The global app-based ride-hailing market is becoming increasingly competitive as Chinese operator DiDi Chuxing expands into new territories, including South Africa. Uber and Bolt have already transformed ride-hailing in this country, and DiDi is expected to further disrupt the market.
The major players all hope to play a major role in the expected growth of the global market, from $42.25-billion in 2020 to $56.87 billion in 2021, making for a growth rate of 34.6%. According to the Ride-Hailing Global Market Report 2021: Covid-19 Growth and Change to 2030 report, released on ResearchAndMarkets.com, the growth is mainly due to the companies resuming their operations and adapting to the new normal while recovering from the Covid-19 impact. The pandemic had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges. The market is expected to reach $108.15 billion in 2025 at a Compound Annual Growth Rate (CAGR) of 17%.
Ride-hailing service providers need to follow several state and central laws for uninterrupted services. For instance, in U.S, driver-related regulations include requirements for background checks, driver’s licenses, vehicle registrations, special licenses such as business licenses, and external vehicle displays. While, the company-related regulations include requirements for the number of ride-hailing vehicles operating in a metropolitan area, providing a list of drivers to the city, and sharing trip data with the city. In some countries, fingerprint-based background checks are mandatory.
This is because of the reported incidents of sexual assault and violence. In February 2020, a report from the Union of Concerned Scientists shows that the average U.S. ride-hailing trip results in 69% more pollution than the transportation choices it displaces based on federal vehicle efficiency statistics. The environmental concern has enforced certain regulations on pollution control. Therefore, more restrictive regulations are coming into force and compliance with these government regulations may act as a restraining factor to the ride-hailing service market growth.
On-demand transportation services and a lower rate of car ownership among millennials are driving the growth of the ride-hailing market. On-demand transportation services is characterised by flexible routing and ad-hoc scheduling of private vehicles offering personal transport experience to the general public by picking or dropping at locations of passenger’s choice. On-demand ride-hailing services ensure that customers can accurately locate the vehicles, track their journey, and offer safety to the occupants, and this factor is expected to significantly drive the market growth.
A lower rate of car ownership among millennials due to the high maintenance cost of personal cars is resulting in the rise in demand for ride-hailing services. The millennials are choosing practical, smartphone accessible transport options that are simple, flexible and inexpensive over car ownership. Also, buying a new car and maintaining it is costlier than renting a vehicle every year. According to a survey by Cox Automotive in 2019, around 55% of Gen Z agrees that transportation is necessary but owning a car is not important which is supported by 45% millennials, 34% Gen X and 28% boomers. Hence, on-demand transportation services and a lower rate of car ownership among millennials drive the growth of the ride-hailing market.
For more information about this report visit https://www.researchandmarkets.com/r/hgue53
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