Infrastructure Requirements for Urban Air Mobility: A Financial Evaluation

Andrew Wilhelm Infrastructure Requirements for UAM 15 August 2021
ENGM 7899 Vanderbilt University Page 1 of 57
Infrastructure Requirements for Urban Air Mobility: A Financial Evaluation
Written by:
Andrew James Wilhelm
Vanderbilt University
2301 Vanderbilt Place
Nashville, TN 37235
andrew.wilhelm@vanderbilt.edu
Instructed by:
Professor Lori Ferranti

ABSTRACT
The purpose of this research is to determine the financial feasibility of an urban air
mobility (UAM) system. The evaluation will consider the infrastructure requirements and
how they relate to those of existing urban mass transit services. Forces driving this
innovation involve the long commute times within metropolitan areas. To rectify the
problem, public mass transportation is commonly implemented in these localities. Cost for
this solution is economically justified by improvements to travel time, operating,
environmental, noise, and accident factors as compared to individual automobiles. A
financial model for urban mass transportation is built around these characteristics and is
the basis for UAM. To be competitive with the incumbent technology, new designs must
meet four benchmark requirements. These entail an air vehicle that costs less than $10
million, travel that is three times faster than ground-based services, seating for 55 adults,
and the capability of continuous operation. Should these criteria be met, the proposed
solution will have an economic value roughly equal to that of those currently in place. The
implementation of UAM can be conducted by either a clean slate or incremental approach.
A real options analysis indicates that the project NPV will be similar between the two, but
the latter carries less financial risk. Maintaining both systems until UAM is made
sustainable attributes to this reduction. Other risks considered involve regulatory,
operating, and performance concerns. The largest of which is the lack of information on
future UAM air vehicle maintenance. During the financial modeling, it is assumed that the
proposed operating cost is equivalent to the existing service, which is not necessarily the
case. Given proper risk mitigation, the incremental implementation plan details how UAM
will satisfy regulatory requirements and transition into operation. Governmental authorities
are expected to take between six and eight years validating the system. In all, the proposed
UAM solution will take ten years to implement and have an economic value of $48.2
million.
Keywords
Urban air mobility, mass transit, transportation infrastructure, financial engineering

CONTENTS
1 INTRODUCTION....................................................................................................... 7
1.1 Project Expectations............................................................................................. 9
1.2 Scope.................................................................................................................. 10
1.2.1 Demand rate.................................................................................................... 10
1.2.2 Current state problems and business needs .................................................... 11
1.2.3 Benefits to customers...................................................................................... 11
1.3 Boundaries and Limitations ............................................................................... 12
1.4 Timeframe.......................................................................................................... 13
1.5 Innovation Success Factors................................................................................ 13
2 USE CASE ANALYSIS............................................................................................ 14
2.1 Air Metro............................................................................................................ 14
2.2 Air Taxi .............................................................................................................. 15
2.3 Alternative Flow Analysis.................................................................................. 15
3 STAKEHOLDER IDENTIFICATION ..................................................................... 17
3.1 SIPOC Analysis.................................................................................................. 17
3.2 Primary User Identification................................................................................ 18
3.3 Other Stakeholders ............................................................................................. 19
3.4 Stakeholder Classification.................................................................................. 20
3.5 Change Management Plan.................................................................................. 20
4 EXISTING SYSTEM ARCHITECTURE................................................................. 22
4.1 Functional Architecture...................................................................................... 22
4.1.1 Nonfunctional requirements ........................................................................... 23
4.2 Physical Architecture ......................................................................................... 23
4.3 Operational Architecture.................................................................................... 24
5 EXISTING SYSTEM SOLUTION ANALYSIS ...................................................... 26
5.1 Roadway Construction....................................................................................... 26
5.2 Railway Construction......................................................................................... 27
5.3 Urban Mass Transit System ............................................................................... 27
6 EXISTING SYSTEM PERFORMANCE ................................................................. 28
6.1 Current System Operational Profile................................................................... 28
6.1.1 Travel costs..................................................................................................... 28
6.1.2 Operating costs ............................................................................................... 29

6.1.3 Environmental costs ....................................................................................... 29
6.1.4 Noise costs...................................................................................................... 29
6.1.5 Accident costs................................................................................................. 30
6.2 Current Performance .......................................................................................... 30
6.3 Root Cause Analysis .......................................................................................... 31
6.4 Implications for System Improvement............................................................... 32
7 EXISTING SYSTEM BENCHMARK ..................................................................... 33
7.1 Benchmarking Time........................................................................................... 33
7.1.1 Value of time .................................................................................................. 33
7.1.2 Urban public transit time value ...................................................................... 34
7.2 Sensitivity Analysis............................................................................................ 35
7.3 Adjusting Model for Existing Air Vehicles ....................................................... 36
8 PROPOSED SYSTEM REQUIREMENTS .............................................................. 38
8.1 Benchmark Requirements .................................................................................. 38
8.1.1 Secondary Requirements ................................................................................ 39
8.2 Technical Performance Metrics ......................................................................... 39
9 PROPOSED SYSTEM ARCHITECTURE............................................................... 40
9.1 Changes to Existing System Architecture.......................................................... 40
9.1.1 Functional architecture ................................................................................... 40
9.1.2 Physical architecture....................................................................................... 41
9.1.3 Operational architecture ................................................................................. 42
9.2 System Prototype................................................................................................ 44
10 RISK ASSESSMENT AND SYSTEM VALIDATION........................................ 45
10.1 Risk Assessment............................................................................................. 45
10.1.1 Regulatory risk ............................................................................................... 46
10.1.2 Operating risk ................................................................................................. 46
10.1.3 Performance risk............................................................................................. 46
10.2 System Validation........................................................................................... 47
11 BUSINESS CASE ................................................................................................. 48
11.1 Financial Modeling......................................................................................... 48
11.1.1 Clean slate approach....................................................................................... 49
11.1.2 Incremental approach ..................................................................................... 49
11.2 Real Options Analysis .................................................................................... 50
12 IMPLEMENTATION PLAN ................................................................................ 52

12.1 Proposed Timeline.......................................................................................... 52
12.1.1 Vehicle management and operations.............................................................. 53
12.1.2 Air traffic and fleet operations........................................................................ 53
12.1.3 Airspace system design .................................................................................. 53
12.1.4 Vehicle............................................................................................................ 54
12.2 Summarized Implementation Plan.................................................................. 54
13 CONCLUSIONS.................................................................................................... 55
13.1 Suggestions for Future Research .................................................................... 55
REFERENCES ................................................................................................................. 56

LIST OF FIGURES
Figure 1: Commute Methods in the United States.............................................................. 7
Figure 2: Methods of Public Transportation....................................................................... 8
Figure 3: VTOL System Patented by Bell Helicopter ........................................................ 9
Figure 4: Demand Rate for UAM ..................................................................................... 10
Figure 5: Current Concerns for UAM............................................................................... 11
Figure 6: Current Benefits for UAM ................................................................................ 11
Figure 7: Force Field Analysis.......................................................................................... 13
Figure 8: Air Metro Market Profitability.......................................................................... 16
Figure 9: SIPOC Diagram of UAM for Mass Transit....................................................... 17
Figure 10: UAM RACI Matrix ......................................................................................... 20
Figure 11: Change Management Cycle............................................................................. 21
Figure 12 Functional Architecture of Mass Transit.......................................................... 22
Figure 13: Physical Architecture of Mass Transit ............................................................ 24
Figure 14: Operational Architecture of Mass Transit....................................................... 25
Figure 15: Cost Improvements for Urban Public Transit ................................................. 30
Figure 16: Cause and Effect Diagram for Traffic Congestion.......................................... 31
Figure 17: Value of Time Spent Traveling....................................................................... 34
Figure 18: Financial Analysis of Urban Mass Transit Investment ................................... 35
Figure 19: Analysis Utilizing Boeing Chinooks as Transit Vehicle................................. 37
Figure 20: Functional Architecture Changes for the Proposed System............................ 41
Figure 21: Physical Architecture Changes for the Proposed System ............................... 42
Figure 22: Operational Architecture Changes for the Proposed System .......................... 43
Figure 23: Clean Slate Approach Financial Model........................................................... 49
Figure 24: Incremental Approach Financial Model.......................................................... 50
Figure 25: Proposed Timeline to UAM Implementation.................................................. 52
LIST OF TABLES
Table 1: Cost for Various Transportation Vehicles .......................................................... 12
Table 2: Air Metro Use Case Details................................................................................ 14
Table 3: Air Taxi Use Case Details .................................................................................. 15
Table 4: Primary User Identification for UAM ................................................................ 18
Table 5: Other Stakeholders of UAM............................................................................... 19
Table 6: Change Management Cycle Definitions............................................................. 21
Table 7: NPV Sensitivity Analysis ................................................................................... 36
Table 8: Summary of Project Risks .................................................................................. 45
Table 9: Real Options Analysis ........................................................................................ 51

