WASHINGTON—The U.S. Transportation Department’s Office of Inspector General said on Monday it will review progress by regulators in establishing the basis for certifying lower-altitude aircraft known as “flying taxis.” While interest in Urban Air Mobility, or highly automated aircraft that can be used for passengers and cargo and are designed to operate in populated areas, has grown substantially, it creates “new and complex safety challenges” for the Federal Aviation Administration (FAA), which is currently reviewing applications for certifying eVTOL aircraft, the watchdog said. The sector includes electric vertical takeoff and landing, or eVTOL, aircraft, which use electrical propulsion to take off, hover, and land vertically. The aircraft typically carry only a few passengers per pilot. The FAA said it “will cooperate fully with the Office of the Inspector General’s audit and looks forward to providing information about our extensive safety work in this area.” In highlighting the challenges for the …