Passenger drones: Look to the skies

flying-cars

  • Some predict flying taxis could be operational before self-driving cars
  • Regulator will want passenger drones to be as safe as manned aircraft
  • Insurance likely to straddle motor and aviation markets

The airspace above our cities could be the roadway of the future but what will insurance look like in times to come? And what kind of policy would cover flying taxi cabs – motor or aviation?

All eyes in the last few years have been on driverless cars as the transport innovation that will ease congestion and open up personal transport to the millions of people who do not currently drive. But while the UK government has been ploughing money into the development and testing of autonomous vehicles for the road, others have set their sights slightly higher, seeing the airspace above our cities as the roadway of the future.

In June, Chinese company Ehang was given the green light to begin testing its prototype passenger drone, the Ehang 184, in Nevada. The vehicle is capable of carrying a person for 23 minutes, and can fly at altitudes up to 11,500ft (3500m) with a maximum speed of 60mph (100kph). According to a video from the company, the traveller enters their desired destination into a dashboard app and the drone will transport them there without any further input.

Leapfrogging driverless cars
Partly autonomous vehicles are expected to hit the roads soon but the integration of totally self-driving cars into national transport networks is still likely to take at least a decade. Some have, therefore, suggested that passenger drones, with their lower infrastructure requirements, could leapfrog driverless cars and make it to market first. But given the head start that driverless cars have had in terms of investment and government support, is this really a genuine possibility?

Charlotte Halkett, marketing actuary at Insure The Box, believes the idea is not as far-fetched as it sounds. “It does seem like a dream but when you consider the challenges around autonomous [cars] they are significant. The connected car is not just about the technology that goes into the vehicle but about the whole environment. It’s one thing driving down the M62 but it is completely different driving in rural Cornwall. What has to happen to the entire road infrastructure is so significant that it’s a considerable timeframe you’re talking about, especially if you look at average age of vehicles on the road.”

However, according to Ian Kemp, underwriting product director at RSA, the comparison between the infrastructure needs of driverless cars and that of drones is somewhat misleading. “If you imagine a drone going from A to B then you need no extra infrastructure, which is the same for an autonomous vehicle on the ground. But it you have the number of drones needed to try and reduce the congestion on the UK roads, you would need some mechanism of them being connected to each other and to the ground to make sure there were no accidents or other safety considerations.”

Tim Marlow, head of autonomous and connected vehicle research at Ageas, agrees that passenger drones would have greater infrastructure requirements than some of their fans suggest. At a minimum, there would need to be “an element of centralised control” so that leaving and joining an aerial roadway involved “an automated permission to join and permission to leave protocol”. However, it’s not too difficult to envisage how this could work, he says, citing London’s Docklands Light Railway as a transport system where driverless vehicles have successfully operated under centralised control for many years.

However, even if passenger drones are a viable mode of transport, with surveys showing that one in five people are not comfortable with the idea of travelling in an autonomous car, is there really a market for travelling in unmanned vehicles hundreds of feet in the air? “About 15% of the population even now will not travel in aircraft because of a fear of flying, so you already have a reasonable number that probably wouldn’t travel in a drone, were it to be available,” says Marlow.

RSA is a consortium member in the Gateway Project in the Greenwich peninsula, one of four government pilots currently being run to test driverless cars. Underwriting product director Ian Kemp says that while consumer attitudes are an obstacle to both driverless car and passenger drone uptake, the former are likely to be easier to overcome.

“Part of the aim [of the Gateway project] is to broaden the appeal by giving people the opportunity to see, use and touch the autonomous vehicles. But one in five people not being willing to get in an autonomous car means 80% still would. And that figure also ignores the potential to extend the driving experience to people that don’t currently drive: that could be the elderly, the disabled or those who do not currently have a license. That one in five will diminish over time. In terms of drones, I’m guessing the same 20% would be equally averse to using a drone but it might be a larger number.”

Transport revolution
However, Halkett does not view the situation of passenger drones to be markedly different from other innovations that have shaken up transport in the last decade. As a general rule, “familiarity breeds comfort”, she says.

“We’re living in an age of transport revolution. Uber now is very popular but that’s very different from asking people five years previously ‘would you download an app and [ask a stranger to come and pick you up in a car]?’. People would probably have said ‘I don’t like the idea of that, it’ll never work’. But when they see it, it’s very different from the concept of it.”

The current ambivalence from consumers is one struggle for those like Ehang, which want to make passenger drones a reality. However, it is not the only obstacle, with aviation regulators yet to be convinced. Drone use in general is still in its infancy, with heavy restrictions on where unmanned craft can fly – and at what heights.

