The global on-demand transportation services market is projected to grow at a CAGR of 13.53%, from US$77.139 billion in 2020 to US$187.548 billion in 2027.
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 calling or SMS. Demand for on-demand transportation services is also increasing due to the ease of pre-booking, modifying, and cancelling bookings at lower costs by using applications.
The global on-demand transportation services market is growing owing to the increasing prices of vehicles, growing fuel prices, reduced parking spaces, and expensive maintenance of vehicles.
Rising advancements in IT infrastructure, along with increasing investments, are 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, and greater convenience as compared to public transport, along with the increased penetration of smartphones and connected vehicles. The growing adoption of car-sharing services by millennials is yet another prime factor that is adding impetus to the market growth 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, the government is encouraging the adoption of ride-sharing services, thereby positively impacting the market growth of on-demand transportation services.
However, recent cases of drivers being abusive have raised safety and security concerns among customers, which are currently restraining the market’s growth to some extent. For example, the Chinese government put a restriction on DIDI Chuxing in September 2018 for supposed traveller murders, which further increased worries among clients.
The global on-demand transportation services market is segmented by type, vehicle type, by business model, application, and 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 renting vehicles. The penetration of the internet has grown double-fold in a decade, from 22.96%, of individuals using the internet in 2008 to 49.72% of individuals using the internet in 2017.
Car sourcing apps like Uber, Ola, and Gett require seamless internet connectivity as they connect to the host server for reserving bookings. 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 people to reduce the cost incurred by fuel. Vehicle rental/leasing also holds a noteworthy market share over the forecast period.
Vehicle-type passenger cars and light commercial vehicles have a significant share in the market
By vehicle type, the passenger car segment is projected to witness a significant market growth rate during the forecast period. Passenger cars are widely used for ride-sharing and ride-sourcing purposes. The booming demand for ride-sharing and ride-sourcing services is thus fueling the market growth across this segment. Light commercial vehicles will also have a major share in the market due to increasing vehicle rental/leasing services for the transportation of goods. One of the major factors driving the increasing demand for the vehicle rental and leasing services is the growing e-commerce industry, which is propelling the overall market growth. Buses and coaches are utilized when passengers are in greater numbers and for longer distances. Whereas micro-mobility is used for shorter distances and with accommodation for a maximum of two or three passengers. Since the cost incurred for micro-mobility is relatively low as compared to passenger cars, the demand for two-wheelers and three-wheelers is augmenting at a fast pace and will bolster the market growth during the projected 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. The B2B business model will witness a considerable CAGR during the projected period on account of the growing leasing and renting of vehicles for the 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, the Middle East, Africa, and the Asia Pacific. The Asia Pacific region is expected to hold a significant market share and will grow at a decent CAGR between 2020 and 2027. 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-bikes, two-wheelers, and e-scooters in emerging economies such as China and India is further spurring the market growth of on-demand transportation services in this region.
Key developments in the market
COVID-19 had a significant impact on the global on-demand transportation market. The mandated lockdown, social distancing measures, and the adoption of the work-from-home model by the multiple small, middle, and large enterprises decreased the demand for on-demand transportation services, owing to reduced commutation. According to the financials released by Uber, for instance, the company's revenue decreased by 16 percent in 2020 compared to the former year.
|Market Size Value in 2020||US$77.139 billion|
|Market Size Value in 2027||US$187.548 billion|
|Growth Rate||CAGR of 13.53% from 2020 to 2027|
|Forecast Unit (Value)||USD Billion|
|Segments Covered||Type, Vehicle Type, Business Model, Application, And Geography|
|Regions Covered||North America, South America, Europe, Middle East and Africa, Asia Pacific|
|Companies Covered||ANI Technologies Pvt. Ltd. (Ola Cabs), Lyft, Inc., Uber Technologies Inc., Grab Holdings Inc., Gett, Enterprise Holdings, Inc, Avis Budget Group, Free2move|
|Customization Scope||Free report customization with purchase|
Frequently Asked Questions (FAQs)
Q1. What will be the on-demand transportation services market size by 2027?
A1. The global non-optical pressure sensor market is projected to reach a total market size of US$187.548 billion in 2027.
Q2. What are the growth prospects for the on-demand transportation services market?
A2. The on-demand transportation services market is projected to grow at a CAGR of 13.53% during the forecast period.
Q3. What is the size of the global on-demand transportation services market?
A3. On-Demand Transportation Services Market was valued at US$77.139 billion in 2020.
Q4. What factors are anticipated to drive the on-demand transportation services market growth?
A4. The on-demand transportation services market is growing owing to the increasing prices of vehicles, growing fuel prices, reduced parking spaces, and expensive maintenance of vehicles.
Q5. Which region holds the largest market share in the on-demand transportation services market?
A5. The Asia Pacific region is expected to hold a significant share in the on-demand transportation services market owing to the increased traffic congestion and rising vehicle costs in countries such as China, Japan, and India.
ANI Technologies Pvt. Ltd. (Ola Cabs)
Uber Technologies Inc.
Enterprise Holdings, Inc
Avis Budget Group
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