• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia
Tech

Why flying taxi makers are hitting turbulence

By
Jennifer Alsever
Jennifer Alsever
Down Arrow Button Icon
By
Jennifer Alsever
Jennifer Alsever
Down Arrow Button Icon
April 21, 2020, 8:00 AM ET

Imagine, in a few years, climbing into a small four-seat air taxi to get to the airport. The craft resembles an airplane, but takes off and lands vertically like a helicopter. Its electric motors make for an eerily quiet ride. And as for the cockpit, well, there isn’t one because there’s no pilot.

Work has already begun on this Jetsons-like future. At least 10 large companies including Google, Amazon, Lockheed Martin, Toyota, and Hyundai, as well as a flock of startups, are all racing to build prototypes that would carry either passengers or cargo.

But achieving liftoff has proved difficult, casting a pall over the hype that surrounded the experimental aircraft a few years ago. At least three of the companies trying to produce these mini-aircraft have struggled with technical problems, crashes, and fires.

Even if all goes well, it will be years before autonomous air taxis are ready for public use. And before then, city and federal governments must create regulations for this nascent market and approve flights in urban areas.

In an example of the recent problems, Munich-based Lilium suffered a setback in March when its prototype aircraft caught fire inside the hangar, destroying the vehicle. This occurred just before the COVID-19 pandemic forced most of its 400 employees to work from home.

“For a startup, it’s hard,” says Oliver Walker-Jones, a Lilium spokesman. “You put so much love and dedication and emotion into the prototype. We’ll need to understand the cause of the fire before we start flying again.”

Still, the startup recently received a second round of funding, bringing the total amount it has raised to $340 million. The money is supposed to fund testing of its second aircraft, pay for manufacturing facilities in Germany, and, if all goes as planned, underwrite production by 2025. “It’s not the end of the journey,” says Walker-Jones.

Meanwhile, during the summer, Boeing’s unmanned Aurora prototype project experienced a major setback when the plane crashed. An investigation by the National Transportation Safety Board found that vibrations from the passenger aircraft had caused the motors to shut down.

Additionally, startup Kitty Hawk last year ran into snags as well. Flyer, its one-person vehicle, designed to be so simple anyone could fly it after just an hour of training, suffered fires that involved batteries, electric motors, and wiring.

The Mountain View, Calif., startup is funded by Google cofounder Larry Page and run by the A.I. whizzes that started the self-driving car unit of Google’s parent company. “Those fires happened a long time ago and we have not had any since,” says Kitty Hawk spokeswoman Shernaz Daver. 

Kitty Hawk had been working on other aircraft, called Cora, a two-seat short-haul pilotless taxi. In December, Kitty Hawk spun Cora out into a separate company called Wisk Aero, which will work with investor Boeing to commercialize the pilotless aircraft.

The Cora, which has wings with tiny propellers, has taken more than 1,200 successful unmanned test flights without the technical glitches that the Flyer experienced. Wisk is working with New Zealand’s government to get the craft certified and is laying the groundwork to fly paying customers. “All I can say is, it’s in the near horizon,” says Wisk CEO Gary Gysin, without providing any dates when he expects those flights to start.  

Gysin argues that most crashes happen because of humans, and he believes that an autonomous taxi would make for safer travel. “Everybody recognizes that this is the future,” he says.

For instance, companies are pouring money into solving the problem of the “death zone,” or the airspace below 120 feet that is particularly dangerous for planes. Manufacturers are trying to create safety systems and parachutes as a last resort, but it’s unclear that it would be enough, considering the low altitude involved.

Wisk is preparing for any trouble by equipping Cora with three redundant flight computers, a parachute, and 12 independent vertical lift rotors that each have only one moving part—a fan. There would be enough redundancy that one rotor failure wouldn’t cause a crash. During a test, the company intentionally turned off a fan that’s needed to lift the aircraft, and the vehicle was still able to land safely, says Becky Tanner, Wisk’s marketing chief.

Parimal Kopardekar, director of NASA’s Aeronautics Research Institute, says: “Getting off the ground and making sure safety is assured will be the biggest challenge ahead. But how do you prove that you’re safe through operation and design? And then how do you scale it in airspace and manufacturing?”

At the NASA Ames Research Center in Mountain View, Kopardekar’s team is working to sort those questions out with the Federal Aviation Administration. The new cross-agency Advanced Air Mobility team at NASA is trying to create regulations for safety and air traffic control that would enable hundreds of thousands of delivery drones and air taxis to one day buzz 400 feet in the air amid skyscrapers.

The team is considering how to implement air traffic lights and “air lanes” for both manned and unmanned aircraft, and determining which vehicles get priority and when. It’s also looking at how to certify pilots and assess safety.

Many questions remain unanswered: Where will landing pads be built? Who fixes the planes, and who sells them? Can individuals fly them?

In March, NASA created the Urban Air Mobility Grand Challenge, with 17 companies to conduct test flights across the nation. The goal is to create airspace simulations that can determine how traffic should flow, and to gather technical information for the new aircraft. “This will be a continuing priority for NASA,” says Kopardekar.

Meanwhile, big companies are racing to get a piece of the market. Lockheed Martin, Airbus, Boeing, and Toyota are working on prototypes or partnering with startups. Google and Amazon are developing smaller, autonomous drone prototypes that will carry cargo instead of people and could reduce delivery costs and ease car congestion. Uber, too, is laying the foundation for an air-taxi system and has even signed a deal with Bell Aerospace to test a 6,500-pound aircraft in the Dallas area that could start carrying six paying passengers by 2023.

