The global ride hailing services market size was valued at USD 34.45 billion in 2018. The growing urban population in developing economies including China and India is expected to remain a favorable factor. Mobility-as-a-Service (MaaS) is inspired by the anticipation of self-driving cars, which are expected to reduce the price of ride hailing services significantly. Furthermore, the financing activity for owning a car has been made easier and cheaper by reducing the rate of interest by banks and lenders. Organizations are innovating the services by hiring fleets of automated vehicles for ensuring better passenger safety and comfort.
Rising preference for carpool and bike pool services among regular office commuters is anticipated to create growth opportunities for the market. These services have proved to be beneficial for commuters as they can cut their expense pertaining to gas and parking by more than 50%. The service allows the riders to travel with comfort at discounted prices. Pooling can improve air quality by reducing the number cars and traffic on the road. In Europe, Germany has the highest rate of adoption of carpooling and it is followed by France.
Customers can a hatchback, sedan, and SUV amongst others. Ride hailing enables them in outrunning the conventional public transportation services. Furthermore, these services allow them to choose the convenient pick-up and drop locations. Some of the services such as Ola and Uber also facilitate real-time vehicle tracking, sharing it with one’s kin and friends, feedback, and rating system. The availability of multiple service providers has given customers an edge as it gives them a chance to compare the service and rates. A recent study by the University of Pennsylvania highlighted that the expansion of ride hailing services has reduced the instances of drunk driving, which makes these vehicles a safer option.
Another important factor driving the ride hailing services market is the shifting preference of the masses from driving a car to being driven. Rise in demand for luxury car services at affordable prices, especially among millennials is anticipated to create growth opportunities for the market. Majority of millennials avoid buying cars, saving the ownership, maintenance, and fuel costs along with road tax. Increasing use of public transport is reducing traffic congestions and is proving beneficial for the environment. A common trend that has been noticed in countries including India, China, and Australia is the payment made by digital mode owing to the convenience it offers to both drivers as well as passengers.
Another major factor positively influencing the growth is the increasing use of digital money. With governments across the globe focusing on digital payments, ride hailing services have evolved as the medium of public transport that support the cause. These companies accept payment by digital wallet, unified payment interface, net banking, and various other e-payment methods. In India, the demonetization in November 2016 offered a leverage to the companies operating in the country. They became the first choice of people for travelling owing to the convenience of payment. Post demonetization, the industry saw three times increase in the demand for the services.
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