Is Hyperloop Transportation Technologies Just Vaporware?

Pods packed with people glide through tunnels at more than 700 miles per hour, before pulling into stations where the passengers disembark into clear air knowing they’ve saved time, energy — the system creates more than it uses — and money. These travelers casually pass over great distances with great speed and they trust the hyperloop that carries them. It’s part of the fabric of their society, a web of red lines on every map.

That’s the future envisioned by Hyperloop Transportation Technologies co-founder Bibop Gresta and sold for at least $30 million in venture capital to investors, eager to see a transportation network originally conceived by Elon Musk (check the 2013 whitepaper) built to spec. What’s less clear than Gresta’s vision is how the company will achieve it. The company is one of several working to realize some version of Musk’s hyperloop, predicted to cut the trip between San Francisco and Los Angeles from five hours to a mere 30 minutes.

Unfortunately, HTT has yet to conduct a public test of its system and it’s seemingly missed every public milestone since it spun out of the JumpStartFund (a crowdfunding platform). It relies on a volunteer workforce to put promises from its executives into a system that could work in the real world.

Gresta and chief executive Dirk Ahlborn were the first two full-time employees at HTT. The duo have made a steady stream of announcements about the company since its early days about its structure. From the start, Ahlborn has sought to out passionate minds, stoked on hyperloop and willing to work without a paycheck.

“We call it crowdstorming rather than brainstorming,” Ahlborn told Fox News in October 2013. “A lot of entrepreneurs have great business ideas but don’t have time to work on them.”

Since then, more announcements have come, notably, about the company’s deals with various cities across the globe. But announcements about HTT’s technological achievements have been less frequent. A recent press release lauded an exploratory agreement with the city of Brno in the Czech Republic, which wishes to connect to Bratislava, Slovakia. In the announcement, Ahlborn declared: “Since we have solved all the technical issues, it is now crucial for us to collaborate with governments around the world.”

It wasn’t clear what “technical issues” Ahlborn was referring to, since little about HTT’s technology has ever been revealed.

The press has not given HTT a completely free pass. A 2014 Wired article Gresta now describes as an “atomic bomb” demanded proof of concept. But demands have been met with nothing. Given that, the only logical question for skeptics to ask is this: Is Hyperloop Transportation Technologies in the business of selling technology, vaporware, or government contracts?

Roughly 100 volunteers worked at HTT in its early iterations, a number which Gresta tells Inverse has grown to between more than 800 contributors. These people are required to work at least 10 hours a week on HTT, but Gresta says many commit more time to the project. They’re given stock options in return. The idea is that these not-quite-employees will make some money by selling those options when HTT goes public. These people are designing HTT’s systems now in exchange for the promise of a future payoff when HTT finally goes public.

Gresta declined to share with Inverse how large a percentage of the company has been vested or what class of stock its contributors are offered. (Different stock options are worth varying amounts based on a variety of factors.) Gresta did say, however, that none his employees or contributors are in a rush to capitalize on their work.

“We have the opposite problem: We have a huge amount of import on HR, almost 10 people are chasing people to submit their working timesheets,” Gresta tells Inverse. “People don’t care; they want to see us succeed and forget to submit their hours.”

Several reviews of HTT on Glassdoor, the website where current and former employees can share their salaries and their experience with a company, offer a different point of view. One former volunteer — who anonymously posted their story, which means it hasn’t been verified — said “although it’s a crowdsourced company and they boast hundreds of workers, in reality, there are about 25 real contributors who advance the project” and that there’s “not much progress in engineering or anything over long periods of time” and “not much incentive to stay engaged.” They also complained about being compensated in stock when the company doesn’t have any immediate plans to hold an initial public offering.

Other volunteers, both current and former, echoed those complaints. “Provide employees more than stock options. [T]ools, software, hardware, licenses would help a lot […] and boost productivity,” one said, while another cited the fact that they “Only get paid in shares and [had] no stipend to live off of” as a “con” for the company. Still another liked being compensated in shares instead of dollars, but complained that “Communication is [lacking] at times.”

Inverse tried to contact former HTT volunteers directly about the company but those requests were declined. The complaints made on Glassdoor — which, again, maybe has as much value as a review on Yelp! — align with the publicly available information about HTT. Despite its crafted image of a happy volunteer workforce, the company’s repeated delays of its IPO and emphasis on hiring administrators over engineers don’t inspire a whole lot of faith. It’s not exactly clear why HTT would opt for an IPO before releasing a prototype of its product.

The way HTT evaluates its worth is unconventional. It announced in December 2016 that it had surpassed $100 million in total investment. Typically, that would mean it raised $100 million over a series of funding rounds, which is how most venture-backed startups describe their worth. That’s not what HTT meant. The company counted “$26 million in man-hours and services and land rights that are valued at more than $22 million.” Company officials also say that an “additional $29 million of commitments and in-kind investment” have been made by its partner companies.

The figures in that announcement differ from what HTT has said elsewhere and what Gresta tells Inverse. The press release says 603 people, 200 of them “professionals,” have contributed to the project. The company’s new website, which launched at the end of December, says more than 800 contributors are working on the project.

“We are on track with our progress to date. We plotted a course and maintained it,” Gresta told Inverse in December. “The equity funding and in-kind investment from these respected industry leaders is validation of our model, and prepares us for our next steps.”

As HTT hasn’t been on-track with its progress toward an IPO, it’s not unreasonable to wonder if this will course will change again, but more damning is the lack of progress with its systems.

