But Holden, a former Groupon and Amazon executive, doesn't leave these companies hanging. The paper dives deeply into everything from barriers to market, certification, regulatory hurdles, pilot training and noise issues (since the aircraft will be flying so low).
It's not exactly scientific. Instead, the paper reads as a plea or a pitch to the chief business officers of Silicon Valley and beyond.
Here are some of the top points:
Who's driving it: Pilots will initially fly the aircraft, but like all things that are born in Silicon Valley, eventually it will be automated. A huge barrier to getting people to agree to take Uber Elevate — the name of the service — over taking Uber X or UberPool is convincing them that it's safe. In order to ensure these vehicles are safe, Holden argues, they will eventually have to take the human error aspect out of the equation. So while they'll be training pilots initially, the idea is the "flying taxis" will eventually be semi and then fully automated.
"Over time it's highly likely that VTOLs will become autonomous, though we expect that initial operations will require pilots. Utilizing pilots in the initial period permits a strategy of building up statistical proof for FAA certification while slowly increasing the level of automation."
Autonomous technology in the air isn't exactly new, either. Autopilot technology has been used for decades particularly because there are so few obstacles to navigate around in the air. But as it is for planes, weather will be a bigger factor than it is for cars.
"Compared to ground vehicles, the environment in which VTOL aircraft operate is far more open and uncluttered, except during takeoff and landing when operating in close proximity to the ground, buildings, and people."
How much will it cost: Here are some of the numbers: At a low production rate of 12 units per year, it will cost $1.2 million a unit. For around 500 units a year, it will cost $600,000 and at 5,000 units a year it will cost $200,000 a pop. But aircraft production levels haven't been that high since 1946.
"This post-WWII high production was a result of industry attempting to repurpose to civil markets, with a large number of pilots suddenly having been introduced to the market place. In the years after 1946 there was a sudden reduction in annual production and manufacturing rates have never again risen to 1946 levels."
However, these VTOL aircraft will have a longer lifespan than ground vehicles, which are typically manufactured to travel 250,000 miles.
We assume a design life of 25-27k hours for the VTOL to permit 13 years of service with the 2080 hour/year utilization. This enables the vehicle to provide 400,000 miles of service each year and about 5 million miles of service life before the aircraft is salvaged at a residual value of 30%.
As for the operating costs, Holden assumes it will be $50,000 a year for a piloted VTOL and eventually when they become automated companies will have to pay $60,000 per vehicle to add all the necessary technology.
For consumers, the cost of taking Uber Elevate will go down over time.
"Our analysis shows that in the long-term autonomous case, direct costs per vehicle mile will approach 50 cents per mile (equivalent to 35 cents per ground mile). We can expect that the price 100 for a 45-mile pool VTOL, which would replace a 60-mile automobile trip, could approach as low as $21 for the 15 minute journey."