Meet the Ann Arbor Autonomous Vehicle Company Looking to Shake Things Up

January 25, 2023

Meet the Ann Arbor Autonomous Vehicle Company Looking to Shake Things Up

Ann Arbor — As some question the future of fully autonomous vehicles, one smaller Ann Arbor-based AV company is pushing forward with a different strategy to increase mobility where needed.

May Mobility, backed by Toyota Motor Corp. and other big-name corporations, plans to take the safety driver out of its AVs this year and expand outside the three cities where it’s currently operating. Unlike other AV companies, May is focused on contracting with governments and businesses instead of going directly to consumers. The strategy is less costly and the feats aren’t as extreme, but that doesn’t mean the technology isn’t capable.

“If you’re a robotaxi business, what you need to do is you basically need to boil the ocean … solve all of the technology problems, build the hardest vehicles, the most capable vehicles and deploy them in the largest quantities possible. That is a massively capital-intensive business,” May CEO Edwin Olson said in an interview. “Whereas what we’re doing is we are putting one foot in front of the other. We’ll start with smaller geo-fenced areas and grow them over time.”

Right now, May has service in Arlington, Texas; Grand Rapids, Minnesota; and Ann Arbor. The company hasn’t said where it plans to expand next.

Martin French, U.S. managing director at Berylls, a global automotive consulting group, likes May’s business-to-government (B2G) and business-to-business (B2B) approach, along with its “diverse” group of investors and says: “They’re going to be a real one to watch in 2023.”

State of the Business

French and other experts expect to see the AV space continue to cool off this year as companies realize the cost without an immediate payoff — especially in the midst of a potential recession — and the need to focus on getting more electric vehicles on the road.

“We’re going to see some interesting consolidation in that space particularly in the B2C side,” French said. But automakers, investors and consumers are still intrigued by the potential of AV tech even though the fanfare around it has died down some.

General Motors Co., for example, is still betting on Cruise LLC, the AV company in which it has a majority stake, will be a multibillion-dollar company. By the end of this decade, GM projects Cruise will bring in annual revenue of $50 billion with its commercial electric fleet of AVs. Last year, GM bought out SoftBank’s equity ownership stake in the company.

Cruise is offering driverless rides in San Francisco and expanded into Phoenix and Austin. This year “marks the beginning of our rapid scaling phase, where we plan to churn through the backlog of users waiting to use our service, ramp up our operations and start to generate meaningful revenue,” Cruise CEO Kyle Vogt said during GM’s third-quarter earnings call in October.

Meanwhile, Ford Motor Co. and Volkswagen AG announced last fall they would absorb AV company Argo AI, showing the difficulties with commercializing AV tech. Ford said it would shift its focus from Level 4 fully self-driving tech to hands-free Level 2+ and Level 3 tech.

At the time, Ford CEO Jim Farley said “fully autonomous vehicles at scale are a long way off and we won’t necessarily have to create that technology ourselves.”

Photo courtesy of The Detroit News.

Stellantis NV, which provides Chrysler Pacifica plug-in hybrid minivans to AV company Waymo LLC, in November announced it acquired Hungarian autonomous driving startup AiMotive. The transaction, said Ned Curic, Stellantis’ chief technology officer, will help to accelerate the maturity of the company’s STLA AutoDrive, the automaker’s updateable software platform focused on autonomy that will launch on vehicles starting next year. AiMotive’s simulation, data pipeline management and validation tools are the best in the business, he said.

“It’s small, it’s very inexpensive, phenomenal technology,” Curic told The Detroit News during the CES consumer electronics trade show in Las Vegas. “And we’re going to just embed that technology as part of AutoDrive. We’re not saying we’re going to get a full autonomous driving vehicle and we’re going to put up $2 billion a year or whatever it is that people are spending. … We needed to accelerate learning.”

