A study recently conducted by the strategic consulting and market research firm BlueWeave Consulting revealed that the ride sharing market is projected to reach USD 26.35 Billion by 2027 growing at a CAGR of 15.54% during the forecast period. The use of mobile apps or websites to provide users or passengers with access to vehicles or drivers for hire is known as ride-sharing. Ridesharing is beneficial for the environment and people in general as it involves more than one rider in the same vehicle. The demand for ride-sharing is growing globally because of increased mobile and internet penetration. In addition, the rising cost of vehicle ownership, combined with strict rules and regulations pertaining to the reduction of carbon dioxide is driving the demand for ride-sharing, globally. Furthermore, the industry is heavily influenced by the increasing demand for electric vehicles in ride-sharing services.
The Increasing Use of Smartphone and Internet
Since ride-sharing is an internet-based service, having access to the internet is a must to use in any part of the world. Users must download any ride-sharing app to their smartphone and use data services to navigate the app as well as to access other relevant information services. According to the International Telecommunication Union, the internet is used by 81% of developing countries. Also, 40% of people in developing countries now have internet access, and this figure is increasingly rising.
The Increasing cost of vehicle ownership
Due to rising fuel prices, as well as rising financing, insurance, and car registration costs, owning a personal vehicle has become prohibitively expensive.In addition to this, maintenance cost is also added to the cost of vehicle ownership,such as repairs of parts and accessories and labor charges. Aside from that, stringent rules and regulations pertaining to pollution control, among other things, make owning a personal car a little more difficult, allowing customers to use ride-sharing services.
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Impact of COVID-19 in the industry
Ride-sharing has been witnessing a major decrease in demand as a result of the COVID -19 outbreak. Owing to an increase in the number of cases of COVID-19, commuters are increasingly becoming concerned about using public transportation, which is negatively affecting the ride-sharing industry. Furthermore, government and healthcare authorities across the world have enforced social distancing norms as well as hygiene protocols that require people to maintain a two-meter distance from other people for safety reasons. These factors have stifled the use of ridesharing services for day-to-day transportation. Users nowadays prefer to travel in their cars due to health and safety concerns, which is likely to have a negative impact on market share. As ride-sharing companies strengthen their sanitization and safety measures, these issues are likely to diminish.
ICE occupies the largest share of the Global Ride Sharing Market
Based on vehicle type, the global ride sharing market is segmented into ICE (internal combustion engine), CNG/LPG, electric vehicle, and micro-mobility vehicle. Out of these, ICE is the dominant segment. Currently, two types of ICEs are used in production: (i) the spark ignition gasoline engine and (ii) the compression ignition diesel engine. Most of these are four-stroke cycle engines, meaning four piston strokes are wanted to complete a cycle. The automotive ICE segment is expected to grow significantly due to high vehicle demand during the forecast period. The rising demand for high-capability engines with reduced carbon emissions is also likely to fuel the sector's growth.
North America is expected to witness significant growth in the market during the forecast period
North America dominated the ride-sharing market in 2020 and is expected to maintain its dominance during the forecast period. Market dynamics highlight a rising trend among commuters in these countries to reduce their reliance on fossil fuels for regular transportation needs. The implementation of strict pollution regulations by the US Environmental Protection Agency (EPA) is propelling the regional market revenue even further. To empower individual commuters to utilize carpooling services for day-to-day commuting, the EPA provides multiple carpool reward programs.
The Asia-Pacific is also predicted to expand at a significant growth rate over the forecast period of 2021 to 2028 due to the massive demand for ride- sharing services in countries such as India and China. The rising cost of vehicle ownership, strict CO2 reduction targets, and the demand for electric vehicles in ride-sharing services have been contributing significantly to the growth of the ride-sharing market in the APAC region. Also, the growing demand for cost-effective and alternative mobility solutions is a driving force in the growth of the ride-sharing industry, which is propelling the target market's development.
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