1 INTRODUCTION
Conceptualized in the 19th
century, the idea of urbanization led to the construction
of large human settlements. These locations have become commonplace recently, but were
not always considered a valued living arrangement. Before this time period, urban locations
were plagued with poor sanitary conditions, which frequently lead to communicable
disease outbreaks. However, technological advances, brought about by the industrial
revolution, caused a massive cultural shift towards cities. The invention of steel amplified
this drive and created the silhouette skylines commonly associated with any such location.
More importantly, steel provided the material necessary to develop infrastructure capable
of sustaining large communities, which had been lacking pre-industrial revolution. Along
with steel, a second driver of urbanization was machine-powered transportation. Up until
that point, transportation had either been human or animal-powered. Introduction of the
internal combustion engine led to diesel locomotives, automobiles, and eventually, aircraft.
All of these designs allowed for shipments of goods, and passengers, quicker and over
longer distances, which aided in expanding the scope of metropolitan areas. A critical
design aspect, the size of a city is significantly influenced by how effectively transportation
can occur within its confines. Inefficient methods are expensive to both city governments
and individual citizens. As such, effort has been placed on creating the optimal
infrastructure needed to support this travel. An ideal system is built around factors such as
time spent in transit, maintenance costs, and environmental impacts [1]. Considering these
metrics, several methods have been implemented to improve intercity travel. When looking
at favorable modes of transportation, three main types are utilized in urban areas. These
include human power commutes, biking and walking, public transit, and private vehicles
[2]. The smallest percentage of commutes are undertaken by human power, while private
automobiles are usually the largest. This relationship is broken down, for a group of United
States cities, in Figure 1.
Figure 1: Commute Methods in the United States [2]
0
20
40
60
80
100
New
York
Washington
DC
Boston
San
Francisco
Chicago
Seattle
Pittsburgh
Percent
(%)
Bike Walk Public Transit Drive

While cars are favored due to ease of use, they place the heaviest demand on
infrastructure requirements. Street and road spaces are highly valued in urban areas,
especially during peak commute hours [3]. Excessive use of private automobiles is an
extremely inefficient use of this infrastructure. These occupy the greatest amount of road
space per passenger, leading to higher levels of congestion. To best accommodate this
congestion, methods of public transit have been created. This service has evolved due to
the rising population of large cities. As growth continues, it is not viable to have large
amounts of private vehicles occupying roadways. With this in mind, metropolitan areas
have implemented many different modes of public transit, which aid in facilitating this
transition.
Figure 2: Methods of Public Transportation [4]
The most popular form is a scheduled bus service, followed closely by paratransit,
or unscheduled bus services. The concept is the same in these methodologies, as the service
allows for more passengers per unit volume than private cars. This is also true for vanpools.
An innovative solution to traffic congestion is the introduction of rail transportation
systems. These come in a variety of forms, ranging from light rail trolley cars to heavy rail
locomotives. Implementing this service in urban areas does reduce street traffic but creates
another piece of infrastructure to build and maintain. Buses and paratransit rely on existing
roads but rail systems require different tracks. While rails mitigate road use, they still need
some type of ground-based equipment to operate. To overcome land restrictions associated
with ground transportation, the idea of UAM has grown into an emerging industry.
Advances in aeronautical sciences have presented designs capable of operating within
urban and suburban areas. Existing aircraft require complex airport terminals to initiate and
concluded flights. The runway necessary for commercial aircraft is generally between one
or two miles long. This limits airport development to the outskirts of cities, prohibiting
uses as a method of commute. However, the development of vertical takeoff and landing
(VOTL) systems removes this restriction and allows for use of aircraft in more confined
spaces. Essentially a rebranding of helicopter designs, VTOL aircraft are not new concepts.
The key difference is the reduction in complexity, leading to lower operating costs.
Furthermore, progress in electric VTOL (eVTOL) could increase efficiency, making this
form of transportation even more attractive. While still early in development, VTOL
aircraft present a solution for land restrictions associated with urban ground mobility.
35%
27%
19%
9%
7%
4%
Bus (35%)
Paratransit (27%)
Rail (19%)
Vanpool (9%)
Other (7%)
Car/Taxi (4%)

Figure 3: VTOL System Patented by Bell Helicopter [5]
The above figure shows an example system currently patented by Bell Helicopter. In
this representation, two different vehicles work in conjunction to achieve flight. The first
resembles an automobile that attaches to the second helicopter structure. Upon arrival, the
car would detach and finish the trip on roadways. This allows for flexibility in operational
capabilities.
1.1 Project Expectations
The goal of this project is to provide metropolitan area leadership with an alternative
to ground-based public transportation. Research will compare UAM to existing forms of
transit and identify the infrastructure necessary to support these systems. This will include
an analysis of costs and benefits, along with implementation strategies. These objectives
are summarized in the next list.
•Understand the total economic cost of urban infrastructure development and how
UAM can reduce these costs
•Understand the total economic benefit of public transportation and how it applies to
UAM
•Understand how existing transit infrastructure can be modified to accommodate UAM
•Establish a UAM process flow for efficient passenger transportation
•Establish a baseline for UAM air vehicle management systems using existing aviation
procedures

Considering these aspects, city managers will have the information necessary to
evaluate the UAM platform. While this does not include all topics necessary for
implementation, it establishes feasibility for current transit systems. A detailed financial
model of existing urban mass transportation services, and the critical components, is useful
when approximating that of UAM. This model will serve as the basis for the proposed
changes, and provide the economic justifications for the related modifications.
1.2 Scope
Following an understanding of the overall project goals, the discussion transitions to
scope. UAM is a vast emerging industry that influences several market segments. This
research will only focus on the infrastructure requirements needed for technology adoption
and the best methods of implementation. With such a broad scope, a survey was conducted
by the Massachusetts Institute of Technology to better identify essential project
components. This polled a total of 552 respondents with a 95% confidence level [6].
Emphasis was placed on-demand rate, current problems, and potential benefits of UAM.
Should a strong market demand be identified, current problems can be resolved and
potential benefits can be exploited. The results of these surveys define critical factors to
UAM growth and establish a narrower scope.
1.2.1 Demand rate
An essential variable when defining project scope is demand for the innovation.
Consumer perception is a driving force for technology adoption and should be weighted
heavily before undertaking costly development. A questionnaire constructed with this in
mind asked individuals to rank their likelihood of using UAM if it is available. Answers
are grouped into five categories ranging from highest to lowest demand and responses were
limited to one selection.
Figure 4: Demand Rate for UAM [6]
The survey results show almost 50% of respondents indicating at least probable use
of UAM aircraft [6]. Opposing this, slightly more than 20% did not show interest in the
technology. Rounded out with a 30% neutral vote, this survey displays a large majority
advocating for UAM development. This is indicative of favorable market conditions,
promoting the need for new research. Given this level of support, the funds needed for
development will be more accessible and pose less risk to potential stakeholders.
20%
29% 30%
14%
8%
0%
10%
20%
30%
40%
Definitely Probably Neutral Probably Not Definitely Not
Percent
of
Respondents
Demand for UAM

1.2.2 Current state problems and business needs
Once a strong market for UAM is established, the current problems and needs are
addressed. These are barriers to the design and must be rectified, or mitigated, before
acceptance by industry. For identification, this survey has four subjects including comfort,
price, safety, and noise [6]. Each participant was asked to select all that are considered
relevant concerns.
Figure 5: Current Concerns for UAM [6]
As shown, price and safety are leading issues hindering UAM applications. With
more than 60% of panelists displaying concern for these topics, it is evident solutions are
necessary [6]. There is less importance for the comfort and noise aspects of UAM, but these
characteristics should not be overlooked. Almost 10% of responses identified no
drawbacks to this technology, an encouraging sign.
1.2.3 Benefits to customers
The last topic considered when defining project scope is the benefits to customers.
Without an advantage for the end-user, there is no reason to pursue expensive development.
These act in opposition to the previously defined drawbacks and are emphasized in the
business case. To highlight invention strengths, respondents were asked to consider travel
time, emissions, amount of crashes, cost, and ease of access in their assessment [6].
Figure 6: Current Benefits for UAM [6]
20%
69% 66%
13%
9%
3%
0%
20%
40%
60%
80%
100%
Comfort Price Safety Noise None Other
Percent
of
Respondents
UAM Concerns
78%
22% 25% 23%
43%
7%
0%
20%
40%
60%
80%
100%
Shorter
travel time
Lower
emissions
Fewer
crashes
Lower
costs
Easier
access
None
Percent
of
Respondents
Benefits of UAM

