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Valued at $50.4 billion in 2018, the global ride-hailing market is estimated to reach $120.2 billion by 2024, witnessing a CAGR of 13.0% during 2019–2024.
Among all regions, APAC dominated the global ride-hailing market, owing to the massive acceptance of ride-hailing services in China. The country alone held market share of over 70% in 2018 in the region. China is the home to the world’s largest ride-hailing market. And Beijing Xiaoju Technology Co. Ltd. (Didi Chuxing) being the key player in China, takes nearly 90% of all bookings in the country.
Fundamentals Governing Ride-Hailing Market
The key trend observed in the ride-hailing market is the deployment of electric vehicles in ride-hailing services. Governments of several countries are taking active initiatives to introduce different policies and regulations, in order to encourage deployment of these vehicles in operators’ fleet. Different companies are also taking initiatives to introduce electric vehicle fleets for their ride-hailing services. For instance, in 2019, Hyundai Motor Company announced that it would deploy a range of electric vehicles in Ola Cabs, in India by 2021.
The government support towards the adoption of ride-hailing services, is one of the key factors boosting the growth of ride-hailing market. Apart from the national governments that are reforming policies to facilitate the implementation of ride-hailing program, city and state authorities are also taking initiatives to accelerate the adoption of ride-hailing services locally. For instance, in November 2018, the Mayor of London announced his plans to initiate the building of public parking spaces to facilitate the parking of public vehicles, with the intention of reducing vehicle ownership.
The players in ride-hailing market observe huge growth opportunities, owing to the significant amount of investments received from top global investors. For instance, in April 2019, DENSO Corporation, the SoftBank Vision Fund, and Toyota Motor Corp. (Toyota) announced to together invest an amount of $1 billion in Uber Technologies Inc.’s Advanced Technologies Group (Uber ATG). DENSO and Toyota together invested $667 million and SVF invested $333 million, that valuated the new Uber ATG entity at $7.25 billion.
Ride-Hailing Market Segmentation Analysis
When segmented on the basis of vehicle type, the economy category dominated the ride-hailing market during the historical period. The number of cars operating under economy category is more as compared to the executive and luxury categories. Majority of customers prefer ride-hailing services for shorter to medium distance travels, therefore they do not prefer to invest much and opt for economy cars.
In terms of commuting pattern, the daily/weekly category is expected to witness the fastest growth in the ride-hailing market, during the forecast period. Tie-up of ride-hailing service providers with different business firms and corporates to offer their ride-hailing services to the firms’ employees is benefiting the growth of this category.
Among all end users, personal category held the largest share in the ride-hailing market. Majority of the customers use ride-hailing services for their personal works, which may include going to their workplace, to run errands like grocery shopping, and to travel specific locations, such as railway station or airport.
Geographical Analysis of Ride-Hailing Market
Globally, APAC held the largest share in the ride-hailing market. The increased customer demand for ride-hailing services, and government concerns over environmental pollution were the factors for the market growth. Moreover, increasing internet penetration in the region, along with the need to develop alternative mobility options to combat road congestion during peak hours, is further driving the demand of these services.
During the forecast period, the rest of the world (RoW) region is estimated to witness the fastest growth in the ride-hailing market. In recent years, the market has witnessed a rapid growth in the region, owing to the need to develop a mobility solution to combat the environmental concern, as well as to ensure customer-friendly solution. For instance, Brazil is a densely populated country and is characterized by high rate of urbanization. These factors have contributed significantly toward the rise in traffic congestion in the country, favoring the growth of the market.
Competitive Landscape of Ride-Hailing Market
The global ride-hailing market was consolidated in nature, characterized by the presence of established players such as Beijing Xiaoju Technology Co. Ltd. (Didi Chuxing), and Uber Technologies Inc. Besides, Grab Holdings Inc., ANI Technologies Pvt. Ltd. (Ola), Yandex.Taxi B.V., Gett Inc., FREE NOW, inDriver, RideCell Inc., Bolt Technology OÜ, VOXTUR SAS, and Addison Lee Ltd. are the other players operating in the market.
Recent Strategic Developments of Major Ride-Hailing Market Players
In recent years, several companies launched and expanded their services in the ride-hailing market. For instance, in July 2019, Uber Technologies Inc. launched Uber Comfort, a new ride tier, which would offer customers to access quick ride, control vehicle's air conditioning, and high rated drivers at a premium price. The cost of Uber Comfort would be 20–40% more than UberX ride. The service was launched in 44 cities across three U.S. states, namely, New Jersey, Connecticut, and Rhode Island.
Furthermore, in June 2019, DiDi Mobility Japan Corp., a joint venture by SoftBank Corp. and Beijing Xiaoju Technology Co. Ltd. (Didi Chuxing), announced the launch of its ride-hailing services in Hokkaido, Japan, which includes the capital city of Sapporo. This would follow a further expansion of services to Tokyo, Kyoto, Osaka, and Hyogo, and other areas, by the end of the year. In Hokkaido, the company would provide services in areas, such as Sapporo, Hakodate, and Furano, by collaborating with leading taxi companies.
Key Questions Addressed/Answered in the Report