The frequency of near-misses between recreational drones and passenger jets has increased in the UK. In April, a drone was suspected of hitting a British Airways plane on approach to Heathrow Airport. Those incidents have highlighted the damage that even small drones can do, a fact which is likely to urge caution about throwing larger unmanned aircraft into the mix.

“Before you could possibly get to a stage where drones are carrying passengers, you’d have to go through a period when they are carrying cargo,” says Richard Taylor, a spokesman for the UK’s Civil Aviation Authority. “Those cargo-carrying drones will need to be incorporated into the normal airspace system where they are interacting with other aircraft. Before that can happen, that will require some kind of detect-and-avoid capacity to be developed for these devices.”

If an unmanned aircraft can be recognised by the regulator to be equally as safe as a manned aircraft, then it really doesn't matter what it's got on board. You can put people in it, cattle, whatever you like."

Although national regulators such as the CAA would be responsible for integrating drones into UK airspace, any new flight technology in Europe currently needs to be certified by the European Aviation Safety Agency. The EASA policy is fairly simple, says Ray Mann, managing director of West Wales Airport, home to the National Aeronautical Centre, which tests drone technology.

“What matters is that it is just as safe as a manned aircraft,” he sums up. “Every single aviation authority takes the same stance on that. If an unmanned aircraft can be recognised by the regulator to be equally as safe as a manned aircraft, then it really doesn’t matter what it’s got on board. You can put people in it, cattle, whatever you like.”

Another piece of the jigsaw that still needs to be worked out is what insurance for passenger drones would look like, and whether the vehicles, which seem to straddle the traditional motor and aviation markets, would sit comfortably in either.

When it comes to the Ehang prototype, as far as Kemp is concerned, the cover would have “no motor involvement in it, it will be purely aviation” because it does not drive along the road at any point before take-off or after landing.

Marlow agrees that if the passenger drones of the future follow the Ehang model, they would need “some kind of aviation policy” but he believes they could look quite different, in ways that would radically alter the kind of insurance required. “We might see a hybrid between [autonomous cars and drones]. I can see a situation where you have something capable of operating above the ground but within a space that is designed as a specific roadway for it to operate in.

“If it operates 10 or 20 feet off the ground along an existing roadway is that something more akin to existing motor insurance? And if it’s centrally controlled, do you effectively insure the whole network in which it operates? There would be many facets to it, each of which has their own risk and their own party, which would have liabilities they need to insure.”

It is also unclear if individual passengers would have any liability if the drone were to crash and injure a third party, with a lot depending on the degree of control passengers have and the ownership structure of the vehicle, Marlow says. “It could become like a travel policy. But there’s a similar argument as with driverless cars, in that if you have a degree of ownership, even if that’s on a shared or syndicate basis, then you do have liability for its safe operation. You have responsibility around maintenance, servicing and upkeep.”

Specific challenges
Ian Hughes, CEO at Consumer Intelligence, believes a new market is likely to develop to tackle the specific challenges of these vehicles. “The aviation market could be in a good position to tackle it because big modern jets are effectively drones that carry passengers. They just have people at the front to reboot them if things go wrong. But the aviation market is used to having big lumpy bits of kit [and] the motor market is used to insuring millions of bits of small kit, so there is probably a need for a hybrid that is capable of looking at this kind of stuff,” he comments.

“That’s a key challenge. How do you create an insurance company capable of looking at that? How do you underwrite it and reinsure it and what technology would the insurance industry need to manage the risk?”

Given all the obstacles that lie ahead, are we really more likely to be hailing a flying taxi cab in the next decade than being driven to work by an autonomous car? Or does that prophecy remain in the realm of fantasy?

“[Passenger drones] will happen to some degree but probably not in preference to driverless cars,” says Marlow. “It’s not beyond the bounds of possibility that they could happen before driverless cars but they would only be on a very small scale”.

Kemp adds: “They are potentially a niche product for the wealthy. I would almost see it as one step down from chartering a plane, like an executive hire or limo service. The market for that exists but it’s limited.”

Hughes, however, believes the potential for passenger drones is far larger, and says the scope of our imaginations is the major limit currently. “It’s difficult today to conceptualise it but think of the sheer economics of how much land is taken up with roads. If you could convert those roads back to being properties or greenery, how much would that be worth? When I travel from Bristol to Southampton, the fastest way to travel the distance, which is only 56 miles, is actually to drive 120 miles because the roads are so terrible. But if I could get in a drone and fly there, then I would probably be there in 25 minutes as opposed to two hours.”

The technology itself is “viable and ready to go today”, says Hughes, adding that he believes the major questions around insurance, regulation and infrastructure will be solved in 15 years or less.

“Think about the amount of money there is to be made by fixing this issue. It’s such an incredible opportunity that the amount of money brought to bear on the problem will be absolutely massive.”

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