HTT was supposed to break ground on a test track in Quay Valley, California in 2016. It didn’t. Reports show that the paperwork required for the company to build wasn’t turned in until late in the year, which meant local regulators wouldn’t allow construction to begin on the hyperloop. Gresta told Inverse that all this paperwork has now been filed and that HTT should make progress in Quay Valley by February. He also said, later in the conversation, that he wasn’t sure if the company would make the new deadline.

“It has been slowed down a little bit due to the additional permits and environmental studies. We did everything on our side, we did everything on time and on schedule, because we could see going into construction within February, but we don’t know if we will receive the conditional permit within February,” Gresta says. “And, honestly, we aren’t waiting for the American government.”

He says about 20 other countries have expressed interest in HTT networks.

The lack of specifics on Quay Valley is typical of HTT’s announcements to date. Most are carefully worded to drum up attention for a project without indicating much about the company’s plans. A headline claims HTT entered an agreement with Slovakia to make the country a hyperloop network hub, but the release says they merely agreed to explore building such a system. The company says it has projects in the United Arab Emirates, but right now that project is just an agreement to conduct a feasibility study in Abu Dhabi.

A public demonstration of HTT’s system would banish suspicions and put the company on even (or almost even) ground with Hyperloop One, its best-known competitor. But Gresta hasn’t organized any such event, opting instead to show off digital screens it calls “windows” and saying it will use vibranium (the real-life version of the metal used in Captain America’s shield) for its pods. Beyond that, no one knows how it works. Gresta tells Inverse that’s because he’s concerned a competitor will steal the design.

“We are putting together the best talent on the planet.”

“We are not inventing anything. We didn’t have to do a stunt in the middle of the desert to show propulsion,” he says, having a dig at Hyperloop One’s propulsion test last summer. “Our approach is completely different — it uses a new way to see companies. First, if it exists and it’s tested, you don’t have to build it from scratch and you don’t have to invent every single industry that is related to the hyperloop. I know there are other companies that are trying to reinvent the wheel, but we are not. We are putting together the best talent on the planet. It gives us speed and the possibility to use the best skills, the best company.”

Gresta said that Hyperloop One, which he already pressured into changing its name from Hyperloop Technologies, might steal ideas or talent if a test was conducted. He explains that this is why HTT doesn’t share the identities of its contributors.

“The beauty about the model we’ve created is it’s not only a company — it’s a movement,” Gresta says. “I think that’s a piece of our future. I hope this model will be applied to different industries. I think we can solve all the problems of humanity using this approach because we have the technology to do that. We just need to put together the best people and apply it to energy, housing, food, all the industries. And that’s our vision of how we see the world.”

Reading HTT’s breakdown of its contributors’ resumes, it looks like a hell of a movement. There are people with experience from defense contractor Northrop Grumman, automaker Rolls-Royce, and other prominent members of the manufacturing and tech industries. Yet even those lists are suspect, partly because it’s not clear how much time these professionals devote to hyperloop projects and partly because HTT hasn’t been totally honest about its volunteers in the past. The company previously claimed to have contributors connected to SpaceX, a claim that SpaceX makes clear isn’t the case: “SpaceX has no affiliation with any Hyperloop companies, including, but not limited to, those frequently referenced by the media.”

Hyperloop One CEO Rob Lloyd tells Inverse that his company has never hired anyone with any connection to HTT. He says that’s for two reasons: one is that the company’s employees are required to work from one of its research facilities, and the other is that Hyperloop One prefers to hire people who have built something in the past. Both of those requirements are not-so-subtle jabs at HTT’s approach. Hyperloop One makes it clear that it doesn’t view HTT as a threat.

“You can’t do this part-time. It’s a full-time job,” says Hyperloop One spokesperson Rick Jennings. “You can’t moonlight and do this. From my watching this, this is engineers working 18-20 hours a day construction. This is literally, from the test in May to when this finally launches, this is people not even stopping.”

Could HTT be the winner in the race to make Musk’s idea a reality? Maybe, but at this point, it looks unlikely. Outwardly, the company seems more focused on drawing attention to its outreach efforts than in sharing updates on its technological progress. Even Gresta says the most interesting aspect of HTT is how it’s managed to structure itself so that people can help change the world on their own terms. Gresta doesn’t talk technology.

He does, however, concede that there’s a lot of skepticism about HTT and that the company hasn’t done everything possible to counter that. He suggests that the public should have faith.

“We need to just give it a chance.”

“This is something that’s not being developed yet, but as a lot of amazing, new intention, we need to just give it a chance,” Gresta says.

How often has giving companies the benefit of the doubt worked out well for the public? It’s hard to think of a single example, and in fact, people are often advised not to trust companies that rely on volunteers who are wooed by the promise of future payment. That’s how people end up trying to sell beauty products, knives, and other items door-to-door just to make ends meet. While HTT doesn’t appear to be asking people to financially buy-in to its company, but it’s certainly asking them to work another part-time job for no concrete reward.

HTT wants to establish hyperloop as a global system that allows people to get where they need to go with minimal hassle and guilt for destroying the environment. It would be the transportation system of the future, a key part of the world’s infrastructure. But for now the only web HTT has built is one of missed deadlines and fuzzy accounting.

It’s hard news for all of us hoping to shoot through that tube at 700 mph someday soon. At least we’ve got the kids.