Billionaire Larry Page’s Kitty Hawk Is Making An All-In Bet On Robot Air Taxis. Its Program Head Is Out In Disagreement Over It.

Eleven years after Google co-founder Larry Page bankrolled one of the first efforts to develop an electric flying car, rivals appear to be accelerating past his company Kitty Hawk in the race to launch your daily commute into the sky. Fellow Northern California startup Joby Aviation and Germany’s Volocopter believe they’ll win safety approval for their electric air taxis in 2023, allowing them to commence limited rooftop-to-rooftop passenger service within initial cities, and Vermont’s Beta Technologies is making rapid progress as well, striking deals to begin delivering a cargo version of its aircraft to UPS and a passenger version to Blade Urban Air Mobility in 2024.

But there may be no first mover advantage in the uncharted skies of urban air mobility and CEO Sebastian Thrun has an ambitious plan to leapfrog the pack that he revealed to Forbes that hinges on convincing safety regulators to allow it to fly passengers without a pilot onboard—something that most other air taxi developers hope to do eventually but which they think is a tall order in the near term. Page and Thrun, a former Stanford roboticist who founded Google’s self-driving car program, have committed to a strategy in which Kitty Hawk will build a larger version of Heaviside, the prototype electric vertical takeoff and landing (eVTOL) aircraft it’s been working on since 2017, that will seat two passengers, up from one at present, and that will operate autonomously for the most part while being overseen by a pilot on the ground who will handle multiple aircraft at a time. The remote pilot will communicate with air traffic controllers and deal with situations that Heaviside’s artificial intelligence brains can’t.

Thrun, a bald, smooth-talking German who’s a prominent evangelist for how Silicon Valley tech can improve the world, says Kitty Hawk expects to win safety approval for its new air taxi within three years from the U.S. Federal Aviation Administration. “It’s a riskier path than going for a piloted aircraft but we believe the payout is 100X of what any piloted aircraft could be in terms of its business opportunity,” he says.

Thrun will do this without Damon Vander Lind, the engineer who conceived of and built the initial versions of Heaviside, a small, elegant airplane capable of taking off and landing like a helicopter that the company says has achieved efficiency and range in unmanned test flights that may be better than any other eVTOL yet. Vander Lind was sacked in May after months of tussling with Thrun and Page over the path forward, Thrun confirmed. Sources say Vander Lind thought their strategy too risky. His departure also comes after accusations that he was unreceptive to the ideas of his employees and hostile to some who disagreed with him, contributing to a toxic work culture. Vander Lind declined to comment to Forbes.

“Letting Damon go was one of the toughest decisions I’ve made in the last 10 years,” Thrun says. “He’s a world-class engineer.”

Filling some of the void will be a new chief operating officer: Chris Anderson, the former editor of Wired magazine and co-founder of 3D Robotics, which mounted an unsuccessful attempt to challenge DJI in the consumer drone market. Kitty Hawk is acquiring the company, which after mass layoffs and pivoting to producing commercial drone software, has returned to building a drone, this time for U.S. government use, that it’s in the process of getting FAA safety certification for, experience that Thrun says will be valuable for Kitty Hawk.

Vander Lind’s exit and the new path comes as the company has grappled with internal problems. Two female engineers quit in April complaining of sexism and poor treatment. Three engineers on the Heaviside program also quit over the past nine months, because, according to ex-employees who spoke with Forbes on the condition of anonymity, they believed they had been retaliated against by Vander Lind due to his suspicions that they were the authors of an anonymous safety report that was filed in late 2019. A fourth was fired.

The report, which was shared with Forbes, charged that Vander Lind was failing to close the loop on perfecting systems on the second-generation Heaviside prototype, including not adequately defining crash requirements and other safety specs, while trying to move forward to designing the next version of the aircraft amid rapid timelines, and that he reacted poorly to engineers who pushed him on these issues.

In a follow-up letter to management alleging retaliation, the author of the report wrote, “Damon has created a culture where disagreeing with him is harshly punished, and everyone knows this.”

Thrun says a review was conducted by an external lawyer. He declined to discuss the findings, citing employee confidentiality, but said, “Had I believed there was retaliation I would have reacted much more strongly than I did.”

 One of the female engineers who quit in April sent a letter to human resources that was shared with Forbes in which she alleged that she was not afforded the same level of respect as male colleagues and her ideas were routinely ignored. In an internal discussion of the letter that was also shared with Forbes, a female member of the company’s diversity and inclusion committee, wrote, “I’ve experienced much more poor behavior in this organization than I have in my ten-plus years of professional life. …Departure of female colleagues due to unacceptable treatment is a repeating pattern in this company.”

Thrun said an external investigation had failed to turn up any instances of discrimination based on gender, race or other status, but that the company had brought in an advisory firm to help with inclusion and company culture.

He said that Covid may have exaggerated problems with communication in the company. “We had a situation where people felt they were unfairly treated, they felt retaliated against. It’s my job as CEO to make sure this doesn’t happen, so at the end of the day it’s my fault and my responsibility.”

The turmoil comes amid criticism from some that it was exacerbated by the remoteness of Thrun, who’s also the cofounder and executive chairman of the online learning company Udacity, and who, according to former employees on the Flyer and Heaviside programs, hasn’t been seen on a daily basis around the offices over the years.

Thrun told Forbes he had taken a hands-off approach by design—but not anymore. “The way I’ve run the company in the past is a bit like an incubator where we have relatively independent teams creating independent aircraft,” he says. “But given the events of the past months where I got heavily involved in strategy and management, I’m spending every waking moment on the company.”

