What if you could book space on a road in exactly the same way as you made a restaurant reservation.

1. Demand Responsive Transit
Brokerages
Actors within the Demand
Responsive Transit Exchange

2. Current State
• In Singapore, this is
the current way
people can find cabs.
• A static poster shows
the numbers of cab
firms.
• We propose a bid/ask
system so beloved of
financial markets

3. Road Pricing
• If roads are "leased" to private firms who have to make profit (i.e.
prove their efficiency according to utility) in order to keep the
franchise, while at the same time adhering to minimum standards
of road maintenance, safety and transit throughput, stipulated by
the contract terms, we would effectively have a better system of
road management, no?
• The key is to provide enough competition and policing to keep
firms from colluding to deliver less than stellar service.
• One could argue that the firms never own the roads per se, just as
one never "owns" a hotel room (ahem, www.guestinvest.com) or
that no large user ever "owns" spectrum.

4. Road Pricing
• A DRT Exchange adds yet another performance layer onto the
road-spacetime usage system. Not only are the roads maintained
according to the utility motive (measured by economic,
environmental and social viability), but now there is an incentive for
the road users themselves to find efficient ways to use that
roadspacetime. The only way this can happen is if we apply some
sort of pricing mechanism to road-spacetime.
• e.g. I want to buy 20 minutes worth of travel on the M62 at 08:00
every weekday from Monday Jan 5th 2009 - Dec 18th 2009. On a
DRT Exchange, this would be priced up. A DRT Broker would have
to buy that time from the RoadSpaceTime operator and then resell
it. Due to competition, there would be price discovery.
• There would obviously be a "turn up and pay system“ in addition to
the contract system – much like for hotels.

5. Road Pricing
• (Bandwidth companies do this already - you buy e.g. 15Gb a
month of downloads and then you pay per Mb over if you exceed
the limit)
• Of course, if I end up on the motorway for 22 minutes, I would
have to pay the per minute cost for the 2 extra minutes. This can
be done easily enough with existing technology (on ramp /off ramp
cameras to get check-in, check-out).
• By definition, it now makes sense to share vehicles. We would find
courier companies choosing to use empty capacity in passenger
vehicles (in the boot etc) to carry parcels.
• We need to be able to give roadspacetime users a full spectrum of
service choices across a full range of prices.

6. The DRT Broker
• A DRT Broker would be an important participant
in a DRT Market.
• The Broker buys wholesale transit contracts from
Market Makers on the exchange and sells them
to roadspacetime users.
• In the first generation Texxi model, this will simply
be to have “packaged trips” a type of ride sharing
where we find people with compatible itineraries
and allow them to share a vehicle.

7. The User
• The User is anyone needing to go from point A to
point B who is prepared to share a journey
• If there are not enough co-riders (a likely
occurrence at the outset of implementation of an
exchange), the Market Maker will have to buy the
empty seats
• For users who use the service frequently, longer
term contracts will reduce the price per trip
significantly

8. Adaptation of User behaviour
• A most important point is to get users
used to a reliable service for 6-12 months.
• Moving away from the private car is not
going to happen unless the users feel that
the service is reliable.
• Thus “Liquidity” is provided by the
exchange taking up the slack (buying
empty seats in a ride) to encourage the
drivers to keep

9. “Shows”
• In trading operations, there are what is
known as “shows”.
• Many Market Makers will provide prices
on financial instruments at any given
time, representing this as a bid/ask.
• When one buys holiday currency, one is
familiar with this: there is a buy price (ask)
and a sell price (bid) compared to the
local currency for the currency you wish to
buy

10. Dynamic Pricing
• Many hotel chains have now moved
toward Dynamic Pricing.
• This model has done away with the fixed
(or rarely changed) notion of room rates
and instead adapts to demand.
• If we can accept floating prices for
houses, why not for transit?
• It has been shown that this works for hotel
rooms, now why not taxis?

11. Overcharging
• If there exists sufficient competition, if the
authorities make sure price fixing is
punished and if people have the right to
choose to purchase or not to purchase,
there can be no overcharging