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The global ride sharing market size was USD 76.48 billion in 2020 and is projected to grow from USD 84.30 billion in 2021 to USD 242.73 billion in 2028 at a Compound Annual Growth Rate (CAGR) of 16.3% in the 2021-2028 period.The global impact of COVID-19 has been unprecedented and staggering, with ride sharing witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a huge decline of -16.3% in 2020. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Ride Sharing service enables the passengers and drivers to connect by booking a ride with the help of online sites or smartphone applications. The Ride Sharing service type offers numerous advantages such as low carbon footprints, easy booking options, affordable door-to-door ride services, and no parking trouble. Additionally, the introduction of big data analytics, IoT, and AI facilitate smart riding options and the rise in the availability of cab booking services, which are the primary factors that are accelerating the global market growth. Some service providers provide several facilities, offers, and discounts on rides to reduce the expenses of daily commuters. For instance, service providers such as Uber and OLA offer monthly pass at low rates to their daily passengers. Moreover, lack of parking spaces, rising fuel prices, the increase in road traffic and congestion, and also lack of proper public transport systems have further propelled the demand for carpooling and these type of sharing services.
Ride Sharing Market to Experience a Steep Fall Amid COVID-19 Pandemic
The outbreak of COVID-19 was originally detected in Wuhan, China, and later spread across the world. The WHO declared the COVID-19 situation a pandemic disease. This coronavirus crisis condition has rigorously impacted the whole civilization and the economic conditions across the world. It has also affected the general lifestyle and the behaviour pertaining to travel, consumption of goods and services, as well as the working style of individuals.
The automotive and transportation industry has also been impacted by the pandemic situation and is facing several challenges. The sealing of borders by the governments of various regions has led to a decrease in the sales of vehicles. Also, people are diverting their significant share of investment in resolving the incurred losses and are focusing on fulfilling the necessities and utilities.
The market has gained high popularity owing to its various advantageous factors in the past few years. However, the market is expected to witness a drastic drop amid the COVID-19 pandemic. The new policies and norms imposed by the government to maintain social distancing and hygiene protocols have also affected the market. Also, the nature of the virus being active on surfaces for an extended period of time and the fear of infection raised in the minds of people has compelled them to avoid traveling. The cabs were one of the mediums of the rapid spread of the virus.
Thus, people are more likely to avoid traveling by cabs hereafter until appropriate treatment and vaccine are not available in the market. However, the market is expected to gain its share by 2021 as the service providing companies are likely to come up with additional precautions such as partition to maintain distance between the passengers and driver, installing devices to measure body temperature, and equipping the car with sanitizer to eliminate the threat of infection in the forecast period. At the same time, the ride pooling fares may see a rise owing to these additional precautionary measures.
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Rising Demand for Micro mobility to Drive the Market Growth
Micro-mobility can be termed as the ability to movement for short distances using vehicles that can accommodate only one or two people. These vehicles consist of light vehicles such as mopeds, bikes, scooters, and longboards. Shared micro-mobility is a smart option for commuters seeking a quick ride in the city without any hustle of mass transit. The idea of micro-mobility makes a huge impact on how to make use of scooters and bikes and earn from them. The rising congestions, especially in metro cities, are there is a vast scope for micro-mobility as it can over these problems. For instance, the Volkswagen Group is promoting micro-mobility as a part of its electric mobility plan. The company has introduced Cityskater and Streetmate electric scooters in Geneva. Daimler and BMW together are offering scooters on rent in more than 6 cities in Europe.
Increasing Penetration of Internet and Smartphones to Boost the Market Growth
The rapid adoption of smart devices such as smartphones, smart wearables, and the increasing use of internet data have created high opportunities for Ride Sharing services across the world, amplifying the global ride sharing market growth. Internet connectivity is the primary requirement for availing ride transport services. The users must download ride-providing applications on their smartphones using the internet to access the information and navigation of the ride. Internet connectivity is necessary for the efficient functioning of V2V communication, navigation, and telematics. Moreover, the smartphone apps provide various security features such as name, number, and photograph of the driver, vehicle number, route tracing details, and records of past rides.
Stringent Carbon Emission Norms to Drive the Market Growth
Globally, the rate of vehicular emission is continuously increasing over the years. The automotive industry has a major share in global greenhouse gas emissions. The government and private organizations and the automotive companies are taking additional efforts to curb the rising CO2 emission. Various organizations such as the International Institute for Sustainable Development of Canada, the Indian Ministry of Environment and Climate Change as well as the European Union Paris Agreement on Climate Change have set aspiring targets and norms, including expansion of the forest cover for the reduction of carbon footprints by the coming years. Therefore, these norms are likely to drive the use of these type of sharing services over private car ownership.
Resistance from the Traditional Transport Services as well as High Risk of Cyber Threat to Hamper the Market Growth
The growing penetration of Ride Sharing services across the globe is creating conflicts and disagreements between the traditional three-wheeler and taxi drivers. The ride services providers offer more advantages such as affordable doorstep pick-up and drop, complete details of the ride, and higher convenience compared to the traditional transport service providers. Therefore, taxi drivers in countries like Japan and India are opposing the ride service providers. However, the advanced features may cause a threat to the passengers. The ride service apps consist of detailed user information and the payment apps linked to these apps. Also, the real-time data of the ride is available, which creates a high risk of cybersecurity threats.
