On-Demand Transportation Market Size Worth USD 304.97 Billion By 2025
The global on-demand transportation market size is expected to reach USD 304.97 billion by 2025, according to a study conducted by Grand View Research, Inc. It is anticipated to expand at a CAGR of 19.8% during the forecast period. Rising penetration of smartphones and connected vehicles is increasing the adoption of on-demand transportation services such as e-hailing, car sharing, car rental, and station-based mobility. These services enable users to pre-book, modify, or cancel their taxi reservations via mobile applications such as Uber and Gett.
Advancements in IT infrastructure and growing usage of car sharing services by millennials are anticipated to drive the adoption of on-demand transportation services in Europe. Asia Pacific is estimated to witness considerable growth over the forecast period, owing to increased traffic and fuel prices. Government initiatives, such as the Smart Mobility 2030 plan of the Land Transport Authority of Singapore, are also likely to bolster the market growth.
Among different on-demand transportation services, car rental was anticipated to be the largest segment in terms of market share in 2017. However, demand for other services such as e-hailing and car sharing are anticipated to witness substantial rise over the forecast period. Market participants are engaging in different business expansion strategies such as product launches and partnerships to gain market share. For instance in September 2018, BMW and Daimler announced their collaboration for starting combined car sharing service in Germany.
The trend of micro mobility sharing such as two-wheeler, e-bike, and e-scooter sharing is growing rapidly in developing countries such as China and India. Several new companies are entering the on-demand transportation market by providing smartphone-based car booking services. However, global players such as BMW Group, Daimler AG, Uber Technologies, and OLA dominate the market.
The ban on DIDI Chuxing by the Chinese government in September 2018 for alleged passenger murders has increased concerns among customers over ride sharing. Similar cases have been filed on Uber drivers for misbehaving and mistreating users in the past. Moreover, issues regarding poor connectivity and high costs of developing infrastructure may further hamper growth of the market. Therefore, the service providers are focusing on developing car-sharing applications, which do not require internet connectivity for accessing them.
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Further key findings from the study suggest:
- E-hailing services is poised to witness the fastest CAGR of 20.4% over the forecast period, as these services provide flexibility to users by allowing them to reserve taxis through an application
- Micro mobility segment is projected to register the highest CAGR of 24.7% over the forecast period
- Asia Pacific is anticipated to be the most promising region during the forecast period due to increased traffic and vehicle costs in countries such as Japan and China
- Some of the prominent participants in the on-demand transportation market are International Business Machines Corporation (IBM); BMW Group; Daimler Group; Ford Motor Company; General Motor Company; Gett, Inc.; and Robert Bosch GmbH.
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About Grand View Research:
Grand View Research, Inc. is a U.S. based market research and consulting company, registered in the State of California and headquartered in San Francisco. The company provides syndicated research reports, customized research reports, and consulting services. To help clients make informed business decisions, we offer market intelligence studies ensuring relevant and fact-based research across a range of industries, from technology to chemicals, materials and healthcare.