Digitization and Growing Traffic Pushing the Shared Mobility Market

Digitization and Growing Traffic Pushing the Shared Mobility Market

By Knowledge Sourcing Intelligence Blog

The Global Shared Mobility market size was valued at $177.517 billion in 2020 and is anticipated to increase at a Compound Annual Growth Rate of 16.48% over the predictive period to reach $516.541 billion by 2027. Shared mobility is a service offered by organizations or individuals, wherein a vehicle is shared by a passenger and driver in return for a cost based on distance or time. Owners of such commercial vehicles may offer services such as vehicle hire, ride-sharing, car-pooling, etc. With the increasing gasoline prices and road traffic volumes, the shared mobility market has seen an increase in demand. Moreover, the increasing adoption of smartphone and internet services have also had a positive influence on the shared mobility market.

Growing Traffic to Fuel the Market Demand

The automotive industry has seen rapid developments in recent times. Advancements in technologies like driving assistance, safety assistance, stability in performance, navigation, smart assistance, etc, have resulted in significant growth in demand for the automotive industry. Growing concerns over environmental pollution and climate change effects have led to the development of environment-friendly vehicles. Innovations in the field of electric vehicles, hydrogen cell vehicles, and solar vehicles, have helped in fulfilling the growing demand for clean energy vehicles. Moreover, increasing government incentives and policies to tackle climate change and meet carbon neutrality goals have resulted in a growth in demand for the automotive industry. Global sales in the year 2020 reported a slowdown, owing to the COVID-19 pandemic. However, the market is recovering and according to a report released by OICA, the global sales in the year 2021, increased by almost 5% from 2021 from the previous year. Also, according to a report by IEA, global Electric Car Sales have seen an increase of about 41% in the year 2020. The sales of electric cars were recorded at 4.6% of total car sales around the world. Electric vehicle sales are expected to jump from 3 million vehicles in 2017 to 23 million in 2030, according to the International Energy Agency. Hence, the automotive market is expected to rise even further.

However, this increase in vehicle sales has resulted in a significant increase in traffic. Since most countries have lifted their lockdown protocols, the roads and highways have reported a significant increase in traffic. According to data released by the US Department of Transport, travel on US roads increased by 2.9% in March 2022, as compared to the previous year. Also, travel on US roads increased by 19% in March 2021, as compared to the previous year. This increase in traffic is also accompanied by a significant increase in fuel prices. According to data from the US Energy Information Administration, the average increase across all regular-grade gasoline prices in the US was about 34% in May 2022, as compared to the previous year. This increase in fuel prices has been seen across most nations worldwide. This has been directly linked with the ongoing Russia-Ukraine conflict, which has led to a scarcity of fuel, leading to an inflated price.

The increasing fuel prices, vehicle maintenance costs, parking restrictions, and increasing traffic volumes have led to an increase in demand for the shared mobility market. Two-wheelers have been increasingly popular due to the increasing traffic volumes. Moreover, the increasing cases of accidents worldwide have also positively influenced the market, since the vehicle liability usually resides with the driver and not the passenger. These factors have resulted in a positive demand for the shared mobility market, and are anticipated to further increase the market demand.

Increasing Smartphone Penetration

Smartphone technology has reported rapid advancements over the last few decades. The increasing accessibility and usability have led to an increase in market demand for smartphone technology. Developments in the user interface, camera technology, performance, e-payment technology, etc, have led to an increased usage of smartphones. According to GSMA, the number of mobile internet users reached 4.2 billion in the year 2021. Moreover, the increasing adoption of 5G technology has significantly increased the smartphone market. GSMA also reports that by the end of 2025, 5G is expected to account for over a fifth of the total internet connections in the world.

This increasing smartphone penetration has resulted in a positive market impact on the shared mobility market. Online services such as Uber, Rapido, Ola, and other services have led to a significant increase in the shared mobility market. Services such as easier booking, cancellation, payment options, etc have had a significant impact on the shared mobility market. Further, with the increasing advancements in smartphone and internet services, the shared mobility market is anticipated to grow significantly.

Asia Pacific Region to Lead the Market

The Asia Pacific market is expected to hold the largest market share in the shared mobility market throughout the forecast period. The market is predicted to grow as a result of factors such as rising technological and smartphone innovations. The introduction of better internet services and accessible smartphone technology in the region has led to the rapid adoption of shared technology. The increasing population in the region has also resulted in the adoption of shared mobility services. The rapidly expanding automotive industry and road traffic volumes are expected to drive up the demand for the shared mobility market. The increasing investment and maintenance costs in the automotive industry in countries like China and India have led to an increase in demand for the shared mobility market. Moreover, the increasing breakdown and accident cases, and repairing costs associated with vehicles have also contributed to the expansion of the shared mobility market. The shared mobility market is anticipated to grow significantly in the Asia Pacific as a result of these factors.

COVID-19 Insight

The outbreak of the COVID-19 pandemic resulted in a global economic downfall. Since governments implemented lockdown and social distance measures, most major industries experienced significant losses. This resulted in a decrease in vehicle movement, due to the suspension of non-essential services. The shared mobility market suffered significant losses due to this. Public transportation also suffered a slowdown due to such measures. Moreover, even after the regulations were lifted, the people were reluctant to use shared mobility services, due to fear of contamination and infection. Consequently, as most industries have reported resumption of services, the shared mobility market is expected to grow at a significant rate.