> we already have consumer bicycle gears that deliver 97% efficiency: a Dura Ace groupset is expensive compared to the stuff you'll get at Wall-Mart, but they're sold at pretty much every cycling store. I wouldn't be surprised if the Ultegra and 105 (Shimano's next two groupsets by price) were nearly as efficient as well.

There isn't really much difference in efficiency with price in group sets until you get into the really bad cheap stuff. Most of the differences are cosmetic or ergonomic and status related. Chains and bearing and cogs are the only items that affect efficiency and they are all pretty good. Good chain line and proper maintenance and lubrication make more of a difference.

Internal hubs are slightly less efficient overall and this depends a lot on the internal design and which gears are in use. But even these are something like 94% - 97% efficient.

Shaft drives have been the "next thing" since the end of the 19th century but have never managed to combine reliability and efficiency well. I doubt an exposed mesh 90 degree gear set with what look like teeny tiny exposed ball bearings are going to be as efficient after a good splash of water laden with brake dust and road grit. It might work if they enclose the whole system.