Cover Story


Lord, Won’t You Buy Us a Mercedes-Benz?

Quoted

The American way is to court consumers with as many bucks as possible if you want anything to happen in terms of selling products and services.

Cover

Cover image for Aug 10, 2011

David Cheever started his decades-long marketing career in Hawaii as VP of Marketing for a local bank. Eight years later, he launched his own marketing business, serving banks, food companies, retailers, lawyers, architects, contractors, resorts, tech companies and non-profits.

He has absolutely no business or personal interest in Mercedes-Benz and sees what he calls “Mercedes Buses” strictly as a marketing program. His wife has a car. He rides a bicycle. And this is his Grand Plan…


It’s been said that the powerful Road Gang (cars companies and their dealers, oil companies, tire manufacturers, civil engineers, road paving companies, etc.) has successfully marketed us into today’s transportation mess on Oahu. If that’s the case, can we find an “island” way to market our way out of it?

In their presentations to various groups, vocal opponents of Honolulu rail and bus mass transit strongly state that urban rail and bus ridership has been sliding for several years across the US. But let’s leave that argument aside.

Outside of the Box

Let’s look at reality. My informed estimate (after speaking with several top-level media and advertising experts) is that if one could tally up all the money spent in Honolulu annually to encourage people to buy and/or drive a car, it would come to, at least, $20 million. That healthy figure includes national TV, radio and print auto ads; regional dealer group TV, radio and print ads; individual and dealer TV, radio and print ads; classified used car ads; throw-away used car paper; and ads for gas, tire companies and rental cars.

That’s free enterprise, which has very, very successfully convinced us that we should have as many cars as we want and be able to drive them wherever and whenever we want. The consequence, however, has lead directly to the constant traffic chaos on Oahu.

The American way is to court consumers with as many bucks as possible if you want anything to happen in terms of selling products and services. Spending $20 million to court consumers into cars is a dazzling amount, especially compared to the zero dollars spent on marketing us into our bus system.

In a way, this scene is shocking, because when you think about it, it’s surprising there is any ridership of TheBus.

Let’s establish another key point important to this transportation discussion. Detroit and Tokyo have been hugely successful in marketing us to believe that a car is slick, but this group hasn’t put much effort into making buses slick or exciting. Have you ever seen any Cadillac, Chrysler, Lincoln or Lexus buses? Many of us have a hard time seeing ourselves on a city bus. Your car has leather, a CD player, air conditioning, power everything, beautiful style and brilliant paint. The current city buses can’t compete. And that’s the first marketing mistake. It’s just not a fair fight.

Regardless of what we may believe, we cannot build our way out of Oahu’s transportation mess by continually spending millions to widen lanes or by constructing an elevated toll roadway. Neither is limiting cars per family a political alternative. There will be serious gnashing of teeth, but we must find a suitable way to seriously limit the number of cars on our roadways if we really want to undo this highway bedlam. We need to change the product and the system drastically.

Introducing the Grand Plan

This plan looks at bus transportation on Oahu from a practical marketing perspective. And many parts of it will cause gasps and consternation throughout the community. But it is a pretty solid solution that will be elegant, cheaper and less disruptive than rail or elevated roadways.

Mercedes-Benz builds gorgeous buses. Let’s buy all Mercedes buses for Oahu. Seriously, that way a spouse leaving in the morning can say, “Honey, I’m taking the Mercedes to work.” Think about it. Mercedes can build these buses with leather seats. No tacky “TheBus” signs on these vehicles. They would be painted real Mercedes colors. For long-haul routes, let’s look at having uniformed attendants on all of these Mercedes buses. The attendants’ main role would be rider relations. This is especially helpful for those who usually don’t take the bus. Some bus drivers are notoriously curt when asked questions about routes, stops, etc. The attendants would look after their buses and be rewarded for keeping them clean. Riders would nominate “Attendant of the Month” and “Driver of the Month,” with hefty awards in the $1,000 range, hopefully getting employees’ attention.

What about Starbucks coffee (or a local competitor’s coffee) served in the mornings? This would also be for the attendants to handle. Free papers could be offered for non-techies. And certainly each Mercedes bus would have wireless Internet service.

Oahu beautifully lends itself to long-haul routes. These routes are: 1) Makaha to Hawaii Kai; 2) Wahiawa and Mililani to town; 3) Kailua loop; 4) Kaneohe loop; 5) airport to Waikiki; and 6 and 7) around the island both ways. Additionally, all major linear streets would be served: Farrington; Nimitz; King, Beretania; Waialae; and, of course, the freeways.

At this point you might correctly ask, “But how do riders get down out of the valleys and off the ridges and outlying suburban areas to these large-bus, long-haul routes without using their cars?”

