Urban Air Mobility – Sector Watch 28 June 2019
Urban Air Mobility (UAM) is the movement of air passengers and cargo in an urban space using, mostly electric, Vertical Takeoff and Landing (VTOL) aircraft and Unmanned Aerial Vehicles (UAVs). This sector of mobility currently has 70+ manufacturers, including Boeing, Airbus and Bell Helicopters, as well as other major mobility and e-commerce players, including Uber and Amazon.
Attractiveness
The interest in this sector lies in its ability to reduce travel and delivery times, reduce transport costs (particularly in the transportation of goods), alleviate road congestion and reduce the strain on existing ground transportation networks. Increasing urban populations have and will continue to overwhelm roadways and public transportation systems; new solutions are required and UAM is likely to be one piece to the puzzle. Technology advancement has allowed for the development of electric, efficient and autonomous VTOLs and UAVs that will enable a low-emission transportation system.
Business Models
UAM passenger transportation is still in pilot and testing phases. FAA certification is likely three to five years away, but potential business models are beginning to emerge through pilot projects.
One model will likely be a fixed-route shuttle service, in which a VTOL aircraft would conduct regularly scheduled trips carrying 3-5 persons. Another business model will be premium taxi offering on-demand rides to 1-3 persons, similar to current helicopter service models. Another application will be medevac, offering emergency transport of injured persons to medical centers.
Business models for cargo transportation are clearer, as UAVs are already being used for delivery in various parts of the world and numerous pilot projects are underway. Premium, on-demand delivery of small goods, such as Postmates-style services, is an attractive business model for UAV use, as drones are more efficient, cost-effective and quicker than humans in short-distance deliveries.
Another business model is the use of UAVS for regular delivery of mail and parcels. In this model, drones would replace a human delivery person, either transporting packages directly from a warehouse to the customer or from a roaming delivery van to the customer.
Competitive Landscape
Within the cargo transportation sector of the UAM market, drone manufacturers are competing for partnerships with e-commerce companies. Leaders in the space include Matternet, which has inked partnerships with Daimler and UPS to test drone delivery services and Flirtey, which has partnered with NASA and Johns Hopkins for shore-to-ship deliveries and Domino’s and 7-Eleven for goods deliveries. Drone delivery service providers will rely on air-worthiness certifications to be first movers in the space, as most companies testing the service are not yet certified for commercial deliveries. In April 2019, Wing by Alphabet became the first company to receive FAA approval for commercial drone deliveries in the U.S.
In the passenger transportation sector, competition is based on technology development, partnerships along the value chain and FAA certifications. Incumbent aviation leaders such as Boeing and Airbus are poised to be leaders in UAM due to deep technology expertise, extensive experience with new technology development and certification and numerous investments and partnerships along the value chain.
Joby Aviation, E-Hang and Volocopter are also some of the leaders in the market; as some of the earliest VTOL developers, these companies have been able to develop more mature technology than young start-ups, holistic offerings and key partnerships and relationships with the FAA and other companies along the value chain.
Companies that are deploying redundant, fail-safe systems 
and technologies that can integrate with other companies to scale will likely gain a competitive advantage. Wing, by Alphabet, is a UAV developer and provider of drone delivery services.
Volocopter is a developer of electric vertical takeoff and landing (eVTOL) vehicles and air taxi services using eVTOLs. Joby Aviation is a market-leading eVTOL developer.
More questions about Urban Air Mobility? Join us on 8-9 October in Singapore for Cleantech Forum Asia. There’s a session dedicated to the topic.
