea was the best under the circumstances; it fulfilled a desire for technological solutions that are easy to implement to solve significant contemporary problems, such as urban transportation which this team sought to solve. Apart from giving the team the idea to use an agile approach to coming up with a suitable solution, I also proposed that ideas be discussed by all and the best idea be arrived at after an objective evaluation using the weighting criteria, instead of a subjective approach as alluded to by Velu & Stiles, (2013, p. 446). Indeed the team greatly appreciated these ideas and they were unanimously adopted. To do this, I had to prepare the minutes and topics of discussion for the first two meetings to set the right tone for undertaking the project. Below is a sample of meeting one minutes

Minutes

Date

Venue

Members Present: 1. 2. 3. 4.

Minute 1: How to conduct the brainstorming exercise

The scribe proposed that we generate as many ideas as possible and then discuss the and come to an agreement on which to work with The team member was in agreement, although the team leader offered an alternative idea The team leader proposed that instead of random discussions, an elaborate approach and framework was needed to undertake the project. The team leader then proposed adopting an agile approach in performing the task, where we would meet regularly and share progress as well as challenges The team leader also proposed that each team member was to come up with at least three well thought-out ideas to be discussed in the next meeting The suggestions were accepted and adopted by the team

Minute 2: Meetings

Given the team leader had suggested we use the agile framework, the moderator proposed that we should have three face to face meetings and on other days, use an online chat tool for collaboration; where we would also communicate with e-mail The team member and scribe seconded the idea and it was adopted

Minute 3: Determining the best idea

The team leader opened the meeting and invited ideas on how to determine the best idea The scribe suggested that once the ideas are put forth, we would discuss each and then vote whether to shortlist it, and then discuss them again until we reached the best idea by voting this was applauded by all, though the project leader proposed a more objective approach and explained the use of a weighting approach The team member asked for this to be explained further the team leader explained and it was adopted with the assessment requirements being given a score to form the basis for weighting  The moderator suggested weights for each assessment area and was seconded by the scribe; these were then adopted as follows Aspect Weight Originality and novelty of idea 15% Ability to solve an existing problem in the population 25% Business model (suitable for circumstances) 18% Feasibility 20% Profit potential versus startup and capital costs 22% Total 100%

Minute 4: Tasks and Time

The scribe proposed that we would discuss the ideas in the second meeting, and each meeting would have the ideas of two team members discussed and concluded. The next physical meeting would involve discussing the ideas of the other two and arrive at the best idea to use This was seconded by all and adopted The next phase would be to prepare the individual and team reports which was also agreed to and adopted; team members had seven days to write their reports

Minute 5: Closing and adoption

The team resolved to adopt all the resolutions and meeting was closed. It was agreed the next meeting would be held in two days time

Name Signature

 

While undertaking the discussions and giving each idea a score, there was disagreement because we had very good and innovative ideas to choose from. While we had agreed to give each idea a weight based on the set criteria in meeting one, we had not discussed how the scores would be given. This created a considerable problem and disagreements because each person gave their respective idea the highest score. I understood this to be natural and was at a loss on how we could move forward. We had not developed a means for resolving conflict in the first meeting and this was becoming a risk to competing our brainstorming on time and developing the best idea that could be commercialized. An idea came to me and I though; why can’t we get the averages’? Everyone took notice of that statement; I was not seeking democracy as a way of developing a business idea, but I sought impartiality and a method to move forward.

All team members agreed with the approach, and after each person presented their business idea, the scribe took the scores given by each respective person for each criteria and compile and come up with an average figure. This would ensure that even if the idea generator was biased, the votes from others would neutralize this and give a more objective score. The team was thus able to go over all the fifteen ideas proposed by members within a two days and come to a conclusion on which had the highest score and which we would then proceed to discuss. We were able to achieve the course objective and I am happy that I made my small contribution to help the team resolve issues and move on. In summary, I helped the team determine a framework that was systematic and that would help us meet out objectives. I also helped the team adopt a more objective way of giving scores to the different ideas so that there was no bias and unending arguments on the best idea. Overall, I feel I played my role as a team leader and a team member

Writing an elaborate but realistic business plan with feasible budgets and financials; this will ensure  the plan is sound and can be implemented; the business plan will also help in developing the schedule and can help secure necessary funding

Project management plan: Using project management techniques, including a feasible schedule, extensive planning and a project scope will ensure the team sticks to the important issues that will ensure success.

Effective communication and team dynamics will ensure the team understand each other and what is to be done at each stage

Feedback and monitoring will enable the team evaluate their progress at each stage during the implementation of the business plan (Christenson& Christenson, 2010)

References

Achtenhagen, L., Melin, L., & Naldi, L. (2013). Dynamics of Business Models – Strategizing,Critical Capabilities and Activities for Sustained Value Creation. Long Range Planning,     46(6), 427-442. doi:10.1016/j.lrp.2013.04.002

Anand, N., Quak, H., Van Duin, R., & Tavasszy, L. (2012). City Logistics Modeling Efforts: Trends and Gaps – A Review. Procedia – Social and Behavioral Sciences, 39, 101-115.             doi:10.1016/j.sbspro.2012.03.094

Badger, E. (2013, October 22). How Traffic Congestion Affects Economic Growth. Retrieved from  https://www.citylab.com/transportation/2013/10/how-traffic-congestion-impacts-economic-  growth/7310/

Conner-Simons, A. (2017, January 4). How ride-sharing can improve traffic, save money, and help the environment. Retrieved from https://news.mit.edu/2016/how-ride-sharing-can-improve-       traffic-save-money-and-help-environment-0104

Dahl, R. (2005). Heavy Traffic Ahead: Car Culture Accelerates. Environmental Health Perspectives, 113(4), A238-A245. doi:10.1289/ehp.113-a238

Christenson, D. & Christenson, J. (2010). Fundamentals of project sponsorship. Paper presented at PMI® Global Congress 2010—North America, Washington, DC. Newtown Square, PA: Project Management Institute.

Davies, A. (2015, January 25). Why do commuters drive to work instead of taking transit? – The Urbanist. Retrieved from https://blogs.crikey.com.au/theurbanist/2015/01/21/why-do-            commuters-drive-to-work-instead-of-taking-transit/

Farquhar, P. (2016, June 28). Sydney workers spend three weeks a year stuck in traffic. Retrieve from https://www.businessinsider.com.au/sydney-workers-spend-three-weeks-a-year-stuck-       in-traffic-2016-6

McNamara, P., Peck, S. I., & Sasson, A. (2013). Competing Business Models, Value Creation and Appropriation in English Football. Long Range Planning, 46(6), 475-487.   doi:10.1016/j.lrp.2011.10.002

Seyedabrishami, S., Mamdoohi, A., Barzegar, A., & Hasanpour, S. (2012). Impact of Carpooling on  Fuel Saving in Urban Transportation: Case Study of Tehran. Procedia – Social and         Behavioral Sciences, 54, 323-331. doi:10.1016/j.sbspro.2012.09.751

Sharma, V., & Bharathi, V. (2013). Social Media for Start-Ups – An Effective Marketing Tool.      SSRN Electronic Journal, 1. doi:10.2139/ssrn.2333262

Velu, C., & Stiles, P. (2013). Managing Decision-Making and Cannibalization for Parallel Business Models. Long Range Planning, 46(6), 443-458. doi:10.1016/j.lrp.2013.08.003

Zheng, S. (2017, April 20). China has over 300 million vehicles … almost US? total population.  Retrieved from https://www.scmp.com/news/china/economy/article/2088876/chinas-more-   300-million-vehicles-drive-pollution-congestion