In terms of startups, Alaka’i Technologies, of Hopkinton, Mass., last year began testing Skai, a hydrogen-based, four-passenger air-taxi prototype; German startup Volocopter launched the 2x, a two-seat multi-rotor electric helicopter, on its first public flight, in Singapore; and in December, Chinese startup EHang raised $46 million in an initial public offering on Nasdaq.

Already this year, Joby, based in Santa Cruz, Calif., nabbed $590 million from investors including Toyota, Intel Capital, and JetBlue’s venture capital arm to continue work on its four-passenger aircraft that it touts as “100 times quieter than a conventional aircraft.”  

The potential payoff for air-taxi owners could be big. For instance, a 20-mile Uber ride in a car to the suburbs could take 48 minutes and cost $2 per mile, for a total bill of $40, according to a 2018 report by Morgan Stanley. A driver could earn $400 for a busy day of 10 such trips, or $208,000 annually before expenses.

If a large drone or autonomous aircraft makes that 20-mile trip at 100 mph and $2.50 per mile, passengers could fly home for $50. Faster speeds mean more trips: 40 of them in eight hours, or $2,000 daily per aircraft. That could yield $1.5 million annually—per aircraft.

Because air taxis and drones could replace chunks of existing short- and long-haul air and car travel, Morgan Stanley projects urban air transport could become a $1 trillion market by 2040. “The upside,” says Adam Jonas, a Morgan Stanley analyst who follows the fledgling sector, “is huge.”

Clarification: This story has been updated to make more clear that Wisk owns the Cora air taxi.

More must-read tech coverage from Fortune:

—How the coronavirus stimulus package would change gig worker benefits
—Zoom meetings keep getting hacked. How to prevent “Zoom bombing”
—Why China’s tech-based fight against the coronavirus may be unpalatable in the U.S.
—Hospitals are running low on the most critical supply of all: oxygen
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: Best earbuds in 2020: Apple AirPods Pro vs. the Sony WF-1000XM3

Catch up with
Data Sheet, Fortune’s daily digest on the business of tech.

About the Author
By Jennifer Alsever
See full bioRight Arrow Button Icon

Latest in Tech

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in Tech

Disney’s new CEO is exploring a ‘super app’ for theme park tickets, movies and more
Big TechMedia
Disney’s new CEO is exploring a ‘super app’ for theme park tickets, movies and more
By Thomas Buckley, Lucas Shaw and BloombergMay 2, 2026
42 minutes ago
Apple raises Mac Mini’s starting price to $799 after AI frenzy drains supply
AIChips
Apple raises Mac Mini’s starting price to $799 after AI frenzy drains supply
By Chris Welch, Mark Gurman and BloombergMay 2, 2026
49 minutes ago
Unionized workers form alliance with rich tech giants on AI data centers, pushing back on local opposition and redrawing political lines
AIData centers
Unionized workers form alliance with rich tech giants on AI data centers, pushing back on local opposition and redrawing political lines
By Marc Levy and The Associated PressMay 2, 2026
1 hour ago
Jensen Huang says some CEOs have a ‘God complex’ when it comes to AI apocalypse warnings, which can create shortages of critical workers
AIchief executive officer (CEO)
Jensen Huang says some CEOs have a ‘God complex’ when it comes to AI apocalypse warnings, which can create shortages of critical workers
By Jason MaMay 2, 2026
6 hours ago
Photo of several people working on a presentation together
AICareers
Big Tech is shelling out up to $1 million for new hires who will never have to write a line of code
By Sydney LakeMay 2, 2026
8 hours ago
dario
CommentaryAnthropic
Anthropic’s most powerful AI model just exposed a crisis in corporate governance. Here’s the framework every CEO needs.
By Jeffrey Sonnenfeld, Stephen Henriques, Dan Kent and Holden LeeMay 2, 2026
11 hours ago

Most Popular

Scott Bessent on financial literacy: 'it drives me crazy' to see young men in blue-collar construction jobs playing the lottery
Personal Finance
Scott Bessent on financial literacy: 'it drives me crazy' to see young men in blue-collar construction jobs playing the lottery
By Fatima Hussein and The Associated PressMay 1, 2026
1 day ago
A Chick-fil-A worker got fired and then showed up behind the register to allegedly refund himself over $80,000 in mac and cheese
Law
A Chick-fil-A worker got fired and then showed up behind the register to allegedly refund himself over $80,000 in mac and cheese
By Catherina GioinoMay 1, 2026
1 day ago
Current price of oil as of May 1, 2026
Personal Finance
Current price of oil as of May 1, 2026
By Joseph HostetlerMay 1, 2026
1 day ago
China dominates the world's lithium supply. The U.S. just found 328 years' worth in its own backyard
North America
China dominates the world's lithium supply. The U.S. just found 328 years' worth in its own backyard
By Jake AngeloApril 30, 2026
2 days ago
Apple cofounder Ronald Wayne—whose stake would be worth up to $400 billion had he not sold it in 1976—says that at 91, he has no regrets
Success
Apple cofounder Ronald Wayne—whose stake would be worth up to $400 billion had he not sold it in 1976—says that at 91, he has no regrets
By Preston ForeApril 27, 2026
5 days ago
Gen Z is rebelling against the economy with ‘disillusionomics,’ tackling near 6-figure debt by turning life into a giant list of income streams
Economy
Gen Z is rebelling against the economy with ‘disillusionomics,’ tackling near 6-figure debt by turning life into a giant list of income streams
By Jacqueline MunisMay 2, 2026
8 hours ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.