Mercedes again. But, in this case, these would be much smaller, jitney-type Mercedes Sprinter minivans. Again, these Mercedes Sprinters would be outfitted with leather seats, wireless Internet and in-seat CD players, but no attendants.

This service would be very high frequency; thus, it is estimated it would take about 400 of these mini-Mercedes to feed the long-haul routes. In places like Kaimuki and ‘Ewa, there would be a frequent web of Sprinter Mercedes. Even Tantalus and Round Top would be served by Sprinters.

The idea is that the Mercedes Sprinter would cover neighborhoods so well passengers would have to walk only two to three blocks maximum (or no more than one quarter of a mile), which is the maximum distance experts say pedestrians are willing to walk. But that quarter mile would be good for most of us. Sprinter service would also be free.

To make this system really user-friendly, a web site with several unique features would be accessable to passengers: riders would be able to type in their home address and their destination(s), then system would tell them exactly what and time and which bus(es) to take. More importantly, bus schedules would be in real time. So, for instance, a student could see exactly when the next Sprinter or Mercedes LH (short for “long-haul”), or a combination of the two, would get him or her to school on time. Same for us workers.

All My Friends Drive… Porsches?

Now comes the hard part. Remember, the objective is to get big numbers (say, one-third) of cars off the roadways in order to offer a beautiful alternative. How are you going to pay for the big ones and the small ones, too? The attendants? The wireless Internet? And all that other stuff you mentioned?

For this, we need to turn to the free market advocates and talk market pricing to accomplish the Grand Plan. Keep in mind, too, that we will only really solve our Oahu transportation mess by putting far fewer cars on the road, and that, in all likelihood, cannot be accomplished by limiting cars per family, road pricing or construction of more and wider roads.

The key ingredient in the Grand Plan is called Freedom Fuel. Most people would say an automobile gives them freedom, but in reality it ties them to sitting in traffic, often times for hours. They are not free to read a newspaper, book or Kindle; apply makeup; do their homework; eat; watch a DVD or talk safely on their cell phone.

Freedom Fuel allows all this in a Mercedes–with a driver no less. Interestingly, the respected Pew Research Center conducted a survey of 1,048 citizens drivers a few years ago. The results pointed to disillusionment stemming from their automobiles, more specifically sitting in horrific traffic and the bad behavior of other drivers–to name two in particular.

Oahu drivers consume about 300 million gallons of gasoline annually, which means we send billions of dollars to Canada and the Middle East. Under the Grand Plan, Freedom Fuel (gasoline) would cost about $7.50 per gallon, which is just what gasoline costs in most of the rest of the world, with the exception of some oil-producing countries like Saudi Arabia and Venezuela.

If this pricing mechanism is successful and individual car use drops by one-third, the $3.00 over the current price would generate an estimated $300 million to fund the Grand Plan. That revenue totals 100 million gallons times $3 per gallon.

Rapid Rewards

Once you get over the gasps and possible hostility to this plan, here are the advantages:

1. Deaths and injuries to fewer people. With far fewer cars on the road, it is only common sense that about one-third fewer of our neighbors, friends and family members will perish in auto accidents and as pedestrians. Think about saving between 50 and 75 lives annually. Isn’t that reason enough to get started on the Grand Plan right away? And the lives saved (whatever the actual number) says nothing about the hundreds of auto-related injuries that would be prevented.

2. Cleaner air. Mercedes makes two splendid energy-saving, “clean” buses: a fuel cell bus and a diesel/electric hybrid, both of which would be perfect for cleaning up Oahu’s air. And, with fewer cars, there would be less pollution as well.

3. Cleaner water. Without about 400,000 cars leaking oil and gasoline onto our roadways and parking lots, it stands to reason that our precious ground water would be cleaner. And what about Oahu’s streams? Same reasoning holds.

4. Energy self-sufficiency. With all the focus on ethanol and bio-fuels, we are talking about years to bring about any impact on our use of alternative fuels. It is admirable that the state government wants to reduce fuel use in Hawaii by 20 percent by 2020. Is that good enough? The Grand Plan beats that timeframe by years.

5. Less Disruption. You think traffic is bad now, just wait until the largest public works project ever undertaken, either by building a railway or an elevated roadway, is in full swing on Oahu. Traffic will be tied up not for hours, but years. I Repeat–years.

6. Less Cost. The latest estimate for rail is $5 billion. It’s really unfair for politicians or other public officials to make a statement like that. When, and if, rail gets underway, it will be another three to five years (and forget $5 billion), because we all know how prices escalate and deadlines deferred over time.

Let’s look at the cost of all these Mercedes buses. If the Oahu transportation system buys 400 of the Mercedes Citaro model (with leather seats, wi-fi, etc.) for the longitudinal long-haul routes (Budapest just bought 500, and if they can do it, why can’t Honolulu?) at $400,000 each, that would be $160 million. Four hundred Mercedes Sprinter minibuses at $100,000 each, to serve the ridges and valleys, would add another $40 million, for a total of $200 million.

