The ridehailing trend has emerged in a futuristic landscape of shared mobility, catering to the consumer’s need for quick, convenient, and cost-effective transportation. Mimicking the long-known taxi form of commuting, ridehailing connects the rider and the driver by a smartphone app, allowing riders to easily hail a ride, track where there driver is in real-time, and be given pricing before confirming the trip. On the business-side, ridehailing platforms have opened up the driver industry to a wider range of people seeking employment, creating an opportunity for passive income that many drivers pair with existing or secondary forms of income.
The Ridehailing Trend: Past, Present and Future Overview
The background of ridehailing
Ridehailing’s history isn’t that long, but one could say that since ridehailing is essentially an iteration of the standard taxi, that it goes way back to 1605 when the first taxi – by way of horse and carriage – was implemented. But in the closest sense of what is has become today, ridehailing was really launched in 2009 by Garrett Camp when Uber first came onto the scene as ‘UberCab.’ After their beta launch in May of 2010, Uber’s services along with their mobile app were officially launched the following year in San Francisco. In the early days, however, Uber was built around the premise of black car service and private driver, with only black luxury cars and prices 1.5 times that of a standard cab. After complaints were made by San Francisco-based taxi operators, ‘UberCab’ became what it is today and was renamed to simply ‘Uber.‘
After estimating demand that was more similar to a standard cab, ridehailing started to reflect what it is today: in the spring of 2012, Uber launched a service in Chicago allowing riders to request a regular taxi or an Uber driver with its mobile app. By the summer of 2012, UberX was introduced, allowing people to drive for Uber using their own vehicles, subject to meeting certain vehicle standards. After beta testing in the SF bay area, Uber launched UberPOOL – an option to carpool with same app – in the summer of 2014. In 2014, Uber begins looking at opportunities to implement ridehailing in other ways, with plans to disrupt the parcel delivery and food delivery industries. Later that year, Uber launched UberFresh (now UberEats) to deliver food to consumers in Beverly Hills.
Also in 2012, Uber’s largest ridehailing competitor Lyft came onto the scene. Initially, Lyft was offered as a service under Zimride, a long-distance ridesharing company operating since 2007, focused on providing shared rides for longer trips and linking drivers and passengers through Facebook. By the spring of 2014, Lyft was operating in a total of 60 US cities and competing heavily against Uber. In the summer of 2014, Lyft Line was introduced, allowing passengers to split fare on shared rides (and serving the more affordable ridesharing market). The main difference between Zimride and Lyft represents the difference between ridesharing and ridehailing today – Zimride is more similar to carpooling with strangers, while Lyft is more similar to calling your own private taxi.
DiDi – now the second largest ridehailing company in the world – was founded in June of 2012, was launched as ‘Didi Dache,’ an app for consumers to request taxis for immediate pick up and later allowing consumers to reserve taxis for the next day. Today DiDi is one of the major taxi apps in China, with over 100 million users in more than 300 cities. Also in 2012, GrabTaxi was launched in Malaysia as a mobile taxi booking app and expanded to the Philippines in the summer of 2013.
In 2016, the company rebranded to just ‘Grab,’ offering all of their products under the brand including:
- GrabCar, personal car service;
- GrabBike, motorcycle taxis;
- GrabHitch, carpooling option;
- and GrabExpress, last mile delivery service.
Present Situation for ridehailing
Today, North America is the highest contributor to the global market of ridehailing, followed by Asia-Pacific. In 2017, the global ridehailing service market was valued at $36 million. It is projected to increase to $126 million by 2025, registering a CAGR of 16.5% from 2018 to 2025.
