AV startup May Mobility launches fully driverless service in Arizona

Tired of waiting for the bus?

May Mobility wants to help solve the lack of reliable public transit in many US cities. The Ann Arbor, Michigan-based AV startup just took a leap forward on this mission, commencing “rider-only” service in Sun City, Arizona.

The company has been running in Sun City with safety operators in its vehicles since April 2023; now, the service is going fully driverless. Initially, a group of “early riders” will have the option to request pickup from locations like grocery stores and pharmacies by one of May’s autonomous Toyota Sienna minivans, free of charge, with plans to expand in the future. The startup’s microtransit model contrasts with the approach of competitors like Cruise, which faced a series of setbacks in its attempts to commercialize a driverless rideshare service.

May Mobility CEO and co-founder Edwin Olson spoke to Tech Brew about the significance of this milestone, why he thinks May Mobility (which has more than $300 million in venture-capital funding) will beat out other AV companies to reach profitability, and the startup’s vision to improve urban spaces.

This conversation has been edited for length and clarity.

Can you start at a high level and give me an overview of May Mobility?

May was founded about 2017, but with a pretty different view toward how to build an AV business than what we’re seeing a lot in the marketplace. Robotaxi is a really hard business. The revenues really aren’t that great. You’re competing with individual Uber drivers. And the cost of launching that business is incredibly high, because of the critical mass effects that you have to achieve in terms of scope, number of vehicles, and things like that. This has really been a pain point throughout the AV industry that’s led to a lot of the news that we have seen. What May does that’s fundamentally different here in the go-to-market strategy is that we are selling long-term contracts to municipalities and businesses.

So basically, a city might have bus route 22A, and we look at that geofenced area and we say, “Yeah, we can help you…provide better transit to your residents.” And the pain point that we’re solving is that in a huge part of North America, public transit is buses. And those buses are driving around empty almost all of the time. And those buses are also super expensive—about $150 an hour to operate. So the revenue potential here is really high. And it’s got this gentle on-ramp built into the structure. Cities are used to thinking about transit on the scale of one geofenced area, like one bus service area at a time. So we can scale from one geofenced service area to the next one to the next one.

This provides a couple huge advantages: I think we’re the only AV company that actually makes money by operating AVs, which is a good thing. And we have this very gentle on-ramp; it’s very capital-efficient…And that is driven in large part because we have a very different technology stack.

I think a lot of AV companies today are sort of playing the game of, “Let’s hire a really big team. Let’s go and catalog all of the edge cases that a vehicle might encounter, and when we get them all, we’re done.” And I think what we’ve seen is, that doesn’t actually work. There isn’t really ever a done when your goal is to collect all the edge cases.

So we have some technology, Multi-Policy Decision Making…The short version is that we don’t tell the vehicle what to do. There’s a tournament being run on the vehicle that plays against about 16 little miniature driving stacks…The winner of that tournament is actually what gets to control the vehicle. And this has a massive advantage in that it allows us to expand our [operational design domain] in a very engineer-efficient way and saves us a lot of dollars at the same time. So our entire autonomy team is about 50 engineers. And we’re now at this really huge inflection point, from both a technical and regulatory partnership perspective, of launching without safety drivers.

What’s the significance of the launch of driverless services for your business?

[Operating without a driver] involves a lot of technical progress. But one of the things that doesn’t get a lot of attention…is that launching this service is actually about a whole lot more than technology. It’s about the regulations, insurance, the policies, and getting all those pieces together. A lot has to come together to bring a service like this into fruition. Our strategy here is to start small, start simple, but to hit it out of the park and to be able to expand and scale this and other deployments over time.

Where do you have operations?

Overall, May Mobility is about 300 people. Most of those are in Ann Arbor; that’s our headquarters. We have four live operational sites. And these illustrate the go-to-market strategy in a couple different ways.

Ann Arbor is very complex—college town, crazy drivers, lots of weather. It’s really a gauntlet for developing and building this technology under really adverse conditions. And we love it there.

Arlington, Texas, is a really interesting city. They’re a city very much on the edge of microtransit. They do not operate traditional buses anymore at all; they’re all-in on microtransit. And we provide service there in the downtown district.

The other end of the spectrum, we have Grand Rapids, Minnesota, which is a super rural area. And they can’t operate buses either because the population density isn’t high enough to make a bus route make a lot of sense. So we operate a fleet of vehicles there. We cover most of the city with 70 pickup and drop-off locations. It’s just a massive, massive deployment.

And then Sun City, Arizona, where we will be deploying here. And this is another use case yet, where we are focused mostly on people who might be older, might not have access to vehicles, maybe aren’t comfortable driving, or maybe shouldn’t be driving. And the upside for us is that we take the social mission and social impact of autonomy incredibly seriously—that is what fires us up. And being able to help people go and maintain a high quality of life even while they’re older and not able to drive themselves is great.

What impact does it have on your business, if any, when there is so much attention and scrutiny on robotaxis and how that use case is developing?

There are two sides to that. One of them is technology and the other is data and transparency.

One key thing to know about our go-to-market strategy is that we are able to take more bite-size steps. We don’t need to hit this huge critical mass where, all of a sudden, we’re taking on all of San Francisco—that is really hard to do. So having this more bite-sized, systematic, step-by-step approach helps us be really responsible and bring everyone along the journey with us so that they understand what’s going on.

And that leads into the data and transparency. I don’t know any of the actual details behind Cruise, but I think the public perception is that they weren’t entirely transparent. And I think what we see in the robotaxi space is a really heightened sensitivity around the value of their information and a sense of secrecy in general.