Results indicate the large importance of shorter travel times. The defining
characteristic of UAM, shorter commutes, are desired by nearly 80% of the population [6].
Along with this, additional methods of transit will allow easier access to metropolitan areas.
With congested roadways, certain locations are not able to consistently travel to inner-city
destinations. Lower emissions, fewer crashes, and lower costs were all ranked around 25%,
adding to the desire for UAM advancement.
1.3 Boundaries and Limitations
The boundaries to research scope involve the aforementioned methods of public
transit and current vehicles. Considering the prior, these processes provide the baseline for
new UAM innovations. Making improvements to existing ground-based systems is
considered outside the project scope. The associated infrastructure is viewed as ideal for
the respective commute methods and is only to be adapted for UAM applications. It is the
subject of this research to find modeling for UAM by reviewing the public transportation
market segment. Although unique nuances will be required, in totality configurations will
be very similar. In conjunction with mass transit solutions, vehicles already available
provide the upper and lower bounds for UAM aircraft. On the high end, an uncommon
means of travel is by helicopter. One of the more expensive designs, helicopters are the
closest representation of future UAM vehicles. On the bottom, average cars and city buses
are the least expensive to build and operate. Somewhere in the middle, rail cars round out
included means for the commute.
Table 1: Cost for Various Transportation Vehicles
Unit Price
Passengers
per Trip
Unit Price per
Passenger
Boeing
Chinook
$38,500,000 55 $700,000
Bell 525
Relentless
$15,000,000 16 $937,500
Sikorsky S-
333
$1,500,000 3 $500,000
Hitachi 7000
series metro
$2,000,000 175 $11,429
City bus $550,000 50 $11,000
Average car $37,000 3 $12,333
As indicated, there is a wide range in cost attributed to vehicles. The aircraft listed
are several factors more expensive than their land-based equivalents, posing a concern for
UAM. This research assumes that new UAM aircraft will be priced in this range. It is very
unlikely this expense will be less than road vehicles. Also, anything above that of
helicopters will be prohibitive. Furthermore, no cost analysis will be performed on the
vehicle design itself. It is assumed that cheaper developments will lead to a higher chance
of technology adoption.

1.4 Timeframe
The next step in assessing the adoption of a UAM device is the timing of potential
market entry. Relevant timeframes have been constructed by NASA and the Georgia
Institute of Technology, defining the sector with four main categories. These include
vehicle management and operations, airspace design, vehicle design and air traffic, and
fleet operations. As highlighted in this assessment, infrastructure creation will likely occur
between the years 2022 and 2027 [7]. This is one of the earlier aspects to progress, leading
regulatory topics. The ideal time to enter the market is somewhere in this window.
Subsequent actions, such as airspace integration and fleet management, will further fortify
designs. Delaying introduction risks becoming a late adopter of the invention. A more
precise timeline will be detailed in the proposed implementation plan for UAM.
1.5 Innovation Success Factors
After industry timing is understood, effort shifts to defining innovation success
factors for UAM infrastructure development. A useful tool is force field analysis. This
identifies forces for and against the proposed changes, weighting positive and negative
aspects [8]. Considering both sides of the argument, the evaluation provides reasons behind
project execution.
Figure 7: Force Field Analysis [8]
The forces driving UAM adoption are led by the cost of road maintenance and
roadway congestion. These are balanced by the cost of constructing UAM aircraft and
airway congestion. While it is slightly more expensive to build required aircraft rather than
maintain streets, related congestion is significantly less for UAM. Along with this, aircraft
accidents are far less frequent and costly. The operating costs and pollution aspects are
viewed as nearly identical. Aircraft engines tend to be more efficient than internal
combustion motors, but only slightly. The introduction of electric propulsion systems, for
both ground and air solutions, could render pollution attributed to transportation obsolete.
In all, the benefits of invention adoption outweigh the barriers. The reduction in roadway
congestion is a driver of UAM innovations. Although the cost of aircraft manufacture is a
hindrance, advances in technology could reduce the expense.

2 USE CASE ANALYSIS
Evaluating existing methods of urban transportation gives insight into potential use
cases for UAM. Types of commutes are broken down into two categories, scheduled and
unscheduled. The prior consists of buses and rail systems, while individual vehicles,
vanpools and paratransit make up on-demand services. Applying this to UAM creates use
cases with similar characteristics. An air-based public transportation system parallels
current scheduled modes of public transit [7]. Conversely, air taxis are more ubiquitous
and allow for point-to-point transportation. Once these unique possibilities are defined,
alternative flow analysis is used for comparison. This identifies fundamental differences
between the two cases, and how this variance affects the potential for technology adoption
and profitability.
2.1 Air Metro
The first case considered is a UAM public transit system resembling rail
transportation. Performance characteristics of the aircraft utilized include payload,
distance, and an approximate number of passengers. A defining aspect of this case is the
operation along predetermined routes [7]. This reduces the number of terminals needed,
decreasing infrastructure demands. With this implementation of UAM, stations can load
several air vehicles at once and serve as refueling points.
Table 2: Air Metro Use Case Details [7]
Vehicle VTOL aircraft averaging three passengers per flight
Payload ~ 1,000 pounds
Distance ~ 10-70 miles per trip
Scheduling and
routes
Routes are predetermined and planned well before flight time
Infrastructure
• 100-300 terminals per serviceable area
• Located in high-traffic areas
• Capable of maintaining 3-6 aircraft at once
• Charging and service stations
Technology
• Advances in battery technology
• Electric propulsion
• GPS technology
Potential
regulatory
requirements
• Air worthiness standards
• Weight and altitude restrictions
• Operator certification
• Environmental restrictions
Competing
technology
• Rail transportation
• Scheduled bus service

2.2 Air Taxi
Along with the possibility of an air metro system, the details of air taxis are described.
In this representation, the air vehicles are identical to those previously detailed and have
similar requirements. Technological advances in batteries, electric propulsion, and GPS
navigation are needed for case implementation [7]. Furthermore, regulatory requirements
involve air worthiness standards, operator certifications, and environmental concerns.
Although analogous in some areas, divergence is found in the infrastructure requirements
and route scheduling. Air taxi services are a point-to-point transportation method, opposite
to that of station-based systems.
Table 3: Air Taxi Use Case Details [7]
Vehicle VTOL aircraft averaging one passenger per flight
Payload ~ 1,000 pounds
Distance ~ 10-70 miles per trip
Scheduling and
routes
Routes are unscheduled and vary trip by trip
Infrastructure
• Vertistops on or near buildings
• High density of available locations
• Separate charging and service stations
Technology
• Advances in battery technology
• Electric propulsion
• GPS technology
Potential
regulatory
requirements
• Air worthiness standards
• Weight and altitude restrictions
• Operator certification
• Environmental restrictions
Competing
technology
• Private vehicles
• Vanpools
• Paratransit
2.3 Alternative Flow Analysis
Once two possibilities for the future of UAM are understood, differences are
expanded upon, identifying the best path for technology adoption. Both cases use the same
aircraft design and are bound by identical technological and legal restrictions. Separation
occurs at the route and schedule definition. Since these aspects are not predefined for air
taxis, the infrastructure necessary to support this system becomes more complex. The cost
of ubiquitous destination points may make air taxi services cost-prohibitive [7]. Best case
cost estimates predict between $131 to $1,912 per flight, a drastic increase compared to
ground-based modes of transportation. However, consolidating infrastructure to specified
stations increases the profitability of UAM significantly.

Figure 8: Air Metro Market Profitability [7]
Given the modeling provided by NASA and the Georgia Institute of Technology,
the UAM air metro market could be profitable by the year 2028 [7]. This assumes that all
regulatory obstacles are overcome. Regardless, structuring UAM procedures similar to
those of bus or train systems is more profitable than individual taxis. Cost savings is mostly
driven by establishing UAM stations rather than point-to-point transportation. The latter
will require a far more complex infrastructure network, hindering effectiveness.
In summary, the alternative flow analysis of two UAM use cases highlights the
benefits of a public transit solution. Rather than advocate small, personal UAM vehicles,
designs should focus on larger solutions capable of higher throughput. The infrastructure
requirements of this application are more simplistic, which could lead to easier regulatory
compliance. When envisioning this infrastructure, scheduled metropolitan bus and train
services are quintessential. Modeling the typical process flow of these transportation
methods will give more insight into UAM development costs.
-5
-4
-3
-2
-1
0
1
2
3
4
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Air
Metro
Profit
($
billions)
Year