With $300 million in revenue from the $7.50 a gallon Freedom Fuel to take care of all the capital costs, plenty would still be left for wireless Internet, uniformed attendants, rewards for great service, free newspapers–and most important of all, a hefty subsidy so the fare could be between $0.25 and $0.50 for everyone for the long-haul routes. Because, remember, Mercedes Sprinters are free.

7. Less wasted land. Building rail or an elevated tollway, will eat up more of our precious land on Oahu. It is estimated by one of the top land planners in the Pacific that presently 25 percent of the Island’s urban core is devoted to the automobile when you consider all roadways, streets, freeways, parking lots, gas stations, driveways and repair shops. This is a stupendous cost that can’t go on.

8. Have plenty of cars. You can have as many cars as you want, of any type you want, and drive them wherever you want. But instead of driving a car constantly for any reason (or no reason), anytime, anywhere–driving gets back to what it once was–fun.

Under this plan, you might gather your neighbors and friends for a Costco run, same for the grocery store. Think of the social aspects of this plan. Instead of everyone getting in their cars alone to shoot off to Costco or Longs, now you gather a group, which also could be fun.

You want a car show? You want to race? Great. We provide those virtually with noise and fumes and the whole works. But no injuries and no use of precious oil.

Hurdles

Let’s acknowledge some businesses would suffer under the Grand Plan.

1. Car dealers. For a concept like this, one can expect this group will mount its most strenuous lobbying effort ever. That debate would be welcome, since they must face this situation either now or later. Better sooner rather than later.

2. Tire businesses. Like the car dealers, these businesses have had it very good for years, swept along by the $20 million spent annually to push cars.

3. Oil companies. Same as above.

4. Paving companies. Same as above.

5. Media companies. This much advertising yanked out of the marketplace is consequential. Almost none of the media in Hawaii is locally owned any longer, so their mainland parents would be unhappy with smaller profits; but like others, they must face this whole situation now or later.

6. Visitor ground transportation companies. Included in this category are rental car companies, tour buses and vans. Visitors might actually like riding in a Mercedes to Sea Life Park, Ala Moana Shopping Center or elsewhere.

7. Repair shops. Especially for the small guys, this will be bad. But maybe they can turn to selling and repairing bicycles and mopeds, which should blossom under the Grand Plan.

You might ask, are there any exceptions? No. Even the US Post Office would have to get terribly efficient at delivering the mail and might even go back to more walking or even bicycling routes.

What about commercial vehicles? Again, businesses would have to come together not in resistance of trade, but to create a consortium to cut down on the overlapping deliveries we’ve all experienced. Besides, if their trucks are not tied up wasting time in traffic and fuel, they just might come out ahead.

One last point. What could we do with the 500 buses the city currently owns? One idea is to attach them two-by-two, put in small kitchens and bathrooms to make terrific affordable housing.

This is all marketing. And believe me, it works.


Brazil Firing on All Cylinders

In Brazil, with a population of nearly 200 million residents, every 5.6 people in the country has a car…adding up to nearly 36 million “coches” or “automovils.” Brazil’s car market is almost totally dominated by alcohol-powered cars.

Brazil is the world’s second largest producer of ethanol fuel, and the world’s largest exporter. Together, Brazil and the US lead the industrial production of ethanol fuel, together accounting for 88 percent of the world’s production in 2010.

In that same year, Brazil produced 26.2 billion liters, representing 30 percent of the world’s total ethanol used as fuel. Now, Brazil is considered a biofuel industry leader, a policy model for other countries; and its sugarcane ethanol is considered, by some experts, to be the most successful alternative fuel to date. (This raises the question…why aren’t we doing it here?)

Opponents, however, say that the successful Brazilian ethanol model is sustainable only in Brazil due to its advanced agri-industrial technology and its enormous amount of arable land available. There are no longer any light vehicles in Brazil running on pure gasoline. Since 1976, the government made it mandatory to blend anhydrous ethanol with gasoline. The Brazilian car manufacturing industry developed flexible-fuel vehicles that can run on any proportion of gasoline and hydrous ethanol, making flex vehicles a commercial success

For the past 21 years, the best-selling car in Brazil has been the cheap, supermini Volkswagen Gol (base price: 28,890 reals, or about $18,000).

VW Brazil is gearing up to sell 1 million vehicles by 2014, and the company has already unleashed a flood of new products. The VW appears to be making good on its earlier promise to take the lead in Brazil’s car market.

Note: If you’re visiting Brazil from Hawaii, remember this–driving in slippahs is illegal and resting your elbow on the window sill can get you fined.