Lilium says its five-seater jets can travel up to 186 in one hour. Lilium

Flying cars, now known as electric air taxis, have been around for a long time in our dreams. If you watched sci-fi staples like "The Jetsons" or "Back to the Future," you may have indulged in flights of fancy about winging it to work and waving traffic jams goodbye. But now that major brands like Toyota, Uber, Hyundai, Airbus and Boeing are promising to whisk riders through the skies in flying taxis, the dream is getting closer to reality. The goal is to link urban centers with suburbs while leapfrogging traffic — air taxis could cruise at 180 mph at altitudes of around 1,000 ft to 2,000 ft. But NASA has reported they can go at an altitude up to 5,000 ft. It's a market that should continue to mature during this decade and then boom globally. The autonomous urban aircraft market may be worth $1.5 trillion by 2040, according to a Morgan Stanley Research study. Another urban air mobility (UAM) study, by Frost & Sullivan, sees air taxis beginning in 2022 in Dubai and expanding with a compound annual growth rate of about 46% to more than 430,000 units in operation by 2040. Driving this trend is a confluence of technologies, including autonomous vehicles such as drones and self-driving cars, more efficient batteries and advanced manufacturing techniques. It's not surprising that companies — from venture-backed start-ups and Uber to major auto and aviation companies — are rushing to grab a foothold in this nascent market. The business has the potential to significantly disrupt the landscape of urban mobility, and investors are pouring millions into commercialization efforts.They are attracted to the fact that electric air taxis have the potential to lower operating and maintenance costs dramatically.

Electric air taxis come in several shapes and sizes, and many look quite different from conventional fixed-wing aircraft. Electric motors replace jet engines, and vertical takeoff and landing (VTOL) aircraft, designed to avoid the need for long runways, have rotating wings and, in some cases, rotors in place of propellers. Only a few companies are making vehicles that actually look like cars with wings.

Tie-ups in the sky

In January, Toyota said it is investing $394 million into Silicon Valley-based Joby Aviation, which is developing a piloted all-electric vertical takeoff and landing (eVTOL) air taxi. The move, part of a financing round worth $590 million, will help Joby launch an electric air-taxi service by 2023 and gives the company access to Toyota's prowess in manufacturing, quality and cost control. The start-up is building a prototype that it says should eventually approach the cost of ground transportation and help a billion people save more than an hour in commuting time every day.

Joby Aviation is developing electric passenger planes and an air taxi service.

"Joby has developed advanced technology and integrated it into an amazing aircraft through thoughtful design; this is the key to successful market entry and the commercial success of our products," says Joby spokesperson Mojgan Khalili. "Joby Aviation's aircraft is designed for four passengers plus a pilot. It can travel more than 150 miles on a single charge, is 100 times quieter than conventional aircraft during takeoff and landing, and is near silent in flyover." In another Asian-American partnership, South Korean carmaker Hyundai and Uber showed off a mockup of a large flying taxi at the Consumer Electronics Show in Las Vegas for the Uber Elevate aerial ride-hailing service. The electrically powered PAV or "personal air vehicle," will have the capability of carrying four passengers on trips of up to 60 miles at speeds reaching 180 mph. They will be able to cruise at altitudes up to 2,000 ft. Hyundai said the all-electric craft could be recharged in minutes, but did not elaborate on how. Uber has said it wants to begin testing of vertical takeoff and landing vehicles in 2020 and launch its first official ride three years later, rolling out services in Dallas, Los Angeles and Melbourne. It aims to make flying taxis cheaper than owning passenger cars. Uber Elevate is planning to begin demonstration flights this year. "We believe Hyundai has the potential to build Uber Air vehicles at rates unseen in the current aerospace industry, producing high quality, reliable aircraft at high volumes to drive down passenger costs per trip," Eric Allison, head of Uber Elevate, said in a release. "Combining Hyundai's manufacturing muscle with Uber's technology platform represents a giant leap forward for launching a vibrant air taxi network in the coming years."

Hyundai Motor and Uber have announced a new partnership to develop Uber Air Taxis for a future aerial ride share network and unveiled a new full-scale aircraft concept at CES. Hyundai

Toyota, Joby, Uber and Hyundai are working in a field that's already crowded with contenders. Boeing, another partner in the Uber Elevate program, has already begun flight tests of its prototype air taxi. German start-up Lilium Aviation sent a prototype remote-controlled, jet-powered eVTOL on its maiden flight last year and later completed the first phase of testing. Stuttgart-based Volocopter, backed by Intel, Daimler and Geely, has apparently logged over 1,000 test flights and aims for fully autonomous commercial flights in five to 10 years.

Turbulence before takeoff

"Air taxis are definitely the next phase of mobility," says Joe Praveen Vijayakumar, Frost & Sullivan senior industry analyst. "Urban centers across the globe are struggling to come to terms with the rising vehicle numbers and the resulting congestion, especially during peak traffic hours. When air taxis become widely commercialized, they will definitely ease the traffic burden on city roads. They will usher in a nimble form of intracity travel, transporting people on the shortest possible route between two locations." But growth faces hurdles. Incidents like the death of basketball legend Kobe Bryant in a helicopter crash have highlighted safety concerns of flying taxis. While the first flying taxi services may have human pilots, later replaced by remote-controlled or AI-powered autonomous vehicles, regulators around the world have been trying to get ahead of the commercialization rush by creating standards and virtual sandboxes where developers can experiment. Aside from risks to passengers and people on the ground, air taxis could pose hazards for other aircraft. They could also become a target for hackers. The regulations in development will cover everything from vehicle safety, airworthiness and traffic control to noise pollution, operator certification and software security.

Boeing's first test of its Uber Air air taxi. Source: Boeing Corp.

"Everyone in the industry proceeds as though safety is guaranteed and technology will solve everything, which, as we know, is never the case," says Dominic Perry, an aviation journalist and deputy editor of Flight International. "In the scramble to produce the air vehicles, there are also few companies giving due consideration to the infrastructure required to operate them, or the industrialization and resources required to build them in the first place." Even if safety can be assured, cost is another big barrier. Morgan Stanley analyst Rajeev Lalwani has speculated that the market could begin as "an ultra-niche add-on to existing transportation infrastructure, similar to how helicopters operate today." Personal helicopter travel has been around for a long time but hasn't expanded beyond wealthy passengers, and it's perhaps no surprise that Boeing and Porsche have joined hands to explore vehicles for the "premium urban air mobility market." The question is whether automation can lower costs. Lilium Chief Commercial Officer Remo Gerber told CNBC that flights could take passengers from Manhattan to JFK Airport within six minutes for about $70; much less than Uber's helicopter rides, which cost about $200 to $225 for the same trip.

When air taxis become widely commercialized, they will definitely ease the traffic burden on city roads. They will usher in a nimble form of intracity travel, transporting people on the shortest possible route between two locations. Joe Praveen Vijayakumar senior industry analyst, Frost & Sullivan

"If they are priced correctly, air taxis may be able to democratize travel in cities where there is no public transport alternative or where the congestion and size of the urban area (Sao Paulo is the classic example) are so great," adds Perry. "If, however, they simply become another helicopter service for the rich, then all they will be doing is transforming the mobility of the wealthy, further increasing a divide between rich and poor. Will they alleviate ground congestion? Almost certainly not."

Surviving the shakeout