May Mobility, founded in 2017, is moving forward with its B2G and B2B strategy. It raised $111 million in its Series C round of funding, bringing its total investment after three rounds of funding to $194 million. SoftBank, State Farm Ventures, Next Century Ventures, SAIC, Wanxiang, Karma and 10x Group are all invested in the growing company with more than 200 employees.

In 2021, May’s AV technology was incorporated on a Lexus vehicle, marking the first time it was integrated into an automaker’s platform. May has since started using Toyota’s Sienna Autono-MaaS vehicle platform and last fall launched the first Americans with Disabilities Act (ADA)-compliant AVs in Grand Rapids, Minnesota, with the Sienna.

May is working on incorporating its technology onto the Toyota e-Palette battery-electric vehicle platform, which has “an expansive and comfortable interior space with accessibility features that will enable passengers, including those in wheelchairs, to enter and exit quickly and easily,” the company says.

Olson, the co-founder of May who’s been focused on AV development for more than a decade, including at Ford, says the robotaxi business in the consumer space is “really hard … because you basically need to solve the hardest version of all of the problems all at once.”

That means simultaneously solving technology, hardware, supply chain and capital problems. Instead, May is working with cities to make the service successful.

Selling to businesses and governments is “what provides the contracts that scope the operations that provide the predictable revenues and cost structure that allow us to finance the vehicles and give us this gentle on-ramp to grow our business year over year and to provide a lower capital requirement,” Olson said.

Sam Abuelsamid, a principal research analyst at Guidehouse Insights, said “this strategy actually does make a lot of sense because the challenge with public transit, especially with traditional mass transit as we think of it, is utilization.”

But with the addition of May, municipalities can supplement services to get people to the main transit line with the AVs to “maximize the utilization of all of those different legs of the trip,” Abuelsamid said.

May’s way of getting to full autonomy is also different. Instead of telling the AV system rules to follow for how to handle situations like stopping at a yellow light, May gives the vehicle options of how to respond to each situation and lets it choose the response. This strategy allows May to have a smaller engineering team.

“Everybody’s building technology at their own rate,” Olson said. “We think that we are nipping at the heels of people who have spent 100 times as much capital as we are. We really don’t say that we’re the best today, but we do think that our trajectory will make us the best in a few years. But we’ve been very capital efficient.”

Working With May

In Arlington, Texas, May has been in operation since March 2021 through Via, an on-demand transit system, supported by a $1.7 million federal grant.

The service provided more than 28,000 rides in its first year, said Ann Foss, planning and programming manager for the city’s transportation department. The service covers one square mile that includes the downtown core and the University of Texas at Arlington campus.

“Obviously it’s added another transportation option for a population that was somewhat underserved,” Foss said. “A lot of our riders are low-income and don’t have access to a personal vehicle, so having another option available was great for the community.”

The city applied for additional funding through its local council of governments and received $4.5 million for two more years of service from May. Partners, including the university, will contribute an additional $1 million, Foss said. The service will add Siennas with wheelchair accessibility.

Photo courtesy of The Detroit News.

“The goal, as the technology progresses, is that if we can remove the human operator, there’s some cost savings there,” Foss said. “We also think that there is potential for a lot of safety improvements with the autonomous vehicle technology, so there’s a number of different benefits that we’re anticipating.”

May plans to grow into larger markets like the ones where some of its competitors are established, but it’s focused on helping cities with a need for additional public transit options.

“If you’re in a high-demand density area, that bus can be effective, but in lower-demand density areas, you need a mix of different kinds of transportation solutions, and that’s where we see a tremendous opportunity,” Olson said.

Investors may question why the company is dedicated to keeping its headquarters in Michigan despite the tech mecca being out in the Bay Area, but Olson says the location has been a benefit with its proximity to the auto supply chain and tech talent.

“We made a very deliberate decision to stay in southeast Michigan,” he said. “In southeast Michigan, there’s a huge amount of talent, but May Mobility is really able to attract the best talent from the entire Midwest area. So it has been a fantastic recruiting benefit to us.”

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Meet the Ann Arbor Autonomous Vehicle Company Looking to Shake Things Up

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