3 STAKEHOLDER IDENTIFICATION
Upon introducing the intended technological advancement to urban mass transit
systems, focus shifts to initial planning and stakeholder analysis. These are important
aspects to consider early in project development and help define scope. To best satisfy
requirements, a suppliers, inputs, processes, outputs, and customers (SIPOC) derivation
sheds insight on how mass transit could adopt UAM inventions. A SIPOC diagram is a
lean six sigma tool for mapping a project, which establishes the range of project
expectations [9]. In this system, suppliers provide resources for inputs and outputs yield
products for customers. All of this is linked to the intended process flow, completing the
examination. Once the SIPOC representation is constructed, stakeholders relevant to the
project are identified. Including individuals from industry, governmental, and academic
sources, stakeholders impacted by UAM have a diverse range of backgrounds, requiring
careful oversight. Best accomplishing this is a project management tool known as a
responsible, accountable, consulted, informed (RACI) matrix [10]. Building on the SIPOC
analysis, the RACI matrix is best used for overseeing various processes. Becoming more
detailed, the matrix defines project roles.
3.1 SIPOC Analysis
The first step in stakeholder identification is estimating the intended scope. As
previously described, a SIPOC diagram is a lean six sigma tool used for project
management. In the case of UAM, defining the process of personnel transportation gives
an understanding of the inputs and outputs driving the system. This starts with passengers
arriving at the UAM terminal, similar to light rail systems. People are then loaded on the
aircraft and move to the desired destination. Upon arrival, the aircraft lands and the
passengers disembark, finishing the process flow.
Figure 9: SIPOC Diagram of UAM for Mass Transit

Following the methodology of UAM for mass transit, analysis expands to the
input/output relationships required for operation. There are six inputs considered including
ground vehicle parking, facility design, aircraft loading procedures, aircraft flight
performance, air traffic management, and aircraft maintenance. These are important factors
driving advancement of the technology. In tandem with the inputs, the outputs are vehicle
condition, flight costs, safe passenger operations, and travel speed. Expanding the analysis
another layer provides the suppliers necessary for input variables and beneficiaries to the
outputs. Suppliers supporting the system involve infrastructure development organizations,
air vehicle manufacturers, and regulatory agencies. Finally, customers are comprised of
individual users and municipal civic services. Tying these aspects together allows for a
more detailed view of the project’s goals, which is critical for proper stakeholder
identification. Upon completion, the SIPOC analysis highlights the market segments and
organizations needed for successful project oversight.
3.2 Primary User Identification
Using the previously discussed SIPOC analysis, market segments identified yield
primary users of the product. These sectors have mostly focused on the creation of UAM
aircraft, but not necessarily the infrastructure needed to support said vehicles. Regardless,
it is important to evaluate the aircraft utilizing this infrastructure. The specifications and
requirements of each design are useful when envisioning future needs. Prominent UAM
aircraft developers include those listed as follows.
Table 4: Primary User Identification for UAM
Airbus
• Large commercial aircraft manufacturer who has
UAM designs
• Registered in the European Union
• Key people include
o Joerg Mueller – Head of UAM
o Andreas Thellmann – Commercial Success
Urban Air Mobility
o Joe Polastre – Head of UTM Products
Uber
• Ridesharing company transitioning to UAM
products
• Registered in the United States
• Key people include:
o Nikhil Goel – Founder of Uber Elevate
o Jalen Doherty – Strategy Lead
o Ryan Naru – Regulatory Affairs
Lilium
• UAM specific manufacturer
• Registered in Germany
o Daniel Wiegand – CEO
o Will Nicholas – Head of Public Affairs

3.3 Other Stakeholders
Along with aircraft manufacturers, other groups have a stake in the growth of UAM.
These include regulatory agencies, academic researchers, and civic service managers.
When designing infrastructure for UAM these groups are enablers to design success.
Regulatory agencies will have a large influence on the adoption, and implementation of the
project. This precedence is generally set by academic research in the field, diversifying
stakeholder selection. Ultimately civic service organizations will fund the development
project, so an effective case study is necessary to win project approval. Prominent people
in these areas include those listed as follows.
Table 5: Other Stakeholders of UAM
Regulatory Agencies
• Air traffic regulators such as
o FAA
o EASA
o TCA
• Key people include
o Katie Constant – UAS Technical Project
Lead at the FAA
o Thomas Oster – UAS/RPAS Airspace
Integration at EASA
o David Dunning – UAM Program Manager
at the FAA
Academic Researchers
• Research involving air traffic management and the
integration of UAM
o Yi Gao – Professor of Aviation and
Transportation Technology at Purdue
University
o Amedeo Odoni – Professor of Air
Transportation and Urban Services at MIT
o Mykel Kochenderfer – Professor of
Aeronautics and Astronautics at Stanford
University
Civic Services
• Maintain methods of public transportation
• Ultimately the group purchasing the UAM
infrastructure
o Linda Johnson-Wasler– Commissioner of
Pittsburgh Civil Service Commission
o Steve Corbitt – Commissioner of Nashville
Civil Service Commission

3.4 Stakeholder Classification
Provided the stakeholders to UAM infrastructure, how these groups interact during
project execution is the next topic considered. Doing so entails the use of a RACI matrix
to better define roles for specific tasks. These tasks are fundamental components of UAM
infrastructure creation and operational requirements. While this list is fairly broad,
stakeholder identification, allotted by the SIPOC analysis, facilitates a diverse group of
involved parties.
Aircraft
Manufacturers
Regulatory
Agencies
Academic
Researchers
Civic
Services
Develop UAM aircraft R A C I
Establish UAM passenger loading/unloading process A R C I
Establish UAM air space and routing I R C A
Establish UAM air vehicle management system C A R I
Establish precedence on UAM pilot requirements I R C A
Establish UAM terminal locations I A C R
Figure 10: UAM RACI Matrix
As shown, six subjects have been identified as critical topics for UAM integration
into mass transit systems. In this representation “R” stands for responsible, “A” for
accountable, “C” for consulted, and “I” for informed [10]. Responsibility is spread between
relevant stakeholders, with regulatory agencies having the largest burden. For operational
use of UAM vehicles, regulators must create loading/unloading processes, air space and
routing, and pilot requirements. While civic services determine terminal locations, many
other external factors will impact the decision. With this in mind, it is evident that clear
communication between overlapping items is necessary. This is best accomplished by
following the interrelationships defined by the RACI representation.
3.5 Change Management Plan
Given the complexity of a UAM infrastructure project, adequate steps are necessary
for project communication. An important component of this communication is change
control. As scope creep is a common phenomenon in project management, the associated
costs could reduce effectiveness of mass transit solutions [11]. Furthermore, this effect can
compound whenever radical new technologies are introduced to the marketplace. The
change management process typically follows four steps. Beginning with definition, issues
are identified and marked for improvement. These are then communicated to relevant
organizations, which embed new concepts into the business. The final step is preparing
these companies at the individual level, ensuring all needed personnel are aware of the
upcoming changes. Creating a clear change management plan assists in developing a
method of introducing UAM to the mass transit industry.

Figure 11: Change Management Cycle [8]
Applying this cycle to UAM, important components for each topic are expanded
further. Change definition is identified in financial modeling of the existing system. This
leads to benchmark requirements that must be communicated to relevant stakeholders.
Embedding new UAM services into mass transportation follows approval from these
individuals. Once complete, flight crew training can begin, commencing operations. These
steps are detailed in Table 6.
Table 6: Change Management Cycle Definitions [8]
Define
• Understand the financial benefit of change
• Define how a UAM system enables this change
• Assess impact on the existing system
Communicate & Engage
• Explain benchmark requirements for UAM
• Communicate changes, and constants to the
stakeholder group
• Build a network within regulatory agencies
• Create feedback between regulators and operators
Embed in Culture
• Embed airway routing into existing air traffic
systems, processes, and policies
• Reinforce air travel as a suitable alternative to
ground transportation
• Measure ongoing performance and pursue
continuous improvement
Prepare Individuals &
Organization
• Identify UAM specific skills and behaviors
• Develop and implement flight crew training
• Define internal standard operating procedures

4 EXISTING SYSTEM ARCHITECTURE
Given the use case and stakeholder analysis of UAM, existing forms of mass transit
are expanded further. The goal is to identify strengths and weaknesses of current systems
and how new technology can improve these characteristics. The examination implements
several tools that relate to the functional, physical, and operational characteristics of
intercity transportation. These represent what the system will do, how the system is
constructed, and how the system serves end-users, respectively [12]. When considering
current modes of transit, these aspects are well established for many applications. In turn,
it is easy to quantify an economic value for each method. Variations in the aforementioned
architectures provide a diverse analysis when incorporating multiple existing systems.
With an invention as disruptive as UAM, defining a comparable financial model is more
difficult due to many unknowns about its operation. Actual performance of the system will
be impossible to measure before implementation, but the effectiveness of current
transportation solutions constructs baseline requirements. Evaluating several incumbent
technologies improves this estimation, creating a more vetted relationship between the
predecessors and new UAM services. The proposed UAM device must satisfy or exceed
the benchmarks generated before adoption will take place. If underperformance is
identified with respect to the current system, it must justify those drawbacks in other critical
areas.
4.1 Functional Architecture
The first representation of mass transit discussed is the functional architecture. This
defines what the system is designed to do, as well as what must be done to accomplish this
task [12]. It is related to the SIPOC analysis described in Section 2 but focuses more on the
process that transforms inputs to the desired outputs. Functional views provide information
including system functions, system performance, inter-function relationships, and
performance constraints. These are developed by decomposing the high-level activities
into lower-level equivalents [12]. As the design process progresses, the decomposition
becomes more precise, covering more nuanced facets of device capabilities. Since UAM is
a radical technology, a high-level expression of transportation is most desirable. More
refined depictions will be needed, but only after the innovation is financially justified.
Attempting to derive lower levels too early in development could prove counterproductive
due to changing high-level requirements. Figure 12 shows the functional architecture for
three common intercity commute methods.
Figure 12 Functional Architecture of Mass Transit [13], [14]

