Market Trends of Ride-Hailing Industry
This section covers the major market trends shaping the Ride-Hailing Market according to our research experts:
Rising Demand for Ride-Hailing Services
Ride-hailing is anticipated to takeover the conventionall taxi over the forecast period. According to some surveys, a total of 15 million ride-hailing trips happen each day, which is expected to gigantically increase and hit a 100 million mark, by 2030.
In December 2020, EU's top court ruled that ride-hailing apps that put passengers directly in touch with taxi drivers and do not provide a crucial part of the transport service are online platforms. The ruling from the Court of Justice of the European Union amounts to a victory for ride-hailing apps, namely Uber, which have so far been regulated as taxi companies. It opens an opportunity for them to seek greater freedom from regulation in the EU, if they can prove they are platforms.
Several ride hailing companies are raising funds from investors with an aim to improve their technology and provide better services to its customers. For instance,
- In December 2020, Estonian ride-hailing firm Bolt raised EUR 150 million (USD 182 million) in a funding round led by D1 Capital Partners. The company said it will use the money to develop driver face verification and use machine learning to prevent potential incidents. The firm’s app now counts more than 50 million users in over 40 countries across Europe and Africa.
- In November 2020, Meru cabs announced that they are planning to raise USD 54.25 million (INR 400 Crore) from private equity funds. The fundraising plan comes at a time when the company is sharpening focus on providing cabs to corporates and expanding its base of electric vehicles in India.
Asia-Pacific is the Largest Market in 2020
Asia-Pacific captured a major share of the market, accounting for 43.83% of the global ride hailing market, in 2020. Increasing traffic congestion and low taxi fare, when compared to other modes of transportation, are the major factors driving the growth of the motorcycle/bike ride hailing service in the Asia-Pacific region.
Owing to the fact that 60% of world population is resident in the region, the ride hailing market in the region is bigget and is growing with high rate.
India is the second-most populous country in the world, and most of the people fall under the middle-class category who utilize cabs and auto-rickshaws (local three-wheeler taxis) for commuting short distances.
In November 2020, the Government of India issued fresh guidelines for cab aggregators, like Ola and Uber, to bring them under regulatory framework. The new norms, as per the Motor Vehicle Aggregator Guidelines 2020, mandated a cap on surge price, preventing ride-hailing companies from charging more than 1.5 times of the base fare. The new rules also allow companies to offer pooling services on private vehicles, but with a daily limit of four intra-city rides and two inter-city rides per week.
Ride-hailing Marketcompanies active in China are providing subsidies to their drivers so that there is no disruption in daily bookings, For instance, in September 2020, as the National Day Holiday overlaps with the Mid-Autumn Festival, many Didi Chuxing drivers opted for an early leave. In order to encourage more drivers to take orders, the platform partnered with taxi service unit, Kuaidi New Taxi, and the new economy ride-sharing service, Huaxiaozhu, to issue a driver subsidy worth CNY 100 million.
