Tthe global on-demand transportation market is expected to expand at a CAGR of about 14% during the forecast period and expected to reach USD 356 billion by 2027.
The transportation industry is undergoing significant transformation and people are adopting online booking applications in order to book a mode or means of transportation. Rising traffic congestion and high fuel cost are key factors driving the adoption of on-demand transportation services. Adoption of smartphone-based internet services is rising among consumers, primarily due to the increased usage of smartphones, ease of operating the app, faster internet connectivity, and presence of globally leading and local service providers coupled with lower charges of services. High cost of vehicle ownership is encouraging people to prefer on-demand transportation services owing to their cost effectiveness and availability as per the requirement. Furthermore, on-demand transportation is an effective solution for the rising traffic congestion, as higher vehicle ownership is likely to boost the number of vehicles on road. Less number of vehicles per 100 people, increase in number of daily commuters heading to workplaces and homes, increased burden on public transportation facilities due to rapid urbanization, and lack of proper connectivity of public transportation systems are fueling the demand for on-demand transportation services. On the other hand, public transportation facilities across the globe are failing to cater to the demand, due to increasing urbanization and rising population. Increase in number of working class people, rise in income opportunities, increase in per capita income coupled with increased tendency to travel for work and holidays are fueling the demand for on-demand transportation services across the globe.
Countries from Europe and North America are well-developed and witness extensive adoption of advanced technologies and smartphones. Availability of faster internet connectivity and presence of globally leading service providers coupled with higher rate of adoption from consumers led the organized sector to hold a major share of the market in North America and Europe. However, in other regions, the unorganized segment accounts for major share of the market, in terms of revenue. Vehicles utilized in the unorganized sector are generally privately owned. These are considered as private services, as unorganized services cannot be availed through internet or smartphone-based apps.
In terms of type, ride sourcing is an emerging trend across the globe, in which consumers can book a ride via a smartphone-based app. Ease of operating the app, increased penetration of smartphone users, and availability of reliable internet services are fueling the demand for ride sourcing services. Ride sourcing services are flexible and hence, a large number of consumers traveling to workplaces, homes, to restaurants, and colleges prefer ride sourcing services. Thus, the demand for ride sourcing services is increasing owing to an increase in the working class population. Low rate of motorization, lack of adequate public transportation facility, crowded public transportation, and increase in fuel prices coupled with elimination of driving are fueling the ride sourcing segment of the global on-demand transportation market. The ride sourcing segment of the market is anticipated to expand at a CAGR of about 20% during the forecast period.
Based on business model, the P2P segment is a well-established segment and is expanding at a significant rate owing to the cost-effectiveness of the journey. Moreover, the expansion of the P2P segment can be a solution to reduce emission from vehicles, owing to sharing of the vehicle by multiple travelers on the same route. Furthermore, software solution providers or platform providing companies are increasing their own fleet size in order to boost revenue, which in turn is driving the B2C segment.
Entry level passenger cars are widely adopted for passenger transportation services. Maneuverability, requirement of smaller space, exemption from several taxes, higher fuel efficiency, and lower cost of entry level passenger cars make them suitable for passenger transportation services. Demand for SUVs is rising among consumers, which is attributed to consumer preference for longer journeys, larger space in the vehicle, and high comfort factor. Large number of passenger cars utilized for passenger transportation services are owned by individuals who are willing to share their vehicles. Such services are considered as peer to peer services. Large share of passenger cars has led the P2P segment to hold a major of the global on-demand transportation market. Legality of peer to peer services, increased per capita income of individuals coupled with willingness to share their vehicle, exemption from road taxes in several nations for passenger cars, and increasing demand for ride-sharing sourcing services rather than rental vehicles are fueling the passenger cars segment and subsequently, the P2P segment of the market.
Autonomous technologies have proven to be highly effective in reducing the number of accidents occurring due to driver errors. Consequently, regulatory bodies across several nations are mandating several ADAS (advance driver assistance system) technologies into vehicles. ADAS technologies, such as lane keep assists, brake assist technology, and adaptive cruise control, drive the vehicle automatically; consequently, consumers are preferring such semi-autonomous vehicles owing to rising concern for safety among society. Consumer demand for increased in-vehicle safety, incorporation of ADAS technologies at manufacturers end, and regulations implemented by governing bodies are fueling the demand for semi-autonomous vehicles across the globe. Market for electric vehicles, also considered as zero- or low-emission vehicles, is rising across the globe primarily due to the considerably lower operating cost as compared to that of conventional vehicles, heavy discounts and incentives offered by governing bodies, announcements to implement a ban over the use of fuel powered vehicles, and availability of electric vehicle manufacturers. The paradigm shift of governments toward building electric vehicle charging infrastructure is fueling the demand for electric vehicles. Therefore, electric vehicle segments, such as hybrid electric vehicle (HEV), plug-in hybrid electric vehicle (PHEV), and battery electric vehicle (BEV), are anticipated to expand at a significant growth rate during the forecast period. The rate of adoption of battery electric vehicles is increasing significantly among consumers, which is primarily due to the decline in prices of vehicles, increase in range of batteries, and heavy subsidies and incentives from governing bodies coupled with expanding charging infrastructure.