In this depiction, the user has the choice between three commute types once leaving
the departure location. They could travel by highway, railway, or bus. The critical segment
of this functional diagram is the time spent managing traffic, which all modes experience
at some level [14]. Once this is completed, the user will arrive at either a parking garage,
bus station, or rail station, depending on the transit method selected. From here they will
move to their final destination via a secondary form of transportation, typically human-
powered. This is important to note as most intercity commutes do not allow for primary
travel directly to the desired location.
4.1.1 Nonfunctional requirements
In conjunction with the functional architecture, nonfunctional requirements are
important when explaining the intended use of a system. Rather than describe components,
these characteristics are quality attributes. They are considered subjective, relative,
abstract, interacting, and not uniform in nature [15]. While it is easier to measure purely
functional aspects, an effort is needed to ensure these factors are incorporated into the
design process. This is essential in attracting and retaining end-users as these qualitative
dimensions have a large impact on consumer perception. When analyzing mass transit, five
nonfunctional requirements relate to overall performance, which are described in the
following list.
• Performance – must be able to move people and goods from one point to another
• Safety – must be able to perform this transportation with a high level of safety
• Reliability – must be able to render services on a consistent basis
• Economically – must be accomplished without excessive expense
• Usability – must be easy to use and operate as both a driver and a passenger
Together performance, safety, reliability, economically, and usability impact the
effectiveness of existing functional architectures. Performance is driven by the ability to
transport people and goods at a high rate of speed. This cannot be achieved by creating an
unsafe system as it will deter consumers from the transit solution. Also, when considering
reliability, inconsistencies in scheduled arrival and departure times will adversely affect
user experience. In hand with this, should the scheme have poor reliability it is likely to
incur high operation costs, making it less economical. Finally, the system must be usable
to all individuals involved in its processes. This includes both operators and passengers.
4.2 Physical Architecture
The next mass transit topic discussed is physical architecture. A physical depiction
focuses on how the system is constructed [12]. It defines the interfaces between operators
and equipment, along with supporting technology requirements. These pieces combine to
form the system that end-users encounter and must be developed in a manner to efficiently
accomplish functional tasks. It also highlights important limitations of the system.
Technology restrictions, underdeveloped items, and necessary standards are all identified
in this architecture. Since physical characteristics deal with how the system is built, they
play a large role in defining scope and constraints [12]. UAM is expected to have similar
physical requirements to current systems, with some variations in the infrastructure
demands.

Figure 13: Physical Architecture of Mass Transit [13]
The physical architecture for mass transit is broken down into four different
categories including travelers, vehicles, roadside infrastructure, and supporting
information centers [13]. Travelers include people, cargo, and emergency service
individuals. These groups represent not only end-users of the functional architecture, but
also have an impact on physical requirements. Along with this, vehicles that facilitate use
of the system are personal transit, commercial, emergency, and construction vehicles. The
operation of these vehicles requires maintained infrastructure, which is split into roadside
and information center categories, Roadside infrastructure involves the roadway, or
railway, parking accommodations, and traffic signals and signage. Information centers help
manage mass transit services by overseeing traffic flows, vehicle upkeep, and emissions
[13]. The proposed system will focus on roadside infrastructure, overlapping with the
supporting facilities. It is assumed that the travelers will remain unchanged and that a
competitive UAM vehicle is made available.
4.3 Operational Architecture
The final architecture relates to how the system is used by consumers or the
operational architecture. This type of representation includes operational needs, sequences,
environments, and constraints, as well as conditions to which a system must respond [12].
These are useful in defining process life cycle requirements and tie into functional usability
of the device. Also, incorporation of qualitative assessments such as how well the system
will perform, or which conditions cause optimal performance, improves impact of the
analysis. The operational architecture for mass transit is more sophisticated than the
functional or physical equivalents as use of the system relies heavily on their limitations.
To create an assessment relevant to UAM, the depiction must include how operation of
different commute methods interacts with overall traffic congestion [14]. The largest
benefit to UAM technology is a reduction in this congestion, which should be emphasized
in the evaluation. As such, Figure 14 describes the operational architecture of
transportation and how it specifically relates to overall travel time, speed, and costs.

Figure 14: Operational Architecture of Mass Transit [14]
The breakdown of this architecture is complex but revolves around several key
concepts. The bottom left of Figure 14 expresses how transportation investments are
gauged and lead to the evolution of industry. As this advancement progresses, it changes
both the capacity and accessibility of the infrastructure network [14]. In conjunction with
the network of vehicles using the system, the infrastructure defines external and operational
costs, which sum up the total travel costs. On the right side, operation of the transit system
enables trip generation, trip distribution, a variety of mode choices, and route assignments.
These compound to form the travel volume. A critical aspect of the operational architecture
is the equilibrium travel speed. This is dependent on the total travel volume and impacts
the infrastructure and vehicle networks [14]. An ideal system would have both a high travel
speed, with future designs aiming to improve this variable. Also, when considering new
infrastructure, weighing the benefit of an investment against the total travel cost highlights
the financial case for new development. Performance of existing systems can be modeled
using this architecture as a basis for the analysis. When considering new construction,
impact of the change must be evaluated against the cost and the potential increase to
equilibrium travel speed.

5 EXISTING SYSTEM SOLUTION ANALYSIS
Considering shortcomings presented in the existing system architecture, several
techniques have been implemented to rectify the drawbacks of current solutions. These
should be further analyzed before attempting to design new technology as their limitations
are insightful. Along with this, innovation adoption is more likely to occur if it has similar
requirements to services already in place. The new device can utilize incumbent facilities,
reducing the cost, and risk, of unproven machines. As shown in previous sections, critical
factors of mass transportation are the equilibrium travel speed and total traffic volume.
Methods of improvement involve increasing the latter, which normally entails additional
development. The idea is to improve the operational architecture by increasing the
equilibrium travel speed. This research will focus on the infrastructure aspect of system
advancement and will explore several different types of construction projects. To better
understand the effects of relevant endeavors, a study by the European Commission
Directorate for Regional and Urban Policy is incorporated. This is a cost-benefit
assessment for a number of transportation system implementations [1]. The report covers
three different use cases including roadway construction, railway construction, and urban
mass transit service development. Each presents the financial investment necessary to
create the system enhancement, along with justifications for said investment. Combined,
the representations provide a clearer insight into existing system requirements. A more in-
depth explanation of the undertakings, and the expected benefits, is expanded upon further
for each specific case. The infrastructure needed, the cost of this infrastructure, and the
expected return on capital are topics included. When looking at the potential benefits,
average yearly passenger counts are indicative of this metric. The more people serviced,
the more valuable the time savings.
5.1 Roadway Construction
The first infrastructure project evaluated is roadway construction. This form of
development can be conducted in one of two ways. Either existing roads are expanded to
accommodate more traffic, or new roads are built to divert traffic away from high-demand
regions. A middle-ground solution between railways and urban mass transit systems, the
project involves maintaining only one set of infrastructure. In the European Commission
report, an example of this is a new 16.4-kilometer tolled roadway bypassing a highly
congested highway corridor [1]. The road is to be four lines wide, two in each direction,
and will require three bridges, four overpasses, and one tunnel. This investment is expected
to cost $423.2 million and service 60% of the traffic traveling this route. Also, the average
speed is expected to increase by 25%, reinforcing the financial justification. As equilibrium
travel speed is the critical factor to the operational profile, a large increase merits the high
price. Furthermore, the average passenger will save around 12 minutes when traveling the
full length [1]. This example shows how roadway construction can be utilized to improve
traffic congestion. When undertaking this type of project, stakeholders should seek out the
bottlenecks and chokepoints within the existing physical architecture. Two solutions are
available to lessen impacts of slowdowns in these areas and involve either current roadway
expansion or new roadway construction. The end goal is to increase the total volume
capacity of the system, leading to a higher equilibrium travel speed. In turn, this causes an
increase in the value of time generated.

