The mobility-on-demand market is set to grow from its current industry value of more than US$100bn to over US$200bn by 2024, according to a new research report by Global Market Insights, Inc.
The mobility-on-demand market is expected to grow over the forecast timespan due to the increasing inclination of customers toward shared services rather than ownership. The costs of owning vehicles – including components such as insurance, repair and maintenance, and depreciation – are more than the sharing of vehicles. Furthermore, volatility in fuel prices is encouraging the users to switch to shared transport, propelling the mobility-on-demand market growth.
Increasing government initiatives to implement these services are expected to accelerate mobility-on-demand market growth. The governments in various developed economies including the USA and Germany are funding such projects to foster innovations and provide technical assistance to industry players. For instance, the US Federal Transit Administration (FTA) has signed an agreement with a national non-profit organization, Shared-Use Mobility Center (SUMC), to successfully implement these projects across the country.
The growing trend of the adoption of electric and plug-in hybrid vehicles in shared transportation services is dominating the mobility-on-demand market. Increasing stringency of regulations regarding the emissions of hazardous greenhouse gases from the vehicles is compelling drivers and fleet owners to opt for these environmentally friendly alternatives.
Various automobile manufacturers are forming strategic partnerships with mobility-on-demand vendors to promote the use of electric or plug-in hybrid cars. For instance, Volkswagen UK has formed a partnership with Zipcar to launch a new fleet of 50 Volkswagen GTE plug-in hybrid cars in London. These premium zero-emission cars encourage more people to choose electric instead of fossil-fuel-based cars.
Technological advancements and the emerging IoT trend are further propelling the mobility-on-demand market growth. The rise in the number of connected vehicles and the increasing penetration of smartphones are anticipated to drive the industry.
Various government organizations are focusing on encouraging digitization for overall economic growth. Technological developments, such as autonomous and AI-enabled vehicles, are expected to revolutionize the industry, and innovations, such as electric vehicles and GPS-based navigation systems, are anticipated to fuel the mobility-on-demand market growth.
However, inadequate transportation infrastructure is expected to hinder mobility-on-demand market growth in countries including India, Brazil and Mexico. Deteriorating conditions of road infrastructure discourage commuters to travel by road, thus challenging the growth of the car rental market. Furthermore, the integration of these services with the traditional transport infrastructure is an expensive and time-consuming process. The lack of awareness regarding these services is pushing people to use public transport extensively, hindering the industry growth.
The growing popularity of carsharing services is also expected to propel the mobility-on-demand market growth. A reduction in travel costs and greenhouse gas emissions are some of the drivers of the carsharing industry. Technological advancements, such as smartcards, GPS tracking and the app-based reservation of cars will also drive growth in the carsharing market, affecting industry growth.
The mobility-on-demand (MOD) market in private applications is expected to witness a significant growth over the forecast timespan due to the growing inclination of individual commuters toward shared services. Increasing traffic congestion in urban areas is compelling people to opt for services such as ride hailing for running daily errands such as grocery shopping, thus propelling the ride hailing market growth to reach over US$100bn by 2024.
The increased convenience of booking these services through smartphone apps and websites is further increasing the demand for mobility-on-demand in private applications. Key players in the mobility-on-demand market are Lyft, DriveNow, Didi Chuxing, Gett and Uber Technologies.
The industry is highly fragmented in nature, and big players such as Uber and Didi Chuxing are adopting strategies such as aggressive takeovers to penetrate into newer regions and gain share.
For instance, in February 2018, Uber announced its intention to enter Vietnam by partnering with MoMo, a mobile wallet company in the country. Also, several regional players, such as Ola and Grab, are gaining a strong foothold in their respective regions by acquiring operations from foreign players such as Uber. For instance, in early 2018, Grab announced that the company is in preliminary talks with Uber Technologies to strike a deal to acquire its operations in Singapore.