In 2018 it looked like Kitty Hawk was leading the way to a revolution in how we get around. It had unveiled a two-seat, battery-powered and robot-controlled eVTOL called Cora that it was test-flying in New Zealand, where it hoped to establish an air taxi service as early as this year, and it was promising to soon begin selling a one-seat aerial go-kart called Flyer intended to be flown for fun over water.

A year later, it spun off Cora into a joint venture controlled by Boeing dubbed Wisk. Last year Kitty Hawk shut down the Flyer program following safety and development problems that Forbes reported on, stating that it had failed to identify a viable market for the aircraft.

That left Kitty Hawk with Heaviside.

Thrun says with Vander Lind’s exit, he will oversee development of the next version of Heaviside, which will be the production-conforming prototype that it will seek to certify, aided by Anderson. Despite being significantly larger – it will expand in weight from roughly 900 pounds to 2,200 pounds, with 440 pounds budgeted for two passengers plus luggage – Thrun says they expect the aircraft to have the same range of roughly 100 miles plus safety reserves and a speed of 180 mph. Other eVTOL developers have promised similar range or more, but no one else to date has claimed to have flown as far.

Kitty Hawk says the current version of Heaviside is 100 times quieter in cruise than a helicopter, something that will be crucial for it to win acceptance for the construction of the many vertiports inside cities that will be needed for the air taxi network Thrun envisions to achieve his goal of switching half of trips in major cities out of cars and into more energy efficient air vehicles by 2050.

“We’ll hopefully easily be 10 times as safe given how unsafe cars are, and hopefully we’ll be five times as green,” says Thrun.

The current version of Heaviside appears indeed to have impressive energy efficiency: in a paper that has yet to be published, Carnegie Mellon engineering professor Venkat Viswanathan and his graduate student Shashank Sripad estimate that the aircraft is more efficient than an electric car with one occupant at ranges greater than 20 miles, and significantly better than the aircraft Joby and Beta are test-flying, as well as proposed designs from Germany’s Lilium and the Bay Area startup Archer Aviation, based on current battery technology.

If Kitty Hawk succeeds in convincing regulators to allow its planned aircraft to operate without pilots in the cockpit, it could have a substantial cost advantage over competitors. Piloted urban air taxis could have double the costs of autonomous ones, McKinsey consultants Uri Pelli and Robin Riedel estimated in a paper last year.

Thrun believes that with one remote pilot overseeing five aircraft in the air, Kitty Hawk’s operating cost per mile would drop below $1, making it cheaper than an Uber or Lyft ride is today.

And then there’s the question of finding and training all the pilots air taxi fleet operators will need to scale up amid expectations that retirements and airline growth are set to create a severe shortage.

To move 10% of the population of the Bay Area by eVTOL would require on the order of 50,000 aircraft, Thrun estimates, of which half have to be in the air at any one time.  

“The only way to make it meaningful for the world or for any city is to go to scale, and the only way to go to scale is to avoid human pilots,” says Thrun.  

That depends on developing autonomous systems capable of replacing pilots — and on safety regulators allowing them. With all the radical new technology being packed into eVTOL prototypes, from highly flammable battery systems to electric motors and tilting rotors, most of their developers think that’s enough complexity to ask regulators to deal with without making them robots, too. Some aerospace experts have warned for years that the FAA lacks enough software experts; the agency may be hard-pressed to effectively evaluate the safety of the complicated artificial intelligence systems that will be needed for autonomous flight.

Developing that software is a challenge that’s squarely in the wheelhouse of Thrun, who made his name by leading the Stanford team that developed a robot car that won the 2005 DARPA Grand Challenge before Google lured him away to set up its driverless car program, now known as Waymo, and then found the company’s X moonshot division. Autonomy in the mostly empty skies is generally seen as posing fewer challenges than on the road, and Thrun says Kitty Hawk is developing autonomous controls for its aircraft that will soon be fully capable of taking it safely from one point to another “on a good day.” Remote piloting technology capable of allowing a human to take over on the bad ones has been proven out by the U.S. military with drones, Thrun notes — but using it with passenger aircraft is a step beyond, and the FAA as of yet has only granted a handful of limited waivers for remote pilots to conduct unmanned drone flights in the U.S. beyond the operator’s visual line of sight.

To keep its aircraft from running into other ones, Kitty Hawk is aiming to tap into the national ground radar network used by air traffic controllers and only fly in areas with good coverage. It’s planning to test that out in Ohio in partnership with NASA; it’s also working with the Air Force’s Agility Prime program in the state to test and develop Heaviside’s remote flying capabilities for potential military use, recently conducting a simulated medical evacuation of a wounded soldier.

Kitty Hawk’s plans to commercialize Heaviside as a two-passenger vehicle put it on the small side compared to many other winged air taxi aspirants that are developing aircraft with anywhere from five to seven seats, but that may not be a disadvantage. The average number of occupants in passenger vehicles in the U.S. is 1.67, according to the Federal Highway Administration’s National Household Survey. While pooling together more passengers in larger vehicles should theoretically allow for lower costs per passenger, filling up the seats could require more waiting time on the vertiport pad, which could fritter away some of the time benefit of flying over driving that’s needed to convince commuters to take to the air, points out McKinsey’s Riedel.

Being first to market – which Kitty Hawk is unlikely to be — isn’t going to be much of an advantage, Riedel thinks, given how long it will likely take for operators to scale up and for cities and regulators to be comfortable allowing them to expand service.

The eVTOL makers with enough funding will adapt their aircraft designs as they get a better sense of what the market may be, so Riedel says he’s paying more attention to the strength of management teams and their ability to execute as an indicator of who might be winners. “Whether they have the right vehicle or not, whether they have the tech figured out is less important to me than if you have good leaders that can draw on experience in the industry, and draw on other leaders that will help them support them build a team.”