Something like skyTran is going to be super important for future cities. A regular gasoline-engine car can go 150 km/h, but in our cities they spend half of their time stopped, and so it's common to get 15 km/h in real life. And then you have to find a place to park it! Traditional massive subways and elevated trains are better, but building them is too expensive to space them closely — so unless you're lucky, you have to spend 20 minutes or more walking to and from them. And then they still have to stop every 400 meters or so, because you're sharing the car with other people. So you still end up averaging something like 15 km/h.
A personal rapid transit system like skyTran can have lines spaced very closely — as closely as streets, or more closely — and can actually deliver close to its peak speed of 100 km/h. You could get from any place in San Francisco to any other place in under ten minutes, instead of the hour-plus it often takes at present.
How important is that? The entire benefit of a city is that you're close to many people doing many things. It's being close to people that makes us put up with the pollution, noise, and undesired social interaction that come with cities. But with our current city transport systems, you're within 20 minutes of only about 80 square kilometers, about half a million people. A system like skyTran effectively brings you much closer: you would have 3500 square kilometers within that same distance, about 25 million people, if density didn't change.
That is, with skyTran or similar personal rapid transit systems, you could live in a place that looks like San Mateo or Redwood City, except without the cars — but enjoy even more convenient access to city amenities like good jobs, artisanal toast, live music, and offbeat special interest groups like Postgres, than you can get today by living in the heart of San Francisco.
There's a critical mass needed to get benefits like this, and I suspect it's close to the half-million people I mentioned above: on the order of a couple hundred kilometers of transport line, densely covering an area of several tens of square kilometers: an up-front investment on the order of a billion dollars. But maybe skyTran's Tel Aviv project will surprise me and transform Tel Aviv more than I expect.
In https://news.ycombinator.com/item?id=9788092 I did the calculations to show that you could get substantial benefits by replacing even the elevators in a single skyscraper with a skyTran-like system. The numbers only get better as the system gets bigger. Scaling, far from being a problem, is the solution. Eventually you will run into bisection bandwidth problems, but only at scales far, far larger than our current cities. A SkyTran track transports pairs of people at about 3Hz; 200 parallel SkyTran tracks across the width of San Francisco could transport SF's entire population from one side of the city to the other in 22 minutes (plus the transit time of 6 minutes), or 11 minutes if they shared cars.