COVID-19 Impact on Ride Sharing Market

Market Leaders - COVID-19 Impact on Ride Sharing Market

Post COVID-19, the global ride sharing market size is projected to grow from USD 75.39 billion in 2020 to USD 117.34 billion by 2021, at a Y-O-Y of 55.6% during the forecast period. The projection for 2021 is estimated to be down by 2% as compared to pre-COVID-19 estimation.

The major drivers of this market are increasing traffic congestions and growing need for personal mobility in the wake of rising urbanization and fall in car ownership. Also, growing internet and smartphone penetration and stringent CO2 reduction targets are leading to high growth of the ride sharing market.

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The ride sharing market is dominated by global players and comprises several regional players. Some of the key players in the ride sharing industry are Uber (US), Lyft (US), DiDi (China), Grab (Singapore), Gett (Israel), Ola (India), BlaBlaCar (France), Lime (US), and Herts (US).

Mergers & acquisitions and partnerships & expansion are the two most prevailing strategies to expand business in this market. For instance, Lyft announced the acquisition of Motivate, a New York-based company that currently operates bike share systems in some of the largest, densest US cities. Motivate is also getting a new name: Lyft Bikes. Lyft’s acquisition of Motivate is another big move by a ride-hailing company toward the goal of “mobility as a service.” Lyft reportedly picked up Motivate for USD 250 million.

The second most widely followed strategy is expansion. BlablaCar has expanded to Russia and Ukraine, the two biggest countries in Europe. The BlaBlaCar community has made a large number of cross-border trips to and from Ukraine—hundreds of drivers offer a ride from Poland to Ukraine every month.

DiDi is the largest ride sharing company in China and also the largest in the world, based on gross bookings.  DiDi adopted new product developments and partnerships to sustain its market position. In July 2018, DiDi added the Safe Driving System (SDS) on its drivers’ app to detect dangerous driving behaviors by using GPS, gyroscope, and other built-in sensors in smartphones. This is a big step to ensure road safety on DiDi’s platform. Drowsy driving, speeding, calling while driving and sudden acceleration, U-turns, and sudden braking will trigger the alert of the safe driving system, which will send warnings to the drivers and remind them to drive safely. In July 2018, DiDi announced the official launch of DiDi Mobility Japan Corp. (DiDi Japan), a joint venture with SoftBank, to offer on-demand taxi-hailing services and smart transportation solutions for citizens and tourists in the world’s third largest economy.

Further, due to the impact of COVID-19, the DiDi has adopted various precautionary measures, such as building disinfection stations across China for on-demand mobility vehicles and investments worth USD 14.3 million in safety steps that involve installing protective plastic sheets. However, as China’s selected provinces were under lockdown, which, according to officials, are now restarting their routines, the company faced a medium impact on business

Uber, one of the largest and most innovative ride sharing companies in the world, has adopted the strategies of expansion, partnership, and merger & acquisition to retain its leading position in the ride sharing market. In September 2018, Uber revved up its Canadian operations with a new engineering hub in Toronto and the expansion of its self-driving vehicle center in the city. The engineering hub—Uber’s eighth outside the US—was completed in early 2019 and will form the “building blocks” for stronger and faster global deployment of new offerings the company has been experimenting with like Jump bike and e-scooter rentals, public transit partnerships, and Express Pool. In February 2018, Uber and Russia’s Yandex completed a deal to combine their ride-sharing businesses in Russia and neighboring countries. Uber and Yandex announced plans to combine operations in 127 cities in Russia, Armenia, Azerbaijan, Belarus, Georgia, and Kazakhstan. Uber invested USD 225 million, and Yandex has contributed USD 100 million in cash in a new joint company valued at more than USD 3.8 billion.ž

Uber has widespread operations across the globe, in which most of the countries are under lockdown due to the COVID-19 crisis. Uber’s major stake is in the US, which would be under lockdown for at least two months, and hence, the company would face a high impact on business. Uber has temporarily paused its shared rides in all impacted markets and adopted precautionary measures like distributing disinfectants to drivers to help keep cars clean, reducing its fares during the pandemic, disinfecting all high contact surfaces on bikes and scooters in respective depots, and developing a new ’Work Hub’ app to help drivers find alternative jobs

Related Reports:

COVID-19 Impact on Ride Sharing Market by Service Type (E-Hailing, Car Sharing, Car Rental, Station-Based Mobility), Data Service (Information, Navigation, Payment) and Region - Forecast to 2021

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Report Code
AT 7620
RI Published ON
4/22/2020
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