German driverless car startup Vay, which rolled out its first commercial service in Las Vegas in January 2024, has raised €34m in debt from the European Investment Bank to build out its service in Europe.
Regulators in the region have so far been slower to create a clear regulatory framework for remote driving technology compared to in the US, where in states like Nevada driverless cars have regulatory approval.
“In Las Vegas, we can grow at our own pace and in our own time without always having to go back to the regulators. In Europe […] you have certain service areas, and you test that and go back to the regulator, and so on,” says Vay cofounder Thomas von der Ohe. “Europe has more uncertainties from a business perspective.”
However, von der Ohe adds that there are positive signals from some cities in Europe that they would be open to having driverless cars on their streets some time soon.
Vay’s service
Von der Ohe is quick to clarify the distinction between Vay’s tech and autonomous vehicles like robotaxis: Vay can instead be thought of as a mixture between ride hailing and car rental.
Users order a “teledriven” electric car from Vay, which arrives at their chosen pick up point driven by a person operating the car remotely. The user then drives to their destination, at which point they return the car to the teleoperator who goes and parks it for them.
In addition to delivering your car to you and parking it, the teledriver can also drive you home. Users are charged per minute; there’s also a ‘stopover’ feature which stops the charging meter if, for example, you’re parked at a supermarket while shopping.
“One of the big benefits of remote driving is that there’s always a person in control and that just creates a lot of trust in the service, because that means that a human […] can still handle (a situation) and act accordingly because they’re a human and not a computer,” says von der Ohe.
“So our overall technology creates a lot of trust with users, but also with regulatory bodies, because of this human aspect,” he adds.
Since rolling out its service in Las Vegas in January, 4,200 trips have been taken; Vay says this figure is increasing by about 20% per month.
Vay has 20 cars in its fleet and has expanded its operating area to cover 25% of the metropolitan area of Las Vegas — an area twice as large as San Francisco.
New cities
Hamburg could be among the first cities in Europe to see Vay’s driverless cars on the road , but the company is still waiting for regulatory details to be ironed out and can’t give specific information on when exactly that could happen.
In 2023, Vay conducted test drives on public roads there without a safety driver, and continues to “collaborate closely” with German authorities to commercially launch the service in the city, the company says.
Vay also plans to roll out its service in Belgium, where it already has a partnership with Poppy, a car sharing service and Ush, a Belgian operator of driverless vehicles.
In the US, Vay is in talks with six additional states — which the company declined to name — about the possibility of rolling out its service there.
The company has also set its sights on getting “even more customers and vehicles on the streets” in Las Vegas, says von der Ohe.
“The business requires 300 vehicles on the streets to get enough density in the city to get that entire flywheel going, so that it can be a profitable business,” he says.
Expanding its fleet is also necessary as the company currently has “supply challenges”, meaning a scenario where a customer opens the app and all 20 of Vay’s cars are already booked.
The business opportunity
According to a recent McKinsey report, consumer interest in remote driving is growing — and, while the tech is still in its early days, it could be a big business opportunity.
Remote driving technology could, for example, be incorporated into cars and turned on or off at a driver’s convenience, for example when they’re sitting in traffic or looking for a parking space, the report said.
Von der Ohe says Vay wants to focus on developing more B2B partnerships, for example by integrating teledriving into car share and car rental providers, public transport and luxury private car services, such as remote chauffeurs who can take people to and from airports or back and forth to restaurants.
Looking ahead, the most important thing for Vay is receiving “regulatory clarity” in Europe to roll out its services at scale, says von der Ohe.
“It would just allow us to say, ‘Okay, we now have less risk of not being able to grow because of regulatory hurdles’.”
The company has so far raised $109m to date from investors such as Coatue Management, Atomico, La Famiglia and Visionaries Club and has not ruled out raising further equity in the future.
EIB support
Vay sees itself as being part of the solution to bring more sustainable mobility to Europe, which is also part of the reason why it believes the EIB wanted to support it.
“The other big part is (being able to) build worldwide, unique deeptech that this time comes out of Europe for the world and not vice versa, instead of playing catch-up games with the US or China.”
The EIB loan is supported by its InvestEU programme which has also backed companies such as Sunfire, which develops electrolysers for green hydrogen production and Gropyus, a company specialising in creating affordable and sustainable timber-hybrid buildings, which raised €100m earlier this month.
Read the orginal article: https://sifted.eu/articles/vay-remote-driving-startup-loan-news/
