Disruptive Technologies

Let's Get Our Skies Ready for Flying Cars

The future we've fantasized about really is coming, and soon.


Flying car
Casfotoarda / Dreamstime.com

Peter Thiel summed up a wide-felt disappointment with the technological status quo when he quipped: "We wanted flying cars, instead we got 140 characters." The famed investor should buck up, because he may soon be able to tweet (or not) from his taxi in the skies. Believe it or not: the technology is here. The real task is to set up the skyways across which they'll zip.

Technologists are fond of overprojecting roll-out dates. But in the case of flying cars, or "vertical take-off and landing" (VTOL) aircraft as they're known in the biz, it is no exaggeration to say they are right around the corner.

In some cases, it's actually an understatement, as Brent Skorup pointed out in the Wall Street Journal. Helicopters, a kind of proto-flying car, already whisk passengers safely above rush hour traffic in cities like São Paulo and Mexico City. Voom is the "Uber for helicopters," and its roll out is a good illustration of the buzzing airspace to come. The app-based business matches time-strapped commuters with helicopter pilots for hire. They meet at the closest helipad, and then whisk away to their destination in a fraction of the time it would take in bumper-to-bumper traffic.

Mass helicopter transit not cutting-edge enough for you? Well, real-deal flying cars are operational, too.

Chinese aviation company Ehang has been testing air taxi flights with passengers since February. At least 40 brave souls have lived to tell the tale of their trip in a flying car, and the company has big plans for improvements. They want to eventually operate an air taxi service that is not seen as an extreme thrill ride, but a safe and useful transit option for today's commuters.

Entrepreneurs are working to bring flying cars to the States. Uber is eyeing our skies, betting big on the future of air taxis. Its "Uber Elevate" venture hopes to roll out flights over Dallas and Los Angeles in two years. Boeing wants to top that, aiming to test pilot air taxis by 2019.

NASA thinks the air taxi industry could be big business. A slide deck of a NASA-commissioned study suggests that the flying car market could rake in around $500 billion in the best-case future scenario. In this projection, Americans would take 11 million air taxi trips each day. If flying cars were set free today, our current infrastructure of 4,000 crafts could support some 80,000 daily passengers to the tune of $2.5 billion in annual market value.

Here's where things get dicey. The technological hurdles are surprisingly straightforward. Companies are already working on solutions to concerns about noise (they're a lot quieter than their predecessors) and safety. But the policy environment is something that no entrepreneur can control.

To realize those many millions of daily air taxi trips, we need to safely integrate air taxis services into our airspace. Skorup took a deep dive on this question in a recent Mercatus Center report called "Auctioning Airspace." If we don't get our policies right, we could miss the boat (or aircraft in this case) on the promise of mass air commuting.

It's not that flying cars would interfere with traditional air flight. Commercial flights operate at a much higher elevation than air taxis will. Planes cruise at around 35,000 feet in the air, while flying cars nestle at around 1,000 feet or so. Of course, we wouldn't want any air taxis to be flying over airport runways, but neither would the companies that operate them. So that's an uncontroversial line to draw.

The biggest question is how to coordinate the many next-generation aviation technologies that will soon zip around the troposphere. This means other air taxis, helicopters, commercial drones, and the like.

Right now, there's not a lot of activity in Class G airspace, which is a low-lying area that is relatively uncontrolled. It's mostly a few helicopters for tourists, traffic reports, and hospitals, in addition to hobbyist aviation. When flying cars become a reality, certain Class G areas will become congested, which means we'll need more coordination.

We need our skies to be safe, so we need to make sure crafts don't crash and injure passengers or people below. But we also need to make sure we are making best use of our airspace, so we can extract the full benefits of these technologies.

Some people think that the government must plan these routes. Skorup describes this approach: "A central administrator, which can be public or private, assigns access to the resource, often in response to real-time demands."

The administrative body, armed with radar and communication systems, would decide who accesses what routes at what time. This wouldn't be a problem with unpopular routes or times. But disputes could arise over attractive skyways.

Let's say an air taxi service wants to provide hourly flights between a residential and commercial district. There's an obvious public use case there. But a drone courier service wants to take the same path to deliver online orders. The crafts would constantly intersect, meaning that the central administrator would have to make a judgment over whose routes to prioritize. In the absence of prices, this choice can easily go awry.

Maybe the central coordinator gets captured by a particular firm or industry and prioritizes those flights over more socially-valuable ones. Foul play isn't even necessary. Regulators could easily succumb to policy lock-in, where the practices of early entrants become the default through mere tradition. Or they could earnestly try to make the right call, only to be flummoxed by a lack of information about social demand.

This arrangement could cause underutilization of airspace, which means flying cars in the U.S. could be more limited than offerings in places like China.

Skorup has a suggestion: Let's bring prices to the skies.

Rather than hoping that a central coordinator can guess which routes are most valuable, they can parcel routes into long-term licenses for exclusive use and ownership. More attractive routes, perhaps between major residential and commercial centers, would command higher prices than niche ones, like agricultural or research ventures.

Licenses could be auctioned off so firms who most value the route can access it. If their service isn't as popular as they thought it would be, they can sell or rent it to someone else who can try their hand at profitability.

This gets around the safety problem, since only license-holders or renters would use particular routes. It also overcomes the coordination issue, because prices would guide usage instead of best guesses.

And it could encourage better stewardship of the skyways. When firms are certain of their property rights, they are more likely to invest in maintenance and improvements. Long-term skyway licenses avoid the tragedy of the commons phenomenon where public resources are gradually degraded.

It's hard to think of a cooler policy issue to get behind than flying cars. The cause should be therefore extremely attractive to policymakers looking to boost innovation. Bodies like the Federal Aviation Administration should get cracking on setting up the skyways. To best harness this new technology, we need to let prices, and not politics, guide our skies.