While working at Sony in 2012, Rob Wiesenthal, the co-founder and CEO of BLADE Urban Air Mobility, was invited to travel by helicopter from Manhattan to Long Island. That day, he noticed another helicopter left the East 34th Street Heliport for the same destination. Combined, these helicopters could transport 12 people, but they only carried three passengers. Wiesenthal knew that chartering a helicopter to fly 90 miles cost about $6,000, and he researched that the average helicopter carried 1.7 people. While helicopter rides have historically been an extremely expensive luxury, Wiesenthal saw a business opportunity with lots of potential. He hatched an idea to aggregate demand in order to lower prices by crowdsourcing helicopter transportation and co-founded BLADE in 2015.
On Tuesday, April 16, 2019, Bloomberg Television’s Scarlet Fu discussed the customer experience, the crowdsourcing of transportation, and the future of short distance aviation with Wiesenthal as part of the Cornell Tech @ Bloomberg Speaker Series at Bloomberg’s Global Headquarters in New York City.
Wiesenthal, whose background is in entertainment and creating brands that have an emotional connection with people, saw friction in the aviation experience, whether that was the cost or the actual experience – passengers waited in a room with elementary school lighting, old magazines, and a popcorn machine.
“A lot of times, people create companies where it’s almost like they’re in search of a problem to solve – this just felt like a big problem,” said Wiesenthal.
He started BLADE with $50,000 on the belief that, if they could aggregate enough people, they could create less expensive helicopter flights. During peak travel times, BLADE took the economic risk and scheduled flights, but during off-peak times, passengers could schedule a flight using their app and then share it with their friends. If just one other person joined that flight, the person who chartered that flight received a 20% discount.
Aviation companies are not just about the flight though. Passengers show up 45 minutes prior to take off. To create a unique customer experience, Wiesenthal set up the company’s first BLADE Lounge at the East 34th Street Heliport. They asked ABC Carpet for free furniture that customers could purchase. They served rosé wine, which helped calm first-time helicopter passengers, and created a party scene on summer Fridays. “There’s a moat around New York City, and there’s no way to fly into Manhattan now without going through or around a BLADE Lounge,” said Wiesenthal.
In addition to New York City, BLADE also operates in San Francisco, Los Angeles, Las Vegas, Miami, and Nantucket, and is planning to expand to India in September. BLADE has 11 lounges in seven states, and they’ve focused more and more on shorter and shorter distances (under 30 miles).
Pricing the Flights
BLADE charges a flat fee of $195 for flights to and from Manhattan to JFK, La Guardia and Newark Liberty International airports, down significantly from its initial price of $695. There’s no surge pricing or upsell either.
“There’s a chicken and egg when it comes to aviation. That is, without a really robust schedule, you don’t get people, and without people, you can’t really afford to put on scheduled flights,” explained Wiesenthal. “You really have to invest in a market and get utilization up – we realized that was the problem we had to solve.”
Getting people to the airport was easy because they could land, get in a car, and that car would take them to their terminal. Arrivals were easier than departures because of flight delays, customs, and luggage. “What it was all about was flying every 20 minutes – there and back – and we have a network of cars,” said Wiesenthal. “This is all-inclusive of the $195. A greeter puts you in a car, they take you to the helicopter, and then you go to the West Side.”
Crowdsourcing the Schedule
Helicopter travel has become more accessible to more people through crowdsourcing, because now people can charter their own flight and sell those extra seats rather than pay for the entire helicopter. Wiesenthal soon realized they didn’t need to crowdsource and could schedule flights instead. He came to this realization after deliberately scheduling a flight 30 minutes before a crowdsourced flight at 4 PM – the charter passenger called BLADE to complain that the earlier scheduled flight was competing with their flight. While scheduled flights filled up, crowdsourcing still provided the company with valuable information about the market.
For example, in a leisure market, most people fly out of the city on Friday and return on Sunday. But, one Memorial Day weekend, BLADE noticed that more people wanted to return to New York City from Long Island on Saturday instead. BLADE was able to meet this unexpected increase in demand because the company is asset-light and doesn’t own any aircraft – they have deals with different operators. They soon learned that people were returning early to attend a Stanley Cup playoff game that the New York Rangers were playing in that weekend.
On another random Saturday in July, there were many crowdsourced flights booked to New Hampshire and Vermont, as parents were traveling to visit their children in camp on visiting day. Now, Camp Visiting Day is a BLADE product.
“Crowdsourcing for us was definitely the fuel that got the company going, and now, we use it for signals,” said Wiesenthal. “When we go into a new market, we will open up the app and allow multiple destinations, and we can see when people are creating their own flights – that becomes a signal for demand.”
City 2.0 and the Future
Right now, New York City swells up to hold nearly 10 million people during the day, and there are about 3 or 4 million residents, said Wiesenthal. There are about 170,000 ridesharing cars clogging the streets in New York City, and the average speed has decreased from 11 mph to 7.8 mph. The three potential ways to solve this problem are to make streets wider, go underground or travel above the traffic through the air.
“It’s going to happen in the air, and we’re betting big on the air,” stated Wiesenthal. “Today, its helicopters, and in the future, it’s going to be eVTOL – electric vertical takeoff and landing – vehicles. Our view early on was that eVTOL was going to take a longer time, and the only difference from what we’re doing today and what people will be doing in the future is that the aircraft that we’re using are louder and require more maintenance.”
Early adopters drive down costs and help build brand awareness. BLADE is able to drive down prices through utilization, frequency, and joint ventures. BLADE has joint ventures with Bell Helicopter and Lockheed Martin, and Airbus SE is one of their largest investors. In return, BLADE helps these companies learn about and understand urban air mobility, in addition to providing them with insights on conventional helicopters that have nothing to do with propulsion or aerodynamics, but instead focus on passengers’ needs.
For BLADE to scale, its product can’t be for a certain socioeconomic class, and people can’t be limited to one form of transportation, whether that be bike, scooter, car, helicopter or eVTOL. People need to use the right equipment for where they are trying to go, and to participate in that universe, urban mobility companies need to get prices down, said Wiesenthal.
Technology also helps drive down prices. As the technology improves and infrastructure allows for more urban aerial mobility, BLADE’s services will likely become more accessible to an even wider customer base. In five years, BLADE expects the price of a helicopter trip from Manhattan to JFK will drop from $195 to the $70-$90 range.
“We see eVTOL really much more in the future, but we’re making a bet that urban area mobility is here today – we’re not going to wait for it,” said Wiesenthal. “We’re going to work with the technology we have, get the prices down as much as we can, keep it as safe and reliable as we can, and then, transition people over time to the next generation when it’s available.”
You can watch the entire discussion below: