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Learn moreInvestors eager to buy into the futuristic vision of profitable driverless vehicles will get their chance soon. May Mobility is aiming to become the first U.S. publicly listed pure-play option for an autonomous ride-hailing technology company. It is poised to go public through a special purpose acquisition company (SPAC), merging with ACP Holdings Acquisition (NASDAQ: ACGC) that values the combined company at roughly $1.4 billion.
It's expected to operate as May Mobility. trading on the Nasdaq exchange under MAY. But before investors get too excited, let's pump the brakes and take a look at the details.
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Opportunity knocks
It's easy for investors to get excited about the opportunity, but many might not be aware of the potential market size or growth prospects. The global robotaxi market is projected to reach about $415 billion by 2035, with the U.S. accounting for a roughly $48 billion slice of that pie. The fleet of U.S. commercial autonomous vehicles (AVs) is projected to expand from only about 4,000 vehicles currently to around 35,000 by 2030 -- or about 8% of the ride-sharing market.
A year ago this month, Bank of America projected that the long-term U.S. total addressable market (TAM) for AV ride-hailing is a trillion-dollar opportunity as companies such as May Mobility aim to replace the drivers that take roughly 70% of every fare. It's also important for investors to realize how early in the game this is: Alphabet's Waymo, with an estimated $350 million in annualized revenue, would represent only about 0.5% of U.S. ride-hailing bookings.
The opportunity is potentially lucrative, albeit still very early in the game. So, what makes May Mobility intriguing?
An asset-light transition
May Mobility is moving to an asset-light model. At the company's initial U.S. ride-hailing launch site, it estimates the costs for the safety driver; vehicles (financing, depreciation, insurance, maintenance); site operations (fuel/charging, depot operations, and staff); and remote vehicle supervisors, software maintenance, and field engineers. In this asset-heavy scenario, May Mobility's projections put its annual revenue per vehicle between $130,000 to $150,000, as it keeps all the revenue. But because it also incurs all the costs, it checks in with a negative gross margin per vehicle with a safety driver.
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