Urban areas are constantly facing the challenge of road congestion due to the increasing number of vehicles on roads. Traffic jams often lead to the wastage of time and impact economic growth. For example, people in the U.S., on average, spend around 90 hours in traffic jams each year, which increases their transportation spending substantially. Moreover, the incidence of road accidents has rapidly escalated in the developing countries of China, Indonesia, and India. All these reasons have led to the development of aerial vehicles that will become a common sight in the near future.
In recent years, several startups have begun working in the domain of urban air mobility (UAM) to help deal with urban traffic. These startups are receiving hefty investments from major companies such as Toyota Motor Corp. and Hanwha Systems Co. Ltd. For example, in January 2018, Toyota Motor Corp. invested $394 million in Joby Aviation LLC, which is developing electric vertical take-off and landing (eVTOL) aircraft, to foray into the UAM sector. These investments will accelerate the urban air mobility market at a massive CAGR of 33.9% during 2023–2030. The market is expected to stand at $895.0 million in 2023 and grow to $895.0 million in 2023.
According to P&S Intelligence, in 2023, passenger aircraft will be adopted in larger numbers than cargo aircraft, as the demand for passenger flights would surpass that for cargo delivery services. People would travel at lower altitudes on eVTOL aircraft, which will become a common type of aerial vehicle due to the increasing traffic on urban roads. However, the fare for low-altitude passenger flights is expected to be higher than the fare for cargo and last-mile delivery service.
Companies venturing into the urban air mobility market are expecting to make a fortune in the future. Key players, such as The Boeing Company, Volocopter GmbH, Airspace Experience Technologies Inc., Textron Inc., Kitty Hawk Corp., Airbus SE, Lilium GmbH, Uber Technologies Inc., Zipline Inc., and EHang Holdings Ltd., are entering into joint ventures and partnerships to gain maximum success from this futuristic market. For instance, Kitty Hawk Corp., in December 2019, launched the Wisk joint-venture with The Boeing Company, to create Cora, a self-flying eVTOL air taxi, which will have a two-person capacity.
Similarly, in January 2020, Uber Technologies Inc. started a partnership with Hyundai Motor Co. to provide ridesharing services through air taxis. Because of this partnership, Hyundai became the first automobile manufacturer to join the Elevate initiative of Uber. According to the agreement, the automaker will manufacture and deploy aerial vehicles, whereas Uber will offer support service, customer interface, and connection to ground transportation via an aerial network. In the same month, Pierce Aerospace LLC and DroneDek LLC announced a partnership aimed at delivering authenticated packages to government, residential, commercial, and institutional customers via drones.
Hence, to avoid heavy traffic on urban roads, air mobility vehicles will be adopted in large numbers in the coming years.