Work has already begun on this Jetsons-like future. At least 10 large companies including Google, Amazon, Lockheed Martin, Toyota, and Hyundai, as well as a flock of startups, are all racing to build prototypes that would carry either passengers or cargo.

But achieving liftoff has proved difficult, casting a pall over the hype that surrounded the experimental aircraft a few years ago. At least three of the companies trying to produce these mini-aircraft have struggled with technical problems, crashes, and fires.

Even if all goes well, it will be years before autonomous air taxis are ready for public use. And before then, city and federal governments must create regulations for this nascent market and approve flights in urban areas.

In an example of the recent problems, Munich-based Lilium suffered a setback in March when its prototype aircraft caught fire inside the hangar, destroying the vehicle. This occurred just before the COVID-19 pandemic forced most of its 400 employees to work from home.

“For a startup, it’s hard,” says Oliver Walker-Jones, a Lilium spokesman. “You put so much love and dedication and emotion into the prototype. We’ll need to understand the cause of the fire before we start flying again.”

Still, the startup recently received a second round of funding, bringing the total amount it has raised to $340 million. The money is supposed to fund testing of its second aircraft, pay for manufacturing facilities in Germany, and, if all goes as planned, underwrite production by 2025. “It’s not the end of the journey,” says Walker-Jones.

Meanwhile, during the summer, Boeing’s unmanned Aurora prototype project experienced a major setback when the plane crashed. An investigation by the National Transportation Safety Board found that vibrations from the passenger aircraft had caused the motors to shut down.

Additionally, startup Kitty Hawk last year ran into snags as well. Flyer, its one-person vehicle, designed to be so simple anyone could fly it after just an hour of training, suffered fires that involved batteries, electric motors, and wiring.

The Mountain View, Calif., startup is funded by Google cofounder Larry Page and run by the A.I. whizzes that started the self-driving car unit of Google’s parent company. “Those fires happened a long time ago and we have not had any since,” says Kitty Hawk spokeswoman Shernaz Daver. 

Kitty Hawk had been working on other aircraft, called Cora, a two-seat short-haul pilotless taxi. In December, Kitty Hawk spun Cora out into a separate company called Wisk Aero, which will work with investor Boeing to commercialize the pilotless aircraft.

The Cora, which has wings with tiny propellers, has taken more than 1,200 successful unmanned test flights without the technical glitches that the Flyer experienced. Wisk is working with New Zealand’s government to get the craft certified and is laying the groundwork to fly paying customers. “All I can say is, it’s in the near horizon,” says Wisk CEO Gary Gysin, without providing any dates when he expects those flights to start.  

Gysin argues that most crashes happen because of humans, and he believes that an autonomous taxi would make for safer travel. “Everybody recognizes that this is the future,” he says.

For instance, companies are pouring money into solving the problem of the “death zone,” or the airspace below 120 feet that is particularly dangerous for planes. Manufacturers are trying to create safety systems and parachutes as a last resort, but it’s unclear that it would be enough, considering the low altitude involved.

Wisk is preparing for any trouble by equipping Cora with three redundant flight computers, a parachute, and 12 independent vertical lift rotors that each have only one moving part—a fan. There would be enough redundancy that one rotor failure wouldn’t cause a crash. During a test, the company intentionally turned off a fan that’s needed to lift the aircraft, and the vehicle was still able to land safely, says Becky Tanner, Wisk’s marketing chief.

Parimal Kopardekar, director of NASA’s Aeronautics Research Institute, says: “Getting off the ground and making sure safety is assured will be the biggest challenge ahead. But how do you prove that you’re safe through operation and design? And then how do you scale it in airspace and manufacturing?”

At the NASA Ames Research Center in Mountain View, Kopardekar’s team is working to sort those questions out with the Federal Aviation Administration. The new cross-agency Advanced Air Mobility team at NASA is trying to create regulations for safety and air traffic control that would enable hundreds of thousands of delivery drones and air taxis to one day buzz 400 feet in the air amid skyscrapers.

The team is considering how to implement air traffic lights and “air lanes” for both manned and unmanned aircraft, and determining which vehicles get priority and when. It’s also looking at how to certify pilots and assess safety.

Many questions remain unanswered: Where will landing pads be built? Who fixes the planes, and who sells them? Can individuals fly them?

In March, NASA created the Urban Air Mobility Grand Challenge, with 17 companies to conduct test flights across the nation. The goal is to create airspace simulations that can determine how traffic should flow, and to gather technical information for the new aircraft. “This will be a continuing priority for NASA,” says Kopardekar.

Meanwhile, big companies are racing to get a piece of the market. Lockheed Martin, Airbus, Boeing, and Toyota are working on prototypes or partnering with startups. Google and Amazon are developing smaller, autonomous drone prototypes that will carry cargo instead of people and could reduce delivery costs and ease car congestion. Uber, too, is laying the foundation for an air-taxi system and has even signed a deal with Bell Aerospace to test a 6,500-pound aircraft in the Dallas area that could start carrying six paying passengers by 2023.

In terms of startups, Alaka’i Technologies, of Hopkinton, Mass., last year began testing Skai, a hydrogen-based, four-passenger air-taxi prototype; German startup Volocopter launched the 2x, a two-seat multi-rotor electric helicopter, on its first public flight, in Singapore; and in December, Chinese startup EHang raised $46 million in an initial public offering on Nasdaq.

Already this year, Joby, based in Santa Cruz, Calif., nabbed $590 million from investors including Toyota, Intel Capital, and JetBlue’s venture capital arm to continue work on its four-passenger aircraft that it touts as “100 times quieter than a conventional aircraft.”  

The potential payoff for air-taxi owners could be big. For instance, a 20-mile Uber ride in a car to the suburbs could take 48 minutes and cost $2 per mile, for a total bill of $40, according to a 2018 report by Morgan Stanley. A driver could earn $400 for a busy day of 10 such trips, or $208,000 annually before expenses.

If a large drone or autonomous aircraft makes that 20-mile trip at 100 mph and $2.50 per mile, passengers could fly home for $50. Faster speeds mean more trips: 40 of them in eight hours, or $2,000 daily per aircraft. That could yield $1.5 million annually—per aircraft.

Because air taxis and drones could replace chunks of existing short- and long-haul air and car travel, Morgan Stanley projects urban air transport could become a $1 trillion market by 2040. “The upside,” says Adam Jonas, a Morgan Stanley analyst who follows the fledgling sector, “is huge.”

Clarification: This story has been updated to make more clear that Wisk owns the Cora air taxi.

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