www.GeoActiveGroup.com

How Ride-Sharing Apps Changed Local Transport

Building on significant advances in disruptive mobile app technology, ride-sharing services have emerged to become a popular means of urban mobility. This is unsurprising given the advantages of ride-sharing options over traditional transport modes, such as buses and more expensive taxis.

Innovative ride-sharing platforms enable app users to customize their journeys according to real-time phenomena, such as nearby traffic conditions, time of day, and rider demand. However, this is not to say that ride-sharing services are perfect.

The popularity of ride-sharing has resulted in some additional traffic congestion in major cities already struggling to control this issue, while the widespread disruption caused by the pandemic affected most stakeholders within the local transportation value chain.

Ride-Sharing App Market Development

According to the latest worldwide market study by Juniper Research, ride-sharing spending by consumers globally will exceed $937 billion by 2026 — that’s comparable to 50 times the combined annual revenue of Transport for London, New York City’s MTA, and the Beijing Metro in 2021.

This spending on ride-sharing represents an increase from $147 billion in 2021 and rapid total growth of 537 percent over the next 5 years. Regardless of attempts by some city government officials and their local legacy taxi company owner complaints, they won’t stop competition and innovation.

The concept of ride-sharing involves users accessing single-occupancy and shared carpool-style services provided by private drivers operating their own vehicles — coordinated by mobile-enabled app platforms such as Lyft and Uber.

Juniper analysts identified people in the U.S. and China markets as leading global spend on ride-sharing services — accounting for 65 percent of market value in 2026.

The study findings highlighted future government initiatives to reduce private vehicle usage in cities, allied with a strong pandemic recovery, as key to these countries’ positions as market leaders.

However, Juniper has cautioned that only 13 percent of potential riders are set to use carpool-style ride-sharing services in 2026, with the remainder opting for single-occupancy services — reflecting that the majority of people are willing to pay a small premium for the privilege of traveling alone.

Juniper also noted that while this is understandable given the ongoing pandemic, the emissions generated by single-occupancy services mean that platforms must explore non-financial incentives to drive increased adoption of carpool services.

This could include collaborating with city authorities to allow carpool vehicles to use public transport-only lanes, to make these services attractive in terms of both cost and efficiency.

Outlook for Ride-Sharing Applications Growth

“There are multiple strategies that ride-sharing platforms must leverage to drive adoption of carpool services, but these will need to be implemented carefully to avoid the perception of prioritizing carpool users over non-carpool ones. If implemented poorly, this will generate a negative reaction from users and lead to increasing competing services,” said Adam Wears, research analyst at Juniper Research.

That said, I’m very optimistic about the upside opportunities for additional ride-sharing services growth. And, I’m eager to see other sectors of local commerce disrupted by new ideas from entrepreneurs who imagine better ways to complete routine everyday tasks, such as local transportation ride scheduling.

Typically, incumbent players within legacy industries lack imagination and can’t seem to see past their decades-long status quo operating environment. They cling to the old ways and when new entrants offer alternatives their initial response is to protest the better methods and then seek partners that will help them block the implementation of progressive thinking. My point: the ensuing disruption is inevitable.

Originally published at https://blog.geoactivegroup.com on January 7, 2022.

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GeoActive Group | David H. Deans

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David H. Deans

David H. Deans

Technology, Media, Telecom analyst, consultant, columnist

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