At present, the biggest ridehailing companies – which also offer ridesharing services under their brands – are still Uber, Didi Chuxing, and Lyft. As of 2018, the valuations of the biggest ridehailing companies are as follows:
- Uber: 72 Billion
- Didi Chuxing: 56 Billion
- Lyft: 11.5 Billion
- Daimler: 7.1 Billion
- Grab: 6 Billion
- Ola: 3.8 Billion
- BlaBla Car: 1.6 Billion
- BMW: 400 Million
However, this landscape is changing fast with recent news of expansions happening in the arena. Bosch, the German company best known as an automotive parts supplier, recently acquired American ride-sharing startup SPLT. In addition, Sony recently announced a partnership with Tokyo taxi companies to lend its AI technology to support the business of their dispatch. Rental car companies like Avis (who purchased carsharing giant Zipcar) is also working with Waymo to develop a self-driving ridehailing program in Arizona.
The trend towards ridehailing is in part a response to car manufacturers planning for a future where less car owners and drivers exist. As it stands, Americans between the ages of 16 to 24 with a driver’s license dropped from 76% in 2000 to 71% in 2013, and carsharing memberships are on the rise with every passing year. In addition, advancements in connected and automated vehicles to reduce CO2 emissions further the advance of ridehailing services. All considered, it makes sense that car manufacturers are looking to secure their businesses in the future.
However, certain areas around the world are still awaiting ridehailing to jump the hurdle of regulatory and union-backed challenges. Ridehailing services will not be available to people in our home of British Columbia until at least the fall of 2019, according to the latest news from the provincial government. In areas pro-keeping the taxi services in business, apps like Easy Taxi (popular in Mexico, Brazil and the Middle East and available in a total of 30 countries) have launched to connect the consumer to the driver in a similar way that ridehailing does with a convenient smartphone app.
THe ridehailing trend: what does the future hold?
Having already disrupted the mobility world, offering cheaper and more convenient alternatives to renting and owning vehicles, ridehailing has a promising future. However, it does still have certain challenges to overcome in order to be world-dominating.
Some of these issues might be solved by the implementation of blockchain technology. In the future, blockchain may be integrated with ridehailing technology to ensure greater screening measures of drivers and higher security standards for drivers. This has become a glaring need, particularly to ensure the safety of female users of ridehailing; in just two years, 4 female riders have killed, and in 2018 two women were murdered using Didi’s carpooling service, Hitch. This led to users in China boycotting the service altogether, igniting a digital movement #BoycottDidi, which has received more than 1 million views. While there have only been a handful of these reports and it’s argued that standard taxis aren’t always safe, either, consumers need to be better protected. Blockchain technology may be implemented for the screening process of both drivers and riders before approval.
Another future expectation of ridehailing is, of course, autonomous ridehailing – which takes the question of the driver out of the equation altogether, perhaps advancing the safety of ridehailing and allowing for even lower costs per ride to the end consumer. Autonomous vehicles would also be available 24 hours/day, allowing for more convenience and availability. Lyft has a partnership with General Motors in the name of launching an on-demand network of autonomous vehicles, which are currently in beta testing along with similar Uber vehicles in US cities.
“Autonomous vehicle fleets will quickly become widespread and will account for the majority of Lyft rides within 5 years,” says John Zimmer, CEO of Lyft.
Tesla’s CEO, Elon Musk, believes the AV transition will occur through a network of autonomous car owners renting their vehicles to others, which may create a new form of ridehailing altogether. And with the shift of both ridehailing and car ownership moving towards autonomous vehicles, we can expect the very fabric of our cities – which current infrastructure is largely dedicated towards the functioning of private car ownership – to change dramatically.
Look around you: how many parking spaces, buildings, and undergrounds do you see on a regular basis dedicated to parking spaces? We expect this land mass to be implemented in other, more liveable, sustainable ways. In addition, curb space will be needed to support autonomous vehicles the same way parking spaces currently support privately owned vehicles: curb space will have to be allocated for safe, convenient and easy pick up and drop off locations.
In a current environment where car ownership is expensive and pollution needs to be mitigated, ridehailing is a form of transportation that makes sense both economically, for ease of use, and – where EVs are implemented – for the health of our cities. We expect that, with the advancement of technologies and the furthering of policies and regulations implementing autonomous and connected vehicles, ridehailing will only continue to impact our cities and personal lives in a positive way.
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