The arrival of shared mobility companies, such as Uber, Ola, and Meru Cabs, has definitely made life easier for the urban resident. People no longer need to own a vehicle and spend ridiculous amounts on their maintenance every year; they can simply download the mobile app of the company and call a cab wherever they are, to go wherever they want. Travelers are usually charged on the type of vehicle rented and duration or distance of the trip.
The convenience these services offer people is a key reason cited by P&S Intelligence for the growth of the ride-hailing market to $120.2 billion by 2024 from $50.4 billion in 2018, at a 13.0% CAGR between 2019 and 2024. Apart from buying a vehicle, even maintaining it is becoming costly with the increasing prices of fuel, insurance premiums, registration and licensing services, and parking services. Therefore, many people, especially the youth in cities, are shifting their focus from owning one to renting one.
Moreover, the pathetic condition of the roads in developing countries, which is being made worse by traffic congestion, is discouraging many from taking their own vehicles out for a spin. Here, ride-hailing companies allow people to rent their own personal vehicle with a driver and go wherever they want, in relative comfort. Moreover, most of the cars deployed in such services are air conditioned and have at least FM radio, which lets people enjoy the perks that their own car would offer.
As a result, ride-hailing services are being increasingly used for personal and corporate purposes. More individuals than corporates utilize these services presently. People use these services for shopping, meeting relatives, picking kids up and dropping kids at school, going to college, and for numerous other purposes. Moreover, most of the office trips taken via these platforms are done on an individual level; therefore, ride-hailing services are majorly availed of for occasional commuting.
Due to such initiatives by governments and service providers, the ride-hailing market of Asia-Pacific (APAC) has been the largest till now. The growing urban population of India, China, Vietnam, and Indonesia is propelling the demand for a cost-effective means of commute. In addition, with fuel and car maintenance services becoming increasingly expensive, it is becoming infeasible for many to own a car, which is why they are availing of such services instead. Further, the boom in the popularity of such services in the region can be owed to the increasing availability of the internet and penetration of smartphones.
Hence, with the surging need for cost-effective urban transportation, especially among young people, ride-hailing companies can hope to make big business.
