Ride-Hailing and Taxi Market

Market Overview

The global ride-hailing and taxi market size was valued at USD 196.05 billion in 2021 and is projected to reach USD 515.49 billion by 2030 at a CAGR of 11.34% from 2022 to 2030.

Sharing a ride with another person, particularly one travelling in the same direction, is referred to as "ride-hailing." It can be used by numerous passengers on a sharing basis. For riders and drivers to find and connect with one another in order to use these ride-share services, a middleman typically provides an app. In a process known as e-hailing, a passenger can reserve a shared trip by calling and texting, visiting the service provider in person, or using a smartphone app or website. The route can be pre-determined by the passenger, and they can reserve or rent a taxi or cab for that route. The typical types of vehicles utilised for ride-sharing services include passenger cars, motorcycles, scooters, minivans, vans, buses & coaches, and auto rickshaws.

Over the past several years, the market for ride-sharing has grown in popularity as businesses strive to make transportation more effective, practical, affordable, and comfortable. The main objectives of these services are to reduce traffic, emissions, and car trips.

The idea of "mobility as a service" has become more prevalent in light of the possibility of self-driving cars, which are predicted to reduce the cost of ride-hailing services (MaaS) significantly. To make financing the purchase of an automobile easier and less expensive, banks and other lenders have also decreased their interest rates. By improving passenger comfort and safety, fleets of automated vehicles enable businesses to improve their services. 

Market Dynamics

Drivers for the Global Ride-Hailing And Taxi Market

• Huge Cost Involved In Vehicle Ownership Is Driving the Market

Finance, fuel, upkeep, registration/taxes, maintenance & repair, and depreciation are just a few of the aspects that go into vehicle ownership. Owning a car costs more and more money every year. Although depreciation accounts for 43% of the cost of ownership, the American Automobile Association (AAA) estimates that other costs, including fuel and maintenance, account for 25% of the total. The cost of fuel and maintenance has multiplied in recent years, and the same trend is predicted to continue unabated. The possession of a car has shifted from being a benefit to being more of a problem as cities become increasingly congested with people and vehicles. The average cost to own and operate a new car rose by $279 in 2020 compared to 2019 to reach $9,561.

The rate of car ownership among those between the ages of 18 and 35 has decreased over time as a result of the millennial generation's minimal to nonexistent interest in having a vehicle. Among other things, the rise of online shopping and the lack of connectivity of public transportation in major cities are other factors contributing to the reduction in car ownership.

• An Increasing Demand For Pool Services Is Driving The Market

The key element influencing the expansion of ride-sharing services is the significant increase in commuters' choice of carpool and bike pool services. Consumers are being encouraged to adopt ride-sharing services due to the expansion of the services provided by the major market participants, such as Uber and Ola, as well as the ability to select convenient pick-up and drop-off locations. The demand for ride-sharing is also being fueled by a considerable increase in the number of different ride-sharing services, including intercity ride-sharing, bus-sharing, bike-sharing, and even auto-sharing services for short-distance travel. Additionally, compared to traditional transportation service providers, ride-sharing service providers offer benefits such as affordable pick-up and drop-off, co-passenger information, affordable ride costs, and better convenience. In order to lower the costs of everyday commuters, many service providers also give a variety of amenities, incentives, and discounts, such as a monthly pass on shared transportation. As a result, the surge in demand for carpooling and bike-sharing services together fuels the expansion of the ride-sharing industry.

Restraints for the Global Ride-Hailing And Taxi Market

• Stringent Regulations Hamper The Market

The use of app-based mobility services is frequently unregulated by a legislative body in several nations. As a result, the government does not define or control how they operate. Separate licences and registrations are needed for taxi services. The fact that many app-based businesses do not own vehicles makes it challenging for taxi services to function.

In order to collect, use, transfer, secure, store, and otherwise process personally identifiable information and other data about individuals, regulators around the world have proposed or adopted requirements. The number of these laws, as well as the severity of their fines and other penalties, are growing. It is challenging for an app-based taxi fleet that offers ride-sharing services to operate under strict restrictions relating to vehicle registration and licences. This has hampered the expansion of ride-sharing businesses in numerous nations and areas.

Opportunities for the Global Ride-Hailing And Taxi Market

• Micro-Mobility Will Bring In New Opportunities For The Market

Numerous cars that hold one or two persons are referred to as micromobility. For anyone who wants to go around a city fast and without the hassles of public transit, shared micro-mobility is a wise choice. There is an increasing need for door-to-door mobility choices that can address these issues as urban traffic congestion and the demand for social isolation rise. Shared dockless bikes, e-bikes, and e-scooters can be used in different lanes and are carbon-neutral and subsidy-free. They are also more accident-resistant.

