Self-driving technology startup May Mobility sees a pathway toward a highly profitable autonomous future.
Ed Olson, the company’s CEO, said he foresees a profit margin of up to 60 percent on self-driving services once human safety backups are no longer involved in monitoring vehicles.
“That’s a healthy business,” he said Wednesday, speaking at an Automotive Press Association event.
May Mobility isn’t there yet. The company only began such driverless service at its Sun City, Ariz., location in December. It operates in three other U.S. locations with human safety backups aboard. Profit margins remain in the “low single digits” with human backups still behind the wheel, Olson said.
Still, the prospect of turning a small profit contrasts with the precarious state of other business models built upon self-driving technology. Olson characterized some of them as money-losing propositions.
Toyota-backed May Mobility utilizes autonomous Toyota Sienna minivans and contracts directly with city and municipal transportation departments rather than customers. It eschews the robotaxi business model being pursued by the likes of Waymo and Cruise, the latter of which lost $3.48 billion in 2023.
“Today, that is not a good business,” Olson said of robotaxis. “Even if the technology is quite good, the economics are not.”
Rather than compete with ride-hail drivers for rock-bottom prices, May Mobility sees its competition as city buses. On average, they cost approximately $150 per hour to operate, Olson said, though that number can vary greatly by city.
That’s where autonomy presents the possibility of substantial savings to operators. “We can cherry-pick the routes that make sense for the technology today, and we can also build a business,” Olson said.
Beyond Sun City, May Mobility offers service in Grand Rapids, Minn., Ann Arbor, Mich. and Arlington, Texas.
Buoyed by a $105 million Series D funding round that closed in November, Olson said he expects the scope and number of the company’s operating locations to grow significantly by the end of this year.