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E-Hailing Expected to Dominate the Market Due to Increasing Government Initiatives to Increase Awareness among People Regarding Air Pollution
Based on type, the market is segmented into E-hailing and station-based types. The e-hailing segment will hold a major share in the global market in 2020. E-hailing ride services provide transportation to passengers by hiring a personal driver through a contract or employment basis. Besides, the rising demand for e-hailing services owing to increasing government initiatives to raise awareness among people regarding air pollution, passenger comfort, increasing traffic congestion, and ease of booking are propelling the demand for Ride Sharing, predominantly e-hailing.
In e-hailing ride services, the rides are booked in advance and paid for through the smartphone application of the transportation network company. Uber, Ola, Lyft, and Gett are prominent players in the e-hailing ride business. For instance, Didi Chuxing, a leading ride sharing company, takes over the shares of 99, Brazil’s leading ride-hail app. The company invests in smart transportation services and AI capabilities through operations and partnerships. For instance, BMW has launched the car-sharing service ReachNow with BMW 370 series cars for short- and long-term rental and delivery services.
Inter City Segment to Hold the Largest Ride Sharing Market Share Due to the Rising Congestion in Public Transports
Based on the commute type, the market is segmented into corporate, long-distance, and intercity. The intercity segment holds the largest share of the global market. The intercity rides are between two cities. The commute comprises of a single-way tour from one city to another. Intercity rides are widely availed by the daily commuters that commute from one city to another for work purposes. With the rising congestion in public transports and fatigue occurring while driving, private vehicles create high opportunities for intercity commute rides as they offer enhanced comfort and convenience at affordable fare rates.
Android Segment Expected to Hold the Largest Market Share
Based on the application type, the market is segmented into Android, iOS, and others. In 2020, the android segment held the largest share of the global market. The Ride Sharing apps are developed using cloud computing in mobiles. The majority of the population owns an android based smartphone owing to its user-friendly nature. Therefore, several prominent ride sharing companies develop apps that are supported by the android operating system. For example, android is the leading operating system in India, with over 75% of the market share. Samsung, Xiaomi, Oppo, and Vivo are a few of the many top mobile sector players operating on the Android system.
North America Ride Sharing Market Size, 2020 (USD billion)
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The market size in North America stood at USD 35.02 billion in 2020. The region holds dominance in the global market due to the rapid development of electric cars in countries such as Canada, the United States, and Mexico. Also, the rapid adoption of technologically advanced features by the ride service providers. Uber has been rapidly expanding its business in Canada. For instance, last year, Lyft became the first company to announce the launch of green mode, providing electric car rideshare to its customers.
Moreover, the company introduced this development with the intention of the ‘Green City Initiative,’ which works on reducing the use of fossil fuels. These developments are thereby accelerating the market in this region. Europe holds the third-largest share in the global market owing to the rising partnerships between the service providers and the government to promote these type of sharing services in this region.
Further, developing and developed countries such as India, China, Indonesia, and Japan are anticipated to experience substantial growth in Asia Pacific, predominantly in urban transportation. Additionally, factors such as an augmented need to save fuel by offering a ride to colleagues and commuters heading along the same route and increasing the daily commute to workplaces in urban areas are expected to drive the Asia Pacific market.
The market is highly competitive and fragmented in nature, with the presence of key market players such as Uber Technologies Inc., Lyft, Inc., Didi Chuxing Technology Co., Bolt Technology OÜ, Gett, and GrabTaxi Holdings Pte. Ltd. These market players adopted new product launches and expansion to gain traction in the market.
DiDi Chuxing is a Top Player in the Market
DiDi Chuxing is a global leader in the mobile transportation platform. The company excels in offering app-based transportation services to more than 550 million users in Asia, Australia, and Latin America. They offer a full range of transportation services, including bus, Luxe, Taxi, designated driving, bike, and e-bike sharing and enterprise solutions. The company also collaborates with several policymakers, automotive and taxi industries by communicating and solving environmental and transportation challenges by innovating smart solutions using its AI capabilities. DiDi is continuously improving user experience and building safe and sustainable mobile transportation for a better future. Further, DiDi Chuxing comes up with the new in-app Health Guard program AI solution to verify daily vehicle disinfection, mask-wearing, and driver temperature.
An Infographic Representation of Ride Sharing Market
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The market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, types, commute types, and leading applications. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market over recent years.
Value (USD billion)
By Commute Type
By Application Type
Fortune Business Insights says that the global market size was USD 76.48 billion in 2020 and is projected to reach USD 242.73 billion by 2028.
In 2020, the North American market size stood at USD 35.02 billion.
The market is projected to grow at a CAGR of 16.3% and will exhibit steady growth in the forecast period (2021-2028).
E-hailing is expected to be the leading segment in this market during the forecast period.
Increasing penetration of the internet and smartphones to boost the market growth
Didi Chuxing is the leading player in the global market.
North America dominated the market share in 2020.
Stringent emission reduction norms are expected to drive market growth.
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