But things are really flipped around in our go-to-market strategy. We don’t see the regulators as the people that we need to navigate; we see the regulators as our customers. It is the cities themselves that are buying our services. And so it creates an entirely different set of incentives…One of the things I love about this go-to-market strategy is that instead of having this almost adversarial relationship that you might have with the city otherwise, we’re on the same side of the table. We’re deploying our vehicles in cooperation with them, under contract by them, sharing our data with them. That’s one of the reasons that we’re able to bring those partners along with us on the ride.

How do you see May Mobility fitting in and trying to enhance the transit experience for the markets where you operate?

The vision of the company is to transform cities, to fundamentally change the way that people live and get around. And really, the barrier in many cases is personal car ownership. Affluent people are bringing their personally owned cars into the downtown districts, which adds to congestion. They have to park their vehicles, which means bad land use in terms of big parking structures that take up space that could otherwise be green space or affordable housing or cool restaurants, or really anything but parking would be better.

At the same time, because they’re bringing their personally owned vehicles into the downtown district, they’re actually choking out and cannibalizing the demand for public transit. So our goal is to work with public transit to elevate public transit quality so high that everybody chooses to use public transit—those who might otherwise bring their personally owned vehicle into the district, but also those people who don’t own a car…This is a place where elevating the quality of public transit creates a huge social good for everyone who lives in a city.

What is your pitch to the municipalities themselves about why they should invest in this technology?

The key thing is, they’re coming to us because they have these pain points. They have buses. The buses are super expensive, and they’re not happy with them. The problem is that in so many places in the United States, a bus is just not a good solution to the transit problem. And it’s not that they’re dumb; they just don’t have better tools.

So our view is, “Hey, where you’ve got a subway that works or you’ve got the bus that works, for goodness sake, keep it. But where you have these transportation problems—you’re not able to provide the access, the convenience, or the equity, or the accessibility to disabled [individuals]—maybe a smaller form factor vehicle is the solution.” And when you are talking about a bus that’s on a fixed route that’s carrying almost nobody, a smaller vehicle is a great solution because we can literally drive circles around that bus on that fixed route, reduce the average wait time for riders, reduce the trip time, and attract new people into public transit.

In one of our previous deployments, in Grand Rapids, Michigan, we did a survey, and 25% of our riders had never used public transit before. And that is enormous. That is exactly what public transit agencies are looking for: Can we pull new people into the public transit system by elevating performance and reliability? And that is what we do. That is our secret sauce.

How do you think about being transparent, building trust, and assuring users that this technology is safe for them to use?

It really is moving step-by-step and being transparent. The go-to-market strategy doesn’t require us to suddenly show up in San Francisco with 1,000 vehicles. We can bite off these little geofenced areas one at a time and bring everybody along. The first time you deploy this technology, people are going to have questions. But how do you build that comfort, that we’re doing things right, that we’re moving systematically? And I think this is one where we’ve done really well by working with the city partners and with the first responders. We have orientations and frequent meetings with all of them. They know what to do if there is an incident. They know how we respond. We’re all holding hands and doing this together. And again, this works because the incentives are totally different. The customer is the city in most cases, so of course we’re going to work with them very closely.

Where are you at in your funding journey and what are you encountering right now in terms of the funding environment?

The happy news is…we had our first closing for a Series D, bringing in about $105 million, which in this market makes us really happy. But I think what you’re getting at is, it is a tough capital market. Broadly speaking, what we’re seeing in the investor space is a real skepticism about capital-intensive businesses. Even if you can get this raise done, if you have a business that’s going to require $5 billion of capital, then they’re wondering, “Are you going to be able to get that $5 billion of capital?” And if you can’t, does that mean that my investment today is gonna go to zero? So it’s not just about, how much capital do you need today? Investors are looking very strongly at: What are the total capital requirements to profitability? And I think this is where a lot of AV companies are really struggling.

What is your timeline to profitability?

My prediction is that we will be the first profitable AV company.

What are you most optimistic about right now, for May and for the AV sector generally?

May is now about six-and-a-half years old. And I spent several hours in the vehicle this week, and it’s just an amazing experience to see the dream come to be. We’ve been operating with safety drivers, providing useful transit to our customers, but taking the safety driver out is really what an autonomy company is about. So this is really an exciting inflection point for us that is going to power our growth moving forward. And we have a tremendous commercial pipeline…You have your spread of early adopters and late adopters. But when you start to have positive impacts with those early adopters, it turns out all the cities nearby say, “Hey, I want what they have.” So our traction over the last few years has really snowballed into a massive pipeline. And now we’re in a position where we can, between the Series D and this technical milestone, start to expand into those areas.

You’re not going to see a switch flip. It’s not like tomorrow we’re going to be all safety driver-free. In fact, we have a very deliberate, gradual transition where, route-by-route, geofenced area by geofenced area, we will flip them over as the validation work approves that. But…we’re turning on this safety-driver-free deployment for the first time. It’s really the beginning of the new phase.

What are the biggest challenges in the sector that are keeping you up at night?

One of the biggest challenges is that there is so much demand that we are trying to figure out how to scale and how to use the capital that we have in the most efficient way that we can. The capital markets are still tight, and this is where my focus is most focused on: How do we optimize that path to profitability? And that means not just hiring another 500 engineers, but really finding the right growth curve that allows us to grow, yes, but to scale our commercial activity commensurately.

What are some tech innovations that you’re excited about?

What you’ll see are more and more vehicles operating. We’ll be expanding into more complicated areas, first with safety drivers and then transitioning at the other end of the spectrum into safety-driver-free deployments. So you’ll see expansions on both sides. Think of it almost like the pointy edge of the spear, where we’re challenging the system, collecting really valuable data with safety drivers, and then, at the really validated end of the spectrum, turning those into safety-driver-free deployments. You’ll see the total number of vehicles growing quite rapidly as well.