5.2 Railway Construction
Along with roadways, railways are another type of infrastructure designed to reduce
traffic volume. These are useful for long-distance transportation and are capable of
delivering both passengers and freight cargo. In general, railway development is the most
expensive project of the three discussed. It entails creating and maintaining a new piece of
infrastructure in addition to roadways. The advantage of this solution is less reliance on
highways and alternative transit options. In the research provided by the European
Commission, this project involves upgrading an existing railway connecting two cities. The
stretch of rail is 94.8 kilometers long but will be reduced to 89.5 kilometers with the
proposed path [1]. Doing so requires refurbishment of 63.5 kilometers of track and the
construction of 26.0 kilometers of new track. Two 1.3-kilometer single pipe tunnels are
needed, in conjunction with 13.7 kilometers of retaining walls and 1.3 kilometers of slope
protection corrections. In all, the total project cost is expected to be $941.9 million. The
system created with these funds will be able to service almost 5,000 passengers, as well as
12,000 tons of freight, per day [1]. As described, railway construction is one of the more
expensive ways to combat traffic congestion but can be the most valuable. Flexibility
allotted to transportation in the locality helps offset the large upfront investment needed to
build track infrastructure. The goal in this example is to divert passengers off of roadway
systems and onto new rail services.
5.3 Urban Mass Transit System
The final solution for decreasing travel times is the introduction of an urban mass
transit system. This solution is a multitier system, including aspects from railway and
roadway designs. Urban transportation systems normally involve a type of light rail metro
allowing for travel between suburban regions and a city center. Although this does require
a large capital investment, similar to the railway project, it is far less due to the length of
track needed. Supporting the tram line, road-based public transportation is also included in
this system. As described in previous sections of this report, intercity commutes are
dominated by individual passenger cars. While convenient, these are an inefficient use of
roadways as they require a large volume per passenger. To make better use of this space,
buses and paratransit vehicles allow for more travelers per unit volume. The example
provided by the European Commission describes how these vehicles are combined in an
urban mass transit solution. This example begins with the construction of nine kilometers
of double-track tram lines and the purchase of 15 new tram sets [1]. The track will run
parallel to existing roadways and have several stations along the route. Existing bus
services will be rerouted to serve as feeders for these stations, which is expected to increase
bus demand by around 50%. The system is expected to be used by 11.7 million passengers
per year. Total cost for this package is $193.4 million [1]. When considering an existing
system that best represents a possible UAM solution, the urban mass transpiration system
is an exemplar. Light rail trams could easily be substituted for light rotorcraft, should a
business case be established. This system will be the basis for the existing system
performance assessment and related benchmarks.

6 EXISTING SYSTEM PERFORMANCE
Following the explanation of different solutions to mass transit, discussion
transitions to performance of these projects. When establishing the need for innovations,
those developed must be able to rectify shortcomings of the incumbent technology. Doing
so requires an analysis of the existing system that identifies, and measures, critical aspects
of the design. The methodology involved begins with incorporating the solutions described
in Section 5 and their implementation strategies. The operational profile of diverse
undertakings generates an inclusive representation of current techniques. It also gives
insight into the effectiveness of alternative transportation modes. Ultimately, these profiles
are aggregated into a performance assessment for the existing system. This evaluation
provides factors driving the financial justification for additional investments. The
information allows for a root cause analysis of underperforming aspects, yielding how to
best enhance current solutions. Although this representation describes a need for change,
it is important to consider other ramifications of any modification. Implications of system
improvements aim at identifying any additional externalities that were not accounted for
in the existing system operational profile. Results of this investigation define benchmarks
for novel inventions, increasing their effectiveness and economic value.
6.1 Current System Operational Profile
Beginning the performance analysis, different operational profiles of current
systems are combined for an expansive assessment. These profiles are use cases for the
current technology, exemplifying common applications. When considering mass transit, a
number of solutions have been attempted, with a variety of impacts. To better understand
the effects of relevant projects, research from the European Commission Directorate for
Regional and Urban Policy is incorporated. The purpose of this study is to conduct a
financial feasibility appraisal of infrastructure designs. More specifically, transportation-
related construction. This investigation revolves around a cost-benefit analysis concerning
new investments [1]. When estimating the benefit, five variables are defined in the
valuation. These include travel, operating, environmental, noise, and accident costs.
Combining these aspects provides a financial model for mass transit. The results of this
model for various transportation systems highlight the underlying performance
characteristics. Details on each variable are described in greater depth in the following
sections.
6.1.1 Travel costs
Travel cost is the first item included in the operational profile. This is defined by
the amount of time it takes to travel from departure to arrival locations within the existing
system. While the value of time can vary from individual to individual, an effort is needed
to reduce the amount to a single quantifiable number. Also, a distinction is made between
the value of passenger and freight transit durations. The prior is far more complex as it
involves a degree of subjective judgment. To accomplish this a revealed preference
approach is utilized to approximate the human value of travel time [16]. This method looks
at decisions made by people under different circumstances to achieve their desired
outcomes. The choices made reveal the preferred solution and how much the group is
willing to sacrifice for that result. An example of this is analyzing toll road usage during
vacation season [16]. Although toll roads will increase the overall trip cost, they reduce the
travel time. The decision to use these roads is purely elective, giving insight into their value

as seen by the population. When considering freight transportation, the cost of time is more
straightforward. This case relies on a capital lock-up approach based on the amount of
cargo being shipped [1]. Given the economic value of the payload, and the expected travel
time, the time value of money is an ideal approximation of cost.
6.1.2 Operating costs
The next aspect of the operational profile described is the operating cost. This is
comprised of two different classifications, one pertaining to use of the physical system and
the other to overhead incurred by system providers [1]. System use requires maintained
vehicles for consistent operation. To ensure this, items such as fuel, lubricants, tires, and
other mechanical components are necessary. The price associated with these items varies
for different types of mass transit but is fairly predictable. While vehicles will wear at
different rates, high traffic congestion and unsatisfactory infrastructure lead to a quicker
decline [1]. The price value of transportation systems, with respect to operating costs, is
evaluated based on the reduction in roadway usage. With fewer vehicles utilizing ground
infrastructure, these costs will be lowered.
6.1.3 Environmental costs
Along with operating costs, improvements to transit services affect the
environment. When analyzing this aspect, the critical factor is air quality as it directly
impacts the health of surrounding populations. Poor conditions lead to an increase in a
variety of respiratory problems and myocadiac infarctions [17]. Air pollution also impacts
building, crop, and other material losses. Reductions in carbon monoxide, nitrogen oxide,
and sulfur dioxide gases generated by vehicles mitigate these drawbacks, which assists in
justifying the cost of new designs. These toxins are primarily measured by the United States
Environmental Protection Agency with minimum requirements defined in the National
Ambient Air Quality Standards. The associated cost is derived from these guidelines and
is driven by traffic volumes, speeds, and road surfaces [1]. In conjunction with causing
pollution, greenhouse gas emissions contribute to global warming. This phenomenon has
an expansive influence on both society and the economy, but is difficult to quantify. An
acceptable method involves combining production of the aforementioned gases into a
single unit, or a Global Warming Potential Unit [1]. The amount produced is compared
against established cost predictions, which incorporate rising sea levels, loss of agriculture,
biodiversity impacts, and an increase in extreme weather.
6.1.4 Noise costs
Noise is an additional cost related to public health. This pertains to excessive noise
levels that cause disturbances, subtracting from wellness. The impact of noise is dependent
on the frequency weighted exposure, measured in decibels, and the duration of said
exposure [18]. Maximum levels are not to exceed 24 hours at 70 decibels, or up to 0.3
hours at 90 decibels. Contact above these guidelines has been directly linked to permanent,
irreversible noise-induced hearing loss [18]. Additionally, sustained levels above 50
decibels are found to cause cardiovascular disorders [1]. Gauging the economic value of
noise is done by considering its effect on nearby property and real estate. Transportation
systems frequently exceed the aforementioned daily limits, especially those in close
proximity to personal residences [18]. Generally, property near roadways, or other noisy
services, have lower values than their equivalents further from the source. This provides

insight into the value of noise. Finding prices of real estate near mass transit infrastructure,
and comparing it to those not near this infrastructure, is a method of estimating the noise
costs of new construction [1].
6.1.5 Accident costs
The final component of the operational profile is the cost of accidents. Individual
vehicles are historically more dangerous than mass transportation services [17]. Citing the
United States Department of Transportation, passenger cars account for 47% of all
transportation accidents, while railways attribute to less than 0.3%. This is particularly
notable as rail systems operate at a greater average speed than automobiles [17].
Understanding the effect of these accidents entails direct and indirect costs [1]. Direct costs
are valued by the cost of injuries, emergency services, and insurance. These drawbacks are
well documented and are set by historical data. Indirect costs have to do with the value of
life, which is difficult to estimate. A common method of approximation is using a human
capital approach. This considers what individuals are worth to society based on what they
can produce in the remaining years of their life. While both the direct and indirect costs
can vary significantly for different accidents, average values are a convenient way to the
measure influence of new systems.
6.2 Current Performance
Following derivation of the operational profile for existing transportation systems,
the current performance of these systems is found. To improve results of this assessment,
three different solutions are studied. These were previously described in Section 5 and
include roadway construction, railway construction, and urban public transit development
projects. While all three have different requirements, financial justification of their
operation revolves around the predefined model. Each undertaking attempts to reduce the
travel costs of preexisting infrastructure. Furthermore, the reduction is facilitated by
impacting time, operating, environmental, noise, and accident costs as noted in previous
sections.
Figure 15: Cost Improvements for Urban Public Transit [1]
61%
29%
7% 2% 1%
Time costs (61%)
Operating costs (29%)
Environment costs (7%)
Noise costs (2%)
Accident costs (1%)

