Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

My Thoughts

How Much Would the Hyperloop Cost, and Would It Be Worth the Expense?

The Hyperloop has progressed to the point that it is possible to do an extremely rough estimate of the system’s costs. Obviously, this estimate is pure guesswork because the designers have only scratched the surface of the engineering needed to build a working system, but it is a good starting point.

It would cost around $5 million to build a mile of Hyperloop, and Business Insider writer Michael McDonald estimated. That means it would cost about the same as a mile of a new four-lane highway. The cost of building a mile of a four-lane highway from scratch is between $4 million and $6 million, according to the American Road and Transportation Builders Association (ARTBA).

Hyperloop X

Hyperloop Cheaper Than High Speed Rail

If these figures are correct, Hyperloop would be cheaper than high speed rail; the cheapest high-speed rail line in the world, the Madrid Valladolid line in Spain, cost $6.39 million a kilometer to build, according to Next City. Some other high speed rail lines have cost a lot more; one connecting Frankfurt and Cologne cost $35.14 million a kilometer.

We must keep in mind that these are cost averages. Some segments of a transportation system, such as those through mountains or urban areas, can cost a lot more than average because of additional expenses, such as tunneling. Others, like runs across empty and flat rural areas, might cost far less.

McDonald arrived at his costs by looking at the price of concrete for the pylons, which he figured at $3.46 million apiece, and the tube, which would cost $1.5 million a mile. Under his estimates, it would cost $3.8 billion for a 382-mile Hyperloop track connecting Los Angeles and San Francisco.

That estimate is probably far too low because McDonald does not figure in land costs, which I imagine would be high in California, legal fees, and the costs of incidentals such as stations. My guess is that the real price would double that to around $6.92 billion or nearly $7 billion, which is cheap compared to the estimated cost of California’s high speed rail scheme (around $100 billion).

It’s also fairly cheap when compared to the costs of highways in California. It now costs around $10 million a mile to build an interstate in California and $20 million a mile to build a freeway in a California city, McDonald estimated. Those costs are higher than the ARTBA figure quoted above because they include the land costs; condemning or buying all the real estate for such a project is often the most expensive piece of the puzzle, especially when legal costs are figured in.


These figures are, of course, purely hypothetical because there is no large-scale operating Hyperloop system for comparison. Nor has anybody actually built a system to provide real construction costs.

Would Hyperloop Be Worth the Expense?

Okay, so we now have a rough estimate of Hyperloop’s potential cost, but would it be worth the expense? My answer is yes because of the potential benefits to society, which could be huge.

Just a few of the potential benefits include:

  • Alleviating high housing costs by enabling working- or middle-class people to live in more affordable outlying areas and to commute to jobs. This could really help in places like Central Colorado’s ski area and the San Francisco Bay area that are suffering from serious housing shortages. Hyperloop would enable Colorado ski workers to live in affordable communities on the Front Range and Bay Area residents to buy houses in Bakersfield.


  • Alleviating income inequality, poverty, and unemployment by allowing more people to take higher paying jobs in more expensive areas without the expense of moving there. A person could take a job in New York City and live in an affordable place like Scranton, Pennsylvania, for example. This could really help working- or middle-class people that are being priced out of cities like Denver.


  • Allowing more people to enjoy a middle-class lifestyle by letting them live in areas where they can afford a home but commute to jobs in more prosperous regions.


  • Greatly reducing greenhouse gas emissions and potentially limiting global warming.


  • Alleviating labor shortages in areas with high housing costs or housing shortages.


  • Alleviating traffic congestion by getting cars off the roads.


  • Giving many people more disposable income by reducing or eliminating the need to own a car for transportation.


  • Creating large numbers of new jobs, including ones operating the Hyperloop itself and at facilities like fulfillment centers that will be built to take advantage of it.


  • Giving people many more recreation and vacation opportunities. More people would be able to enjoy activities like skiing or swimming at the beach because they would be able to afford to travel to ski areas or beach resorts. This could boost the economy in resort regions.


  • Increasing the amount of travel people do for business and other purposes.


  • Eliminating the need for airports, rail lines, and other expensive transportation infrastructure.


  • Eliminating the noise and pollution created by airliners.


  • The building of Hyperloop would be a massive stimulant to the economy, much as the construction of the Interstate Highway System. This could create thousands of jobs and pump billions into the economy.


  • The construction of Hyperloop could spur economic development, such as the construction of new cities and the building of new industries or infrastructure that could further boost the economy.


As you can see, the benefits from Hyperloop would far outweigh the costs. Now we need to ask ourselves if we have the political will to build it, although there does appear to be some political support for it.

Afshin Pishevar at Hyperloop Tech's facility in downtown LA.
Afshin Pishevar at Hyperloop Tech’s facility in downtown LA.

Hyperloop Technologies Inc.’s counsel Afshin Pishevar told The Wall Street Journal that he visits Washington, DC, to meet with U.S. Department of Transportation officials about once a month. He thinks the Department could spur the development of Hyperloop by setting up a specialized regulatory body to deal with the new technology.

What’s more impressive is that Pishevar, who is the brother of the founder of Hyperloop Technologies, Shervin, stated that pairs of cities were competing to be connected by the first Hyperloop line. He did not say where those cities were.

It looks as if Hyperloop is just a little closer to reality than we thought. Hopefully, this technology will get built and overcome the political obstacles. It could form the basis of a new age of prosperity for America and the world.