UC Berkeley research presented in Korea finds that dynamic fares could strengthen the business case for airport air taxi service
Can Urban Air Mobility (UAM) work? Research presented at Korea Drone and UAM Expo suggests dynamic pricing could make airport air taxis economically viable.
While much of the urban air mobility (UAM) conversation has focused on aircraft certification and infrastructure, researchers at the 6th Korea Drone and UAM Expo turned their attention to a different question: can the business actually make money?
The presentation, delivered by Mark Hansen of the University of California, Berkeley, co-written with Albert Cao, Rishi Srinivasan, and Raja Sengupta, argued that airport transportation may represent one of the strongest early commercial opportunities for electric vertical takeoff and landing (eVTOL) aircraft.
Held in Incheon, South Korea, the annual Korea Drone and UAM Expo brought together government officials, researchers, manufacturers, operators, and technology companies to discuss the future of drones and advanced air mobility. The event has become one of Asia’s leading forums for commercial drone and UAM development, showcasing both emerging technologies and practical approaches to bringing them into everyday use.
Airport Access Offers a Clear Use Case
Rather than examining broad citywide air taxi operations, the Berkeley team focused their research on one specific market: transportation to and from Los Angeles International Airport (LAX).
Their conclusion was straightforward. Airport access presents a compelling business case because air travel eliminates many of the delays created by road congestion while serving travelers who often place a high value on saving time.
The researchers modeled a network of eight regional vertiports located within roughly 30 miles of LAX. Demand was based on travelers who currently choose taxis or rideshare services. Because airport arrivals and departures are well documented, passenger demand can be estimated with a relatively high degree of confidence.
Ground travel times fluctuate dramatically throughout the day as congestion rises and falls. UAM flight times, however, remain comparatively consistent. While passengers still require first mile or last mile ground transportation and time for boarding and transitions, the total trip can still offer substantial time savings during peak traffic periods.
Dynamic Pricing Changes the Economics
Perhaps the most significant finding involved pricing.
The researchers argued that charging every passenger the same per mile rate leaves revenue on the table. Instead, they proposed variable pricing similar to the surge pricing already familiar to rideshare users.
When road congestion is severe, travelers value time savings much more highly. According to the presentation, the greater the time difference between a conventional rideshare trip and a UAM flight, the more customers are willing to pay for the faster option.
That pricing flexibility could even create viable markets where fixed pricing would fail. The researchers cited Anaheim, California as one example. Under a flat pricing model, demand from the Disneyland area would be limited. Under dynamic pricing, however, enough passengers may be willing to pay for significant travel time savings to support profitable operations.
More Than Aircraft
The presentation also emphasized that profitability depends on more than passenger demand.
Fleet size, charging schedules, vertiport investments, flight frequency, route distance, and aircraft utilization all influence operating economics. Capital costs remain substantial, particularly when accounting for both aircraft acquisition and the infrastructure needed to support operations. Any realistic business model must balance these factors while maintaining enough aircraft availability to meet fluctuating demand.
A Practical Path Forward
Urban air mobility is often discussed as a future replacement for urban transportation, but the Berkeley research suggests a more focused strategy may offer the fastest path to commercial success.
Rather than attempting to compete with every automobile trip, operators may find greater success serving airport travelers whose schedules are sensitive to delays and who place a measurable value on saving time.
The researchers ultimately concluded that airport access represents a strong commercial opportunity for UAM, particularly when operators are free to adjust pricing based on demand rather than relying on a fixed fare structure. In that sense, the economics may look less like a scheduled bus service and more like today’s rideshare market, where price and demand move together to maximize fleet utilization and revenue.
Read more:
- Why the FAA’s Largest Reorganization Ever Matters for Drones and Air Taxis
- Why Japan’s AAM Roadmap May Be the Most Realistic in the World
- From Air Taxis to Emergency Transport: FAA Calls for AAM Proposals
Miriam McNabb is the Editor-in-Chief of DRONELIFE and CEO of JobForDrones, a professional drone services marketplace, and a fascinated observer of the emerging drone industry and the regulatory environment for drones. Miriam has penned over 3,000 articles focused on the commercial drone space and is an international speaker and recognized figure in the industry. Miriam has a degree from the University of Chicago and over 20 years of experience in high tech sales and marketing for new technologies.
For drone industry consulting or writing, Email Miriam.
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