Figure 15 shows the performance of an urban public transit project. In this scenario,
time costs dominate the economic model, making up 61% of all future cash flows. The
ability to reduce time spent in traffic is the largest selling point in all of the included case
studies. When looking at railway construction, the value changes to 59%, and jumps to
87% for roadway investments [1]. The second most influential characteristic is the
operating costs, varying between 9% and 31%. Environmental costs are prominent in the
public transportation scenario due to efficient ride-sharing. Along with this, the noise
reduction is considered negligible for both roadway and railway construction. The last
aspect of the operational profile, accident costs, is most evident in railway
implementations. As previously discussed, rails make up a small fraction of all
transportation-related accidents. Road-based vehicles are exposed to similar failure risks
regardless of new roadways or ride-sharing. Operation of alternative infrastructures, such
as railways, provides an opportunity to reduce the number of accidents or vehicle failures.
In summary, the critical component of the operational profile is time costs. Creation of new
transit systems is mostly justified by reducing the total travel time. As urbanization
increases, heavier demands are placed on traffic infrastructure, leading to more congestion.
6.3 Root Cause Analysis
Given the high correlation between time costs and existing system success, a root
cause analysis is conducted solely on this characteristic. Doing so entails the use of a cause-
and-effect diagram, more specifically a dispersion cause-and-effect diagram. The goal of
this approach is to break down causes into more detail, which helps organize and relate
factors [19]. A five-step process is followed to generate the depiction and begins with
identifying the problem to control. This is then labeled and drawn with an arrow leading to
it. Main factors contributing to the problem are indicated as major branches shooting off
the aforementioned arrow. These are expanded further with twigs breaking off of the major
branches, ensuring all items causing the problem are well described [19]. With the
methodology understood, a root cause analysis can be performed on traffic congestion.
Figure 16: Cause and Effect Diagram for Traffic Congestion [20]

As revealed by the performance assessment, time costs are the most influential
reasons for mass transit systems. The underlying cause of high travel times is traffic
congestion, which is shown as the main problem. Four primary factors contribute to traffic
congestion and include high vehicle counts, accidents, poor vehicle maintenance, and poor
infrastructure maintenance [20]. Considering high vehicle counts, two secondary causes
drive this type of situation. The locality is generally overpopulated due to a desirable
geographic region or strong job market. Also, limited ride-sharing, caused by difficulty in
coordinating the activity, plays a role. Accidents are frequently attributed to distracted
drivers who are faced with demanding driving conditions. Investigating issues with vehicle
maintenance finds that the increased complexity of new automobiles makes repairs more
expensive. In turn, drivers are less likely to keep up with necessary service. Finally, poor
infrastructure maintenance is mostly caused by underfunded projects. It becomes more
difficult to establish a need for upkeep if traffic congestion is not constantly monitored.
Similarly, environmental conditions can lead to rapid infrastructure deterioration,
exacerbating the financial drawback of adequate maintenance. Collecting these factors and
descriptions into a single, organized representation defines the cause-and-effect diagram
for traffic congestion. With it envisioned, proposed systems will have more information
for the benchmarking process.
6.4 Implications for System Improvement
The last topic included in the existing system performance evaluation is the
implications of system improvement. Although new developments will make measurable
differences to the benchmarked variables, the change may impact unknown industries that
are dependent on the current solution. Looking at a potential decrease in travel time is ideal
with respect to the value of time, but subtracts from markets like radio advertising. This
segment is reliant on the average number of listeners at any given time. During a rush-hour
commute, radio airway time is charged at a premium as it reaches the highest number of
listeners, or people in the traffic. Should a new system radically reduce the duration of
high-volume usage, the advertising revenue generated will drop. Also, lessening the
number of automobiles in circulation will influence several other industries related to the
vehicles themselves. Fewer automobile accidents are a strength of mass transit service but
will change insurance premium pricing. Likewise, maintenance items identified in the
operational profile will experience this effect. Resale values of used vehicles could become
more expensive due to a lack of supply. These examples are not included in the financial
modeling for the existing system as they pertain to entirely different market segments.
However, they are worth noting as implications for novel discovery. As technology
evolves, these secondary industries will need to adapt to maintain existing market share.

7 EXISTING SYSTEM BENCHMARK
Given the existing system performance assessment, benchmarks are established for
new advancements. As previously defined, the largest financial justification for mass
transit systems is time savings. Depending on the type of infrastructure constructed, the
value of time represents between 61% and 87% of revenue generated [1]. A root cause
analysis on existing traffic systems highlights congestion as the predominant limitation
causing travel slowdowns. High vehicle counts, accidents, poor vehicle maintenance, and
poor infrastructure maintenance are all factors that contribute to this effect. However, these
impact the overall performance to a lesser extent [1]. With this background information, it
is possible to benchmark the existing system. The process begins with quantifying a value
for travel time as viewed by the average consumer. This is then utilized in a financial model
for existing urban public transportation projects. A sensitivity analysis is performed on this
model, focusing on changes to the amount of time saved and the necessary investment to
facilitate this change. The goal is to decide if more expensive projects are worthwhile
should the transit duration decrease to acceptable levels. Considering an expansive range
of values is ideal and insightful when designing a replacement technology. Ultimately, the
existing system benchmarking ends with a theoretical representation of a helicopter
transportation service. This identifies current air-based solutions and their economic value,
which serves as a starting point for new UAM devices. The proposed system must exceed
this performance to be considered a feasible solution.
7.1 Benchmarking Time
Starting the discussion on benchmarking, the time variable is expanded upon
further. As shown, this is the critical argument for transportation investments, driving the
need for a better understanding. To accomplish this, the value of time spent traveling for a
motorist is established and clearly defined. This identifies what consumers are willing to
pay for their time and how often they make this payment. The investigation into this topic
is of high value to infrastructure developers. It assists in finding merit for expensive
construction undertakings, specifically urban public transit systems. Following derivation,
the associated time savings is applied to a model of this transportation method and
weighted against additional costs and benefits. Although there are many contributing
factors in these representations, this research will focus primarily on the time savings and
total investment costs. Overall performance is evaluated using three financial metrics
including net present value (NPV), internal rate of return (IRR), and modified rate of return
(MIRR). This comprises the base case modeling used in a further sensitivity analysis.
7.1.1 Value of time
Considering the value of time, a detailed representation of this characteristic is
necessary to assess its impact on transportation. The investigation will focus on the
passenger aspect and how people value time rather than cargo and freight implications. As
described in earlier sections, an ideal method of approximation is using a revealed
preference approach [16]. This analyzes decisions made by people under certain
conditions, which gives insight into their worth. In this case, evaluating toll road usage
during travel is insightful in gauging the value of time. The frequency in which certain
amounts are paid, under similar conditions, reveals the perceived value of time. Results of
this appraisal are expressed in dollars per hour of transit time saved [16].

Figure 17: Value of Time Spent Traveling [16]
This method shows that individuals frequently take advantage of toll roads if the
cost is relatively low. Typical values range between $4 and $23 per hour saved. Along with
this, as the price per hour increases, the amount of people electing to use the service
decreases exponentially. This indicates the value of transit time and the usefulness of a
revealed preference approach. Since the choice is purely elective, and under leisure
conditions, it provides an unbiased approximation [16]. Although travel time spent in
congestion is not the same situation as this representation, it is still a meaningful evaluation.
It could be argued that time spent commuting to work is of higher value than that of
recreation. This would further increase the impact of reductions.
7.1.2 Urban public transit time value
Once the value of passenger travel time is known, it is incorporated into the
modeling of existing urban public transit systems. Infrastructure development for this type
of service is costly, which demands a strong financial case before an investment is made.
This is found by implementing the modeling described in Section 5 of this report, which
outlines how different benefits are found. These are compared to development prices and
the related weighted average cost of capital (WACC). The creation of this service requires
land, building, and track construction [1]. Also, related to the trams themselves, rolling
stock, management systems, and machinery equipment are included with a 10%
contingency. The exact cost breakdown is not necessary but it should be understood that
$94.4 million is needed for the trams and tracks [1]. These components are specific to light
rail systems and could be substituted for a different type of passenger vehicle. A total of
15 tram sets will be purchased with a useful life of 20 years. Replacements will be bought
every ten years, keeping the maintenance cost at the defined level. The system is expected
to service 11.7 million passengers annually, mostly in the form of work-related commutes.
This will subtract from the total number of people using road-based transportation, which
is also factored into the output. In all, the project explored in this analysis is expected to
cost $141.1 million [1].
0
40
80
120
160
200
4 6 8 9 11 13 15 16 18 20 21 23
Frequency
Cost ($ per hour)

