Global On-Demand transportation Services market is projected to grow at a CAGR of 10.52% during the forecast period. On-Demand Transportation Service is a public transportation service provided by ride-hailing, leasing, rental, and ride-sourcing companies. These services can be utilized by pre-booking through the company’s apps or by an offline method like call or SMS. Demand for on-demand transportation service is also increasing due to ease in pre-booking, modify, and cancel of bookings at lower costs by using applications.
The global on-demand transportation services market is driving owing to the increasing prices of vehicles, growing fuel prices, reduced parking spaces, and expensive maintenance of the vehicle. Rising advancements in IT infrastructure along with increasing investments is boosting the market growth of on-demand transportation services. The demand for On-demand transportation services is being driven due to its ease of operation, affordability, greater convenience as compared to public transport, along with the increased penetration of smartphones and connected vehicles. The rising adoption of car-sharing services by millennials is also contributing to the growing market for on-demand transportation services. Growing air and noise pollution levels are pressurizing governments to take strict measures in order to reduce these levels. As a result of growing environmental concerns supported by stringent regulatory standards implemented by international organizations is leading to the encouragement of adopting ride-sharing services, thereby positively impacting the market growth of on-demand transportation services.
However, recent cases for drivers being abusive have raised the safety and security concerns among customers which are currently restraining the market growth to some extent. For example, the Chinese government put a restriction on DIDI Chuxing in September 2018 for supposed traveler murders which further increased worries among clients.
Global On-Demand Transportation Services market is segmented by type, by vehicle type, by business model, by application, and by geography. By type, the market is segmented into ride-sharing, vehicle rental/leasing, and ride-sourcing. By vehicle type, the market is segmented into passenger cars, light commercial vehicles, heavy commercial vehicles, buses & coaches, and micro-mobility. Segmentation by the business model is done as C2C, B2B, and B2C. Based on the application, the global on-demand transportation services market is segmented into passenger transportation and goods transportation.
Ride Sourcing has a significant share in the market
The growing penetration of the internet worldwide is a major driver for the on-demand transportation services market as more people are using the internet for booking cabs and/or for renting vehicles. The penetration of the internet has grown double fold in a decade from 22.96% individuals using the internet in 2008 to 49.72% individuals using the internet in 2017.
Car sourcing apps like Uber, Ola, and Gett require seamless internet connectivity as they connect the host server for reserving bookings of the user. The adoption of ride-sourcing services is increasing among people in order to avoid road congestion while saving on the cost of owning a vehicle, thus bolstering the market growth of this type of on-demand transportation service. Ridesharing is expected to grow at a decent CAGR during the forecast period owing to the rising awareness among people about climate change and being more conscious about taking necessary steps to save the environment. The adoption of ridesharing services is growing at a significant rate as it allows to reduce the cost incurred on fuel. Vehicle rental/leasing also holds a noteworthy market share over the forecast period.
Vehicle type passenger’s cars and light commercial vehicles have a significant share in the market
By vehicle type, passenger car segment is projected to witness a significant market growth rate during the forecast period. Passenger cars are widely being used for ride-sharing and ride-sourcing purposes. The booming demand for ride-sharing and ride-sourcing services is thus, is fueling the market growth across this segment. Light commercial vehicles too will have a major share in the market due to increasing vehicle rental/leasing services for transportation of goods. The growing e-commerce industry is one of the major factors for the increasing demand for vehicle rental/leasing services, thus propelling the overall market growth. Buses and coaches are utilized when passengers are more in number and for longer distances. Whereas micro-mobility is used for shorter distance and with accommodation of a maximum of two or three passengers. Since the far incurred for micro-mobility is relatively low as compared to passenger cars, the demand for two-wheeler/three-wheeler is augmenting at a fast pace and will bolster the market growth significantly during the forecast period.
By business model, B2C has a major segment
B2C is one of the major segments of the business model in the global on-demand transportation services market. The increasing use of ride-sourcing and ride-sharing is driving the market growth of the B2C segment by a higher margin as compared to others. B2B business model will witness a considerable CAGR during the projected period on account of growing leasing and renting of vehicles for transportation of goods by small and medium businesses.
By geography, Asia Pacific has a notable share in the market
Regionally the global on-demand transportation services market is classified into North America, South America, Europe, Middle East and Africa, and Asia Pacific. The Asia Pacific is expected to hold significant market share and will grow at a decent CAGR between 2019 and 2025. Increased traffic congestion and rising vehicle costs in countries such as China, Japan, and India make APAC the most promising region for on-demand transportation service providers during the forecast period. The emerging trend of micro-mobility including e-bike, two-wheeler, and e-scooter in emerging economies such as China and India is further spurring the market growth of on-demand transportation services in this region.
Market Players and Competitive Intelligence
The competitive intelligence section deals with major players in the global on-demand transportation services market, their market shares, growth strategies, products, financials, and recent investments among others. Key industry participants profiled as part of this section are ANI Technologies Pvt. Ltd., GETT, Uber Technologies Inc., Lyft, Inc., Grab, Enterprise Holdings, Inc., and Avis Budget Group.