This futuristic flying taxi startup took a giant leap towards making $70 rides a reality within 6 years

Lilium

Lilium, the German flying taxi startup, completed the first maiden flight for its prototype vertical take-off and landing electric jet.
Lilium has raised $100 million, last year applied for regulatory approval in Europe and the US, and hired its first CFO.
Flying taxis sound crazy, but chief commercial officer Remo Gerber says they might make more economic sense than ride-hailing firms like Uber.
Gerber thinks Lilium could offer $70 air taxi rides in Europe by 2025, but first it needs to solve issues around infrastructure and proving its aircraft are safe for humans.
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The next big transportation wave after on-demand taxis, scooters, and shared bikes might be the flying car.

German startup Lilium is among a crop of startups working on flying taxis — electric, on-demand aircraft that transport you around or between cities for the price of a long taxi ride.

If Remo Gerber, chief commercial officer of Lilium, has his way, you could be paying $70 for a space in a five-seater jet-powered electric aircraft to fly between London and Manchester by 2025.

"We’re planning to sell you the tickets for your ride," Gerber told Business Insider. "You download the app, you book it ten minutes in advance if you’re nearby, or perhaps for the next day… it’ll be a very user-friendly experience. Our full intention is to be a full operator, rather than selling the aircraft to private individuals."

Lilium

Elements of the model might sound familiar, even if the idea of a flying taxi still sounds insane. Gerber is a former executive at Gett, Israel’s rival to Uber. He and others in this space are essentially working to recreate the on-demand model for taxis, but with electric aircraft. Lilium and its competitors still face significant technical and regulatory hurdles — more on that later.

How do you make money from expensive, flying taxis?

Uber’s business model is undergoing a brutal test in the public markets. That business model, sceptics say, has been largely driven by Uber undercutting the established taxi market by offering cheap cab rides subsidised by the huge amounts of capital it raised.

And like Uber, Lilium is venture-backed. It has raised from China’s Tencent, Skype founder Niklas Zennstrom’s Atomico, and Obvious Ventures, the venture capital backer set up by Twitter cofounder Ev Williams. The company has raised $101 million to date. Will Lilium replicate Uber’s model to achieve air taxi dominance?

Gerber says no. "Some of the ride-hailing plays ultimately subsidised rides in order to gain dominant positions, but we will [have] a positive revenue markup," he said. "It will not just be a negative type of business model. It will be completely different, but still entirely affordable."

Gerber argues that Lilium, once operational, will work quite differently to Uber. You will be able to order an air taxi via app but, unlike an UberX, that air taxi won’t come to you. You’ll have to congregate with your fellow passengers at a dedicated station. It’s a smaller scale model of how aeroplanes work and, the company claims, safer than more efficient than doing the equivalent journey in a helicopter.

"You don’t think about it as the sharing economy when you get into the plane and go on holiday," Gerber said. "It’ll be very comfortable, but people will still be sharing. And that’s what will make it affordable, compared to the fully individualised experience of riding in a taxi. And also it’ll be fully electric."

If Lilium fills its five-seater aircraft with passengers paying $70 each, it nets $350 for a single ride. Much more than the average cab fare.

Another difference is that Lilium will need to hire trained pilots — pricier than cab drivers — and it plans to manufacture and maintain its own fleet of aircraft. It also has to make sure that aircraft can take off and land vertically, that it can really run on jet power and batteries, reduce noise, and create the infrastructure in cities for these vehicles to take off, land, and charge. That seems like a lot of additional expense.

"Don’t forget that aircraft have a longer lifetime," Gerber said. A jet can remain in service for around 25 years, experts say. "They don’t degrade as quickly, so the aircraft will last much longer." He added that the firm will work on autonomous technology for the long-term, potentially reducing the need for lots of human pilots for its aircraft.

Lilium’s maiden flight was a success

The economics of flying taxis remain academic until Lilium can prove it can fly its aircraft safely with human passengers and a pilot, receives approval from the US and European aviation authorities, and makes headway on the infrastructure required to make electric aircraft work.

The firm filed for regulatory approval on both continents in 2018. Gerber won’t say much on progress except to say "we are in the process."

He and others at Lilium envisage take-off and landing pads being introduced at existing urban transport hubs like railway stations, and thinks it’s better to create an open ecosystem that works for multiple flying taxi companies. It feels like a long way off but, Gerber says, cities are proactively approving Lilium because they see it as an environmentally friendly alternative to building roads or railway lines.

Lilium is celebrating one tangible milestone: it got its first five-seater prototype aircraft off the ground for the first time at its headquarters at a private airport near Munich.

Lilium

The prototype, called the Lilium Jet, comprises a central, oval-shaped body designed to hold five passengers. There are two front wings, and two rear wings, with 12 flaps. These flaps carry a total of 36 electric jet engines, and variously tilt from a vertical to horizontal position depending on whether the craft is taking off or airborne. Off-the-shelf batteries sit in the body, beneath the main cabin.

This maiden flight on May 4 involved a simple vertical take-off, hover, and land, a spokesman told Business Insider. It lasted around one minute, with the aircraft and its systems performing "exactly as expected." Lilium has done further test flights and eventually hopes to show it can travel a distance and speed of 300km (190 miles) in an hour.

This is a little different from rivals like Uber, which plan to offer aircraft to fly shorter distances of around 60 miles on a single charge. Lilium envisages being able to fly people from London to Manchester, something it says is achievable because of its jet engine setup.

Uber

A spokesman told Business Insider: "This prototype is our first full-weight, full-size prototype. It brings together a wide range of sophisticated technology and is much more mature, and complex, than our previous prototypes. It’s in a form that is ready for certification meaning it has all the safety systems, redundancies, and high-specification parts required for eventual passenger flight, except of course a cabin.

"So while our previous prototype proved the concept of transition flight, we’re taking it to a whole new level here, with a much more mature product."

It’s an impressive achievement, given Lilium raised a fraction of the funding of competitors such as Uber. Boeing, one of the partners building electric aircraft for Uber, likewise achieved its first successful test flight in January.

Progression against that kind of competition is expensive and it is almost certain that Lilium will need to raise new funds. The firm hired its first CFO, Christopher Delbrück, in November.

Gerber won’t share any news on a future raise, but said: "Of course we will always look at making sure the firm is sufficiently capitalised. And we’re recognised by the investor community in terms of unique technology the company is producing. Morgan Stanley put the 2040 market size at $1.5 trillion. People recognise the potential, it’s almost like the first car."

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Source: Business Insider – sghosh@businessinsider.com (Shona Ghosh)