Demand for on-demand transportation services is rising considerably across countries that have lower number of vehicles per capita and lack of proper public transportation facilities. China and India are countries with large population and low motorization rate, thus people are moving toward alternative modes of transportation. Rising urbanization is fueling the demand for the on-demand transportation services in developing countries, owing to rising awareness among passengers, better internet connectivity, and increasing smartphone usage. Increased road traffic congestion, implementation of stringent emission norms from governing bodies in order to curb pollution level, and rise in working class population heading to workplaces and homes are fueling the demand for on-demand transportation services across the globe.
Key players operating in the global on-demand transportation market include ANI Technologies Pvt. Ltd. (OLA), Lyft, Inc., Grab, Careem, Uber Technologies Inc., Taxify OÜ, Gett, BlaBlaCar, Wingz, Inc, Curb Mobility, Cabify, Europcar, The Hertz Corporation, Beijing Xiaoju Technology Co, Ltd. (Didi Chuxing), Avis Budget Group, Inc., and Enterprise Holdings, Inc. The global on-demand transportation market is witnessing an increase in mergers and acquisitions as well as integration activities.
Segmentation
Overview
This report analyzes and forecasts the market for on-demand transportation at the global and regional level. The market has been forecasted based on value (US$ Mn) from 2020 to 2027 with base year 2019. The study includes drivers and restraints of the global on-demand transportation market. It also covers the impact of these drivers and restraints on the demand for on-demand transportation services during the forecast period. The report also highlights opportunities and future scope in the market at the global and regional level.
The report comprises a detailed value chain analysis, which provides a comprehensive view of the global on-demand transportation market. The Porter’s Five Forces model for the market has also been included to help understand the competitive landscape in the market. The study encompasses market attractiveness analysis, wherein the service is benchmarked based on market size, growth rate, and general market share.
The study includes profiles of major companies operating in the global on-demand transportation market. Market players have been profiled in terms of attributes such as company overview, financial overview, business strategies, recent developments, key executive bios, and manufacturing footprint.
The report provides the estimated market size of on-demand transportation for 2017 and forecast for the next ten years. The global market size has been provided in terms of revenue. Market numbers have been estimated based on type, vehicle type, business model, autonomy level, power source, application, and geography segments. Market size and forecast for each type, vehicle type, business model, autonomy level, and power source have been provided in terms of global and regional/country markets.
In order to compile the research report, we conducted in-depth interviews and discussions with a number of key industry participants and opinion leaders. Primary research represents the bulk of research efforts, supplemented by extensive secondary research. We reviewed key player’s product literature, annual reports, press releases, and relevant documents for competitive analysis and market understanding. Secondary research also includes a search of recent trade, technical writing, internet sources, and statistical data from government websites, trade associations, and agencies. This has proven to be the most reliable, effective, and successful approach for obtaining precise market data, capturing industry participants’ insights, and recognizing business opportunities.
Secondary research sources that are typically referred to include, but are not limited to company websites, annual reports, financial reports, broker reports, investor presentations, and SEC filings, internal and external proprietary databases, and relevant patent and regulatory databases, national government documents, statistical databases, and market reports, news articles, press releases, and webcasts specific to companies operating in the market, National government documents, statistical databases, and market reports, American Automobile Association, European Automobile Manufacturers Association, Automotive Research Association of India, Organisation Internationale des Constructeurs d'Automobile (OICA), Consumer Connectivity Association, ACRA, World Bank, Factiva, etc.
Primary research involves e-mail interactions, telephonic interviews, LinkedIn interviews, and face-to-face interviews for each market, category, segment, and sub-segment across geographies. We conduct primary interviews on an ongoing basis with industry participants and commentators in order to validate the data and analysis. Primary interviews provide firsthand information on market size, market trends, growth trends, competitive landscape, and outlook, etc. These help validate and strengthen secondary research findings. These also help to develop the analysis team’s expertise and market understanding.
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