Private Transit?

So recently I've been thinking about the role that the private sector can play in mass transit. I'm a firm supporter of public transportation as a vital part of urban living, but sometimes it leaves holes that are better filled by other organizations. Taxis are an example of on-demand transit that fulfills a need - that of the carless urbanite who is tight on time or flush with cash. Cabs are also useful after a night of drinking if the bus is too slow or indirect for one's tastes. But cabs are expensive, to the point where many would rather drive drunk to avoid paying the fares, or designate a sober driver who has to deal with the headache of parking in a dense urban neighborhood and refraining from drinking.

In Seattle, I often find myself frustrated getting between a pair of neighborhoods that are geographically isolated from one another, with limited public transit and extremely tight parking. Ballard and Capitol Hill are two of the most vibrant neighborhoods in Seattle, both boasting dense housing, amazing restaurants, and hopping nightlife and music scenes. The two neighborhoods lie on opposite sides of Lake Union:

While a cab or car ride might only take 15 minutes (not counting the time it takes to park), a bus ride takes nearly an hour, including transfers. Metro seems little interested in providing direct routing between the two neighborhoods, although matters will significantly improve once light rail serves the corridor between downtown, Capitol Hill and the University District. Even so, the quickest route between the two neighborhoods will still likely be around 40 minutes, and that's if your transfer is perfectly timed. Not so stellar. Might there be an alternative in the next decade, while the city gets its act together to build grade-separated rail from Ballard to downtown?

I thought I'd engage in a little thought experiment, and start to ask some marketing questions.

What if someone ran a van between the two neighborhoods, with stops at the most popular spots? Could private transit fill the gap? Here's what I have in mind:

 A pair of 16-passenger shuttle buses (the used one on the left is selling for $4000) could run a fixed schedule between Ballard and Capitol Hill during the evening hours, with regular departures every half hour on the :00s and :30s until, say, 3am. Fares would be about the cost of a drink -- somewhere between a cab fee and a bus fare -- and barf bags would be included. Music selection would fit the mood. Passengers could pay when they board, or pay in advance online (round trip or one-way) for a $1 discount. Because it's a set route with regular departures, people would know they can depend on getting where they want to go, and they'd quickly get the hang of exactly where they need to be to make it home after a night of carousing.

There's some serious benefits to society here too:
-Fewer cars on the road, which means less greenhouse gas emissions.
-One less reason to drive drunk means safer roads.
-Stronger connection between Seattle's hottest neighborhoods and the friends who live there, and a boon to the restaurants, bars, and music venues (and musicians) in the two neighborhoods.

So what do you all think? Would you use such a service? How far would you be willing to walk for a cheap, quick and easy ride to a hopping nightlife spot? How much would you be willing to pay? Would you be more likely to use this traveling alone or in a group? What kind of partnerships might help make this possible (perhaps a public private partnership with the neighborhood chambers of commerce?) Could this actually be a money-making venture if done right? What kinds of costs would we need to look at? Might it even be a victim of its own popularity?

Let me know what you think!