Can Uber Fly?

Uber wants to go vertical, starting with its Copter service

Earlier in 2019, Uber started offering helicopter trips from Manhattan to John F. Kennedy International Airport (JFK) for select passengers.

Last week, the company expanded its premium helicopter service, Uber Copter, in New York to all users, with the promise of eight-minute flights to nearby JFK airport from downtown Manhattan. Previously, only members of Uber’s top-two customer tiers, Platinum and Diamond, could participate. The company intends to roll out Uber Copter in more US cities and eventually offer it to daily commuters who travel to and from neighbouring suburbs.

The launch comes at a time when Uber needs positive headlines to distract from the list of problems it’s facing. Uber has been contending with record losses, multiple rounds of lay-offs, continued scrutiny over passenger safety, potential regulatory threats and a stock price that is hovering near an all-time low.

Uber services already go beyond cars, with the company now also offering scooters and bikes for transport. It’s making efforts to give its users more options for getting from one place to another, and to build its brand. Its helicopter transport is a luxurious, niche service that shows Uber has an eye on the future. The company is even working on autonomous electric flying taxis, and the day could come when that is pretty mundane: under its new Uber Air division, it’s developing a class of flying electric vehicles that can take off and land vertically. Uber is expected to launch its first set of electric air taxis in Dallas, Los Angeles and Melbourne, Australia, in 2023.

Uber isn’t alone in offering a helicopter transport service; one of its largest rivals is Blade. Helicopters have carried passengers from Manhattan to regional airports for decades, but ride-sharing helicopter services such as Blade let customers book seats for as little as $195 on a smartphone app. Blade operates flights to neighbouring airports, as well as routes to the Hamptons, Atlantic City and Nantucket.

Uber’s service is expected to appeal to Wall Street executives, thanks to its convenient helipad access, or to commuters travelling to the airport during peak hours who can afford to pay a premium to avoid sitting in traffic. Uber must now convince this audience to upgrade from a car to a chopper. Its brand recognition should help it win market share in helicopter rides and even expand that market, although the service will be expensive enough to remain a niche that doesn’t contribute meaningfully to Uber’s overall results.

However, Uber hopes the roll-out of its Copter service in New York will pave the way for Uber Air, its taxi service of electric aircraft that can take off and land vertically. Copter is a test run for the company’s goal of creating this “future in mobility”.

This is an exciting vision, but it needs to be seen through realistic eyes. Before such a service could get off the ground in a big way, the vehicles and the systems behind them would have to be safety-certified, there would need to be some form of air traffic control for smaller local vehicles, there would need to be suitable places for take-off and landing, and this would all be needed within the economic constraints of a premium taxi ride. Even in the most optimistic scenarios this is a 10-year vision.

Although Uber has earned a strong reputation as a market disrupter, and therefore has good credentials for developing a disruptive vision like flying taxis, we expect that investors won’t see this as a valid reason for continuing to test their patience. As world markets get the jitters about trade wars, and as the “techlash” bites further, they want jam today, not tomorrow.