The use of micromobility is anticipated to rise in the next years due to rising demand and affordability. For instance, only 50 to 60% of all car trips in the US are more than five miles, indicating that micro-mobility has the potential to replace a significant amount of the annual miles driven by vehicles. Whereas, in May 2020, the city recorded a 67% rise in the use of New York's Citi Bike bike-sharing programme, according to the city's Department of Transportation.

• Emerging Autonomous vehicles in the country

The development of autonomous vehicles is still in its early stages. Working prototypes from many OEMs are being tested in various locations. Many businesses are vying to be the first to market with entirely autonomous vehicles. Lyft, Ford, Uber, Honda, Toyota, and Tesla are a few of these. As it prepares to begin its commercial ride-sharing services in Phoenix this year, Waymo, the autonomous car business of Alphabet, Google's parent company, has started testing trip pricing with some of its early customers. These facts suggest that the development of autonomous vehicles will dominate the ride-sharing sector in the following 6-7 years.

Regional Analysis

The region with the most revenue share in 2021 was the Asia Pacific. In 2021, the Asia Pacific region's revenue share of the overall market was over 55%. This significant market share is attributed to the area, which is home to 60% of the world's population, particularly the massive populations of China and India. This creates the area with the greatest concentration of workers on the entire planet. A significant portion of global ridership for on-demand transportation services, such as ride-hailing and taxis, has also been growing in the region. New metro areas with dense populations are developing in the area as a result of the economic boom, which has a substantial impact on the local market.

The market in Central and South America is anticipated to expand significantly during the forecast period. From 2022 to 2030, the CAGR for CSA is predicted to be 11.6%, placing it second in the market. Brazil, Colombia, and Mexico's growing middle classes are fueling regional market expansion. The expansion of internet service and smartphone connections in the area also contribute to the market's growth. Additionally, a number of businesses, like Uber, Beat, Cabify, and DiDI, are growing their presence in other nations in the area, driving the market's expansion. For instance, DiDi declared in June 2019 that it intended to expand in Chile and Colombia in order to more than double its regional footprint.

In 2022, North America held a 35.9% market share for ride-hailing services. Most of the gross income that U.S. ride-hailing service providers earn comes from reservations made for travel in major cities, including trips to and from airports. Uber, a market leader worldwide for ride-hailing services, completes 14 million separate journeys daily in the U.S. (or 65% of the market).

Segmental Analysis

This ride-hailing and taxi market can be segmented on the basis of types, distribution channels, regions and competitors. In 2021, the taxi category by type held the majority of the market share for ride-hailing & taxis worldwide. In 2021, the taxi industry commanded a revenue share of more than 75% of the market. The use of taxi services, which can be reserved over the phone or using a taxi app, is a crucial aspect of public transit. Taxi services have been in business for a lot longer than ride-hailing firms have in the international market. The larger market share in the global market is attributed to a large number of taxi operators as well as the widespread accessibility of taxi services around the globe. The rise in popularity of the ride-hailing business model, however, is upending the taxi industry.

According to distribution channels, the offline market sector had the largest revenue share worldwide. In 2021, the offline sector accounted for over 60% of market revenue. The large number of operators providing offline channels for booking a ride and consumer behaviour is responsible for the segment's larger market share globally. Booking a ride through travel agencies or over the phone with taxi and transportation network businesses has traditionally been done through offline methods.

Online

The demand for online techniques is driven by increasing internet adoption. Online cab services are becoming increasingly popular due to high-speed internet accessibility and the simplicity of using online services. According to Internet World Stats, the number of internet users climbed from 4,208 million to 4,833 million in June 2020. In addition, it is anticipated that the number of internet users in India will increase from 636.73 million in 2019 to 974.86 million by the end of 2025. The need for online services is fueled by the fact that an increasing number of internet users with smartphones now have access to taxi services that provide the driver's information and location while also benefiting the user.

Recent Developments

• In February 2022, Uber announced the introduction of Uber Explore, a new feature in the Uber app that will enable users to browse and reserve experiences, such as dinner reservations, live events, and other entertainment endeavors.
• In January 2023, E-bike testing will begin in Bray and Wexford Town under Bolt.
• In August 2022, Bolt On Technology Announced Partnership with Hutson.