Figure 18: Financial Analysis of Urban Mass Transit Investment [1]
As shown, the first three years of the project are for construction and will generate
no positive cash flows. After this period, the value of reduced time, operating,
environmental, noise, and accident costs are detailed over 25 years. A distinction is made
between time and all other savings, accounting for 61% of the improvement alone [1]. After
25 years of operation, it is assumed that the purchased land, buildings, and rolling stock
are sold for roughly one-third of the original price. This is displayed as an investment cost
as it directly relates to the invested capital. From an economic standpoint, the example
project has a NPV of $41.7 million, an IRR of 8.9%, and a MIRR of 6.8% [1]. Comparing
these values to the WACC, or 5%, indicates the project is profitable and above required
levels. Furthermore, the positive NPV means service will generate more cashflows than
the needed cost of capital. This is a strong financial position and is indicative of why urban
transit systems are utilized in most metropolitan areas. Transitioning individuals onto a rail
service not only decreases their own commute time, but also the time of those still using
roadways.
7.2 Sensitivity Analysis
To find how different variables interact in the urban mass transit model, a
sensitivity analysis is performed. This focuses exclusively on the time value with respect
to the total project investment. As more cash is needed for system construction, the lower
the NPV will become. On the other hand, as the time saving grows, the NPV does as well.
A more expensive project could be economical if the travel time decreases proportionally.
Identifying how these factors are associated assists in justifying higher construction costs
that lead to faster travel times. The base case for this assessment is that described in the
previous section, which has a NPV of $41.7 million [1]. To find how the metric changes
for different situations, the value of time and total investment costs are increased in
increments of 50% to a maximum of 250%. Reassessing the NPV under several different
conditions reveals trends within the modeling.
($40)
($20)
$0
$20
$40
$60
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 20 25
NPV
(millions)
Year
Investment Costs Time costs Remaining costs

Table 7: NPV Sensitivity Analysis (millions) [1]
Value of Time Increase
0% 50% 100% 150% 200% 250%
Investment
Cost
Increase
0% $41.7 $90.9 $140.1 $189.4 $238.6 $287.8
50% ($8.8) $40.4 $89.6 $138.9 $188.1 $237.3
100% ($59.3) ($10.1) $39.1 $88.4 $137.6 $186.8
150% ($109.8) ($60.6) ($11.4) $37.9 $87.1 $136.3
200% ($160.3) ($111.1) ($61.9) ($12.7) $36.6 $85.8
250% ($210.8) ($161.6) ($112.4) ($63.2) ($13.9) $35.3
The sensitivity analysis revolves around isolating two variables, the value of time
and the total investment costs. The prior has a value of $115.2 million in the base case,
while the latter is $118.3 million [1]. Combined with the extraneous, static factors not
included in the analysis, the base NPV matches the previously defined $41.7 million. From
here, it is possible to vary the value of time and total investment costs to identify underlying
trends in the model. As shown, there is nearly a one-to-one correlation between increases
to both variables. If the total investment cost increases, it must provide an equivalent
increase in time savings for an identical NPV. A more expensive project is financially
equivalent should this occur. It is important to note that the excluded items, such as
operating, accident, and noise costs are all held constant. This assessment focuses strictly
on the value of time, the total investment costs, and how these factors influence the overall
project NPV.
7.3 Adjusting Model for Existing Air Vehicles
Following the sensitivity analysis, the urban public transit model is modified again,
this time incorporating air vehicles. Since the previous examination identified higher-cost
projects are feasible with more time savings, a helicopter use case is taken into account. It
is understood that existing designs are not economically justifiable for mass transit
applications, but making this adaptation is insightful for new UAM vehicles. In the
previously detailed model, tram costs are approximated at $94.4 million, including the
trams and the track infrastructure [1]. This investment is expected to service 11.7 million
passengers annually. To achieve similar results with existing helicopter air vehicles, a least
25 Boeing Chinooks are necessary. The seating capacity for a Chinook is about half of a
typical light rail tram, but it is assumed a similar traffic volume can be achieved with this
quantity. The retail price for this aircraft is $32 million, totaling $800.0 million for the
intended use case [21]. Since little to no new infrastructure is necessary for helicopter
operations, this value is directly substituted for tram costs in the financial modeling.
Although this craft is nearly a factor of ten more expensive, it may be offset by gains in the
travel time reduction. Section 6.2 emphasized how this effect can merit higher up-front
investments. It is assumed that commuting via airways will double the value of time, well
under the required one-to-one price relationship. After 25 years, the aircraft, and related
infrastructure, are assumed to sell at one-third of the original purchase price.

Figure 19: Analysis Utilizing Boeing Chinooks as Transit Vehicle [21]
Results of this assessment highlight how cost-prohibitive this implementation strategy
is. The investment necessary is not supported by a comparable increase in time savings. In
turn, the project NPV is (284.7) million with an IRR of 1.17% and a MIRR of 2.59%. All
of these indicators point to project rejection [1], [21]. While this representation may not be
entirely accurate, it does provide a general idea of the economics behind this type of
service. Vehicle operating and maintenance costs are held constant between the trams and
helicopters, which may underestimate those of a more complex vehicle. Along with this,
noise and environmental costs may also slightly increase. However, these are difficult to
approximate given the unknown nature of this type of operation. In all, existing helicopters
are not suitable as a mode of public transportation. The value of time for an average
passenger does not justify the expense. For more widespread adoption, new UAM
technology must cut these costs. Should an air vehicle be manufactured with this in mind,
the project can be reassessed for feasibility. The higher investment amounts must improve
the time savings, for an average commuter, by a direct one-to-one ratio. Establishing this
baseline is the first step in UAM introduction. Once this is achieved, research into less
critical variables, such as operating, noise, and environmental costs, can be conducted to
support sustainability.
($300)
($200)
($100)
$0
$100
$200
$300
$400
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 20 25
NPV
(millions)
Year

8 PROPOSED SYSTEM REQUIREMENTS
Transitioning away from existing mass transportation systems, a new UAM service
is evaluated. This proposed system is rooted in known technologies previously discussed
but looks to rectify their shortcomings. As expanded upon in the existing system analysis,
time lost due to traffic congestion is a leading cause for novel discovery on the topic of
urban transit. Identifying this cause is beneficial when developing new devices as it
provides a baseline for effectiveness. UAM innovations must exceed the established
benchmarks for travel time to be considered a feasible alternative solution. In hand with
this, cost for the proposed system must be within an acceptable range. Also previously
discussed, the dollar-for-dollar price increase over comparable ground vehicles must match
that of the transit time saved. Should this be met, UAM will be competitive in the mass
transportation sector. Proposed system requirements are based on this condition and will
attempt to match current designs for easier market introduction. To better understand
deviations for predefined existing services, several topics are described in greater detail.
First, the benchmarked requirements identified in Section 7 are assessed, justifying the
aforementioned architecture modifications. These are the minimum characteristics
necessary for a viable UAM product. Increasing the scope to include beneficial, but not
critical, aspects of the proposed system allows for further reinforcement of innovation
value. Technical performance metrics are covered last and detail methods to measure
efficiency of changes to the system.
8.1 Benchmark Requirements
Following identification of the architecture changes, the benchmark requirements
of new UAM applications are needed. These are the characteristics that are essential for
technology adoption and economic feasibility. Derived from the existing system, the
benchmark points are a result of the assessment made in Section 7 of this report. As shown,
a profitable urban mass transit system will service 11.7 million passengers a year, for a
total of 25 years [1]. This enables $115.2 million time savings, versus a $94.4 million
vehicle cost over the same period. In all, the base case evaluation had a NPV of $41.7
million and was the basis of further sensitivity analysis [1]. When the total investment cost
was increased, the value of time had to increase at the same rate. If this occurs, the urban
public transit service's 25-year NPV remains fairly constant. The result yields benchmark
requirements for an equivalent UAM system. Derived from the existing system assessment,
four key requirements must be met for invention acceptance.
• Vehicle unit price less than $10 million
• Travel time is three times faster than ground transportation
• Vehicle passenger capacity of 55 adults
• Capable of continuous operation
First, the vehicle unit price must cost less than $10 million. Evaluating a
transportation system utilizing current helicopters emphasized cost limitations. Although
they reduced the travel time, the price difference between them and light rail trams was not
able to sustain a profitable venture. The price of $10 million per vehicle is a significant
reduction from the $32 million Chinook [21]. For a further increase in value, the travel
time of new UAM devices must be three times faster than ground transportation. The

Infrastructure Requirements for Urban Air Mobility: A Financial Evaluation

Infrastructure Requirements for Urban Air Mobility: A Financial Evaluation

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Infrastructure Requirements for Urban Air Mobility: A Financial Evaluation