Ride-hailing market is estimated to be valued at USD 160.09 Bn in 2024, exhibiting a CAGR of 13.3% over the forecast period 2024-2031. Global ride-hailing market is estimated to witness high growth, owing to growing urban population and rising smartphone penetration. Growing urban population globally boosts demand for affordable mobility solutions and rising smartphone penetration enables more consumers to access ride-hailing services conveniently through mobile applications.
Market Dynamics:
Growth in urban population: Rapid urbanization around the world has led to increase in urban dwellers globally. It is estimated that around 68% of the total population will live in urban areas by 2050. This growing urban population boosts demand for affordable mobility solutions like ride-hailing services.
Easy access through smartphones: Widespread adoption of smartphones among consumers has made ride-hailing services easily accessible through dedicated mobile applications. Users can book a ride with just a few taps on their phones. The convenience of digital payment options has also boosted the popularity of ride-hailing platforms. Rising smartphone ownership particularly in developing nations is expected to drive the growth of ride-hailing market.
Market Driver: Growing urbanization boosts demand for convenient transportation solutions
One of the major drivers for the growth of ride-hailing market is increasing urbanization across the world. More people are migrating to cities in search of better lifestyle and job opportunities. However, urban areas often struggle with infrastructure challenges like traffic congestion and lack of quality public transportation, thus, ride-hailing services have emerged as a convenient alternative to overcome these issues. People can book a cab with just a few taps on their smartphones and get door-to-door transportation. This ease of use has made on-demand ride services extremely popular among urban populations. As urbanization continues globally, more and more people will adopt ride-hailing to fulfill their daily transportation needs.
Market Driver: Rising internet and smartphone penetration enables access to ride-hailing apps
Another key driver for the market growth is rising internet and smartphone penetration worldwide. Access to fast and reliable internet as well as affordable smartphones has enabled millions of people to use on-demand apps. Ride-hailing companies launches user-friendly apps that can be easily accessed from any location. This has significantly lowered the entry barriers for users who want to book a ride on their phones. Many developing nations are still witnessing growth in internet and mobile subscriptions. As connectivity improves in these markets, their potential user base for ride-hailing will expand rapidly. The widespread adoption of smartphones boosts demand for app-based transportation services globally.
Market Restraint: Stringent regulations increase operating costs for ride-hailing companies
One major restraint for ride-hailing market is the stringent regulations imposed by authorities. As this sector emerged disruptively, many countries introduced laws to regulate operations of transportation network companies. This includes obtaining licenses, complying with vehicle standards, conducting background checks on drivers and maintaining service quality benchmarks. While these regulations aim to prioritize commuter safety, it significantly drive up operational costs for companies. Complying with rules across different city jurisdictions also poses administrative challenges. Big expenses to follow all the rules can cut into how much money a company makes and make it harder for the company to keep growing.
Market Restraint: Established taxi industry lobbies against ride-hailing competition
Traditional taxi operators, who were used to operate in non-competitive environments, view ride-hailing services as a threat. These have lobbied hard with local governments against the new entrants, citing concerns around traffic and lost incomes. In some regions, powerful taxi unions have staged strikes and protested against apps like Uber and Lyft. The conflict between old and new transportation models has led to various legal issues and operational roadblocks for ride-hailing firms. Defending against When people fight against us, we have to spend time and money dealing with it instead of making our services better. And because taxi companies in big cities fight back, our plans to grow bigger get slowed down.
Market Opportunity: Collaborations with public transport create multi-modal commuting options
One significant opportunity for ride-hailing providers is via partnerships with public transport authorities. Integrating first-mile and last-mile solutions with bus/metro networks can establish multi-modal commute options. For instance, commuters could use Uber or Ola to reach the nearest transit station and then avail main transportation line. Such collaborative models offer customers seamless inter-city travel while improving overall transport infrastructure utilization. Several global cities are actively working with rideshare companies to build out integrated mobility ecosystems. These partnerships will expand service coverage as well as passenger base for on-demand providers.
Market Opportunity: Growth of shared mobility-as-a-service market
Rise of the sharing economy presents another major opportunity. Customers are increasingly preferring affordable shared transportation alternatives over private vehicle ownership. Ride-hailing companies are well-positioned to capture this shared mobility-as-a-service market demand. Innovations like vehicle sharing, micro-transit and renting have allowed them to offer comprehensive solutions beyond just point-to-point rides. Bundling of multi-modal options through digital platforms will help providers consolidate their role as mobility service managers. With proper investment in diversified shared services, they can unlock new revenue streams and revenue pools globally.
Link: https://www.coherentmarketinsights.com/market-insight/ride-hailing-market-5446
Key Developments:
- In June 2022, Grab Holdings Limited is a company that provides various services like transportation, food delivery, and payment solutions primarily in Southeast Asia. is a company that provides various services like transportation, food delivery, and payment solutions primarily in Southeast Asia. started GrabMaps, a new part of its business that will offer better maps and location services to customers in Southeast Asia, including Vietnam. As more people are living in cities, new companies are joining the market, and people want easier ways to get around, the demand for ride-hailing services in the Asia-Pacific area is expected to grow quickly in the next few years.
- In June 2023, TADA, a South Korea-based ride-hailing app, introduced an English version of its app to make it easier for international users. Now, when a friend or someone else uses the "call for me" feature, the user will get text messages in English about the TADA vehicle's status or where it is.
- In March 2023, Uber is a company that offers ride-hailing services and other transportation solutions worldwide. expanded its Comfort Electric service that offers premium electric vehicles, to 14 new areas in the U.S. and Canada. This move supports Uber's goal to have zero-emission rides in the U.S., Canada, and Europe by 2030. Luxury electric vehicles like Tesla models S, 3, X, and Y, Polestar 2, Ford Mustang Mach-E, Audi e-Tron, Porsche Taycan, and Hyundai Ioniq are included in this service.
Key Players:
Uber, Didi Chuxing, Grab, Bolt, Lyft, Ola Cabs, Taxi, Careem, Gojek, 99, Bitaksi, Cabify, FreeNow, Ola Electric, InDriver, DiDi Mobility, Ruta 66, Beat, ViaVan, Swvl
