In today’s Finshots, we talk about flying taxis and all the progress being made in this domain
The Story
Everyone loves a good traffic joke. And if you’re in Mumbai or Bengaluru, then you’re likely hearing a lot of these jokes.
But what if there was a solution to this never-ending problem?
No, not public transport. That would be a practical solution and you know how lawmakers absolutely hate practical solutions. So let’s talk about something more fanciful. Aeroplane taxis!
A couple of days ago Sweden’s Infrastructure and Housing Minister Andreas Carlson flew to India to discuss the future of aviation with the country’s Civil Aviation Minister. And there was one big topic of discussion — electric planes!
In Carlson’s words “…they will be in the market in just five years. You can have electric flights for domestic shorter short-haul flights…They can have a range of 800 kilometres with 25 passengers.”
5 years! That’s the prediction.
And here’s the thing. There’s some progress happening here already. A tech startup incubated at IIT-Madras is already putting together an electric plane that could ferry passengers or cargo over short distances. And they hope to get these flying by 2025.
An ambitious timeline. But … it’s still progress.
And even investors are kind of getting excited. Globally, they’ve pumped in over $7 billion into air taxis in the past few years. Even big brands like Boeing, Airbus, Hyundai, and Toyota have jumped on the bandwagon. And countries and regulators are working on the infrastructure. For instance, France is setting up an ‘air taxi station’ in time for the Olympics next year. And in February, the UAE approved the design for a few stations that they hope to have up and running by 2026.
Okay, so how will they work?
Well, it’s really quite simple. If you want to commute from point A to point B — under 150 km, you could get to one of those air taxi stations, buy a ticket and hop on. It’s like boarding a bus or a train.
And these taxi stations won’t even need runways. These planes are capable of electric vertical take-off and landing or eVTOL (pronounced ee-vee-tol). This means that they can take off and land in extremely compact areas. Maybe even an area slightly bigger than what it takes to park a mid-sized sedan. And when these planes scale with demand, you could have building tops repurposed as air taxi hangars. Or at least that’s the grand plan.
Oh, and considering these planes use clean energy sources, it’s also a minor win for the environment.
But hang on…do we even need air taxis?
Well, it’s all part of this major plan to decongest roads. A report by BCG (the Boston Consulting Group) in 2018 illustrated how road congestion affects peak-hour commutes in various Indian cities. It takes 1.5 times as long to complete a trip when compared to non-peak hours. The avoidable socio-economic costs of all this traffic congestion? ― a whopping ₹1.44 lakh crores!
So why not just adopt air taxis eh?
Well, air taxis won’t come cheap. These flights will be expensive and while prices could trend downward as the industry matures, it’s likely that air taxis will simply be a helicopter service for the rich during the first few years of adoption.
There’s also the cost factor. Companies might need to first invest at least $20 billion over the next decade to get things up and running. This includes developing air taxis and all the supporting infrastructure. Will investors be ready to pump in that money and wait patiently?
We don’t know. And even if they were, this is an extremely ambitious endeavour. It’s not like building an app to connect people with taxi drivers. Regulators will be concerned about safety. The public will be worried about all the commotion and the government will also have to back private institutions to get the whole thing up and running.
And there’s a reliability problem. Small aircraft are accident-prone. And when a company in Los Angeles ran a 3-month pilot for their air taxi, they found that they had to cancel flights 25% of the time due to poor weather. That’s not going to make customers all that happy.
And finally, you also have risks associated with electric vehicles. While EV batteries are becoming safer each day, there’s still a lot of work to be done here. An explosion in the skies would permanently dent the prospects of air taxis across the world. It could be a Hindenburg moment.
So yeah, perhaps air taxis could actually become a thing in the near future and we won’t have to wait until 2062 (the year in which the sci-fi series Jetsons is set in). Will it actually be the panacea for all our traffic problems?
That we don’t know.
Until then…
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Ditto Insights: Why Millennials should buy a term plan
According to a survey, only 17% of Indian millennials (25–35 yrs) have bought term insurance. The actual numbers are likely even lower.
And the more worrying fact is that 55% hadn’t even heard of term insurance!
So why is this happening?
One common misconception is the dependent conundrum. Most millennials we spoke to want to buy a term policy because they want to cover their spouse and kids. And this makes perfect sense. After all, in your absence you want your term policy to pay out a large sum of money to cover your family’s needs for the future. But these very same people don’t think of their parents as dependents even though they support them extensively. I remember the moment it hit me. I routinely send money back home, but I had never considered my parents as my dependents. And when a colleague spoke about his experience, I immediately put two and two together. They were dependent on my income and my absence would most certainly affect them financially. So a term plan was a no-brainer for me.
There’s another reason why millennials should probably consider looking at a term plan — Debt. Most people we spoke to have home loans, education loans and other personal loans with a considerable interest burden. In their absence, this burden would shift to their dependents. It’s not something most people think of, but it happens all the time.
Finally, you actually get a pretty good bargain on term insurance prices when you’re younger. The idea is to pay a nominal sum every year (something that won’t burn your pocket) to protect your dependents in the event of your untimely demise. And this fee is lowest when you’re young.
So if you’re a millennial and you’re reading this, maybe you should reconsider buying a term plan. And don’t forget to talk to us at Ditto while you’re at it. We only have a limited number of slots everyday, so make sure you book your appointment at the earliest:
1. Just head to our website by clicking on the link here
2. Click on “Book a FREE call”
3. Select Term Insurance
4. Choose the date & time as per your convenience and RELAX
