Taxi Market - Growth, Trends, and Forecast (2020 - 2025)
NEW YORK, March 3, 2020 /PRNewswire/ --
The taxi market is expected to register a CAGR of 9.22%, during the forecast period, 2019-2024.
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- Reduced taxi fare and ease of booking through mobile apps are the major factors that has driven the online booking segment type to capture a major share of more than 40% of the taxi market in 2017, globally. With the advent of e-hailing taxi applications, such as Uber, Lyft, Ola, etc., taxi services have been one of the game-changing innovations of the transportation sector.
- Passengers' preferences for utilizing taxi services and ride-sharing services across developing countries, such as India, China, Vietnam, etc. has increased. This has led to companies enhancing the options and expanding their operations to be provided in mobile applications to retain their respective market share in the highly competitive market.
- Asia-Pacific captured a major share of the market, accounting for more than 70% of the global motorcycle/bike taxi market in 2018. Increasing traffic congestion and low taxi fare, when compared to other modes of transportation, are the major factors driving the growth of the motorcycle/bike taxi service in the Asia-Pacific market.
Key Market Trends
Increasing Demand from Online Channel
Ease of booking through mobile applications and online websites has significantly attracted customers to prefer online booking over offline booking, owing to the increasing usage of internet and smartphones by people, across the world.
Additionally, information, like tracking the driver's location, pre-estimated ride fare, driver contact, and vehicle details, all available within an app at a short time has further increased the customer preference more toward the online booking option.
Many major operators, like Grab, Uber, Ola, etc., provide ridesharing option (which provide fare-splitting option among co-passengers) in their respective apps in certain regions, to capture the increasing demand for low taxi fare services, among the customers.
To sustain the above growing trend of ridesharing service, local taxi operators have started to adopt the same strategy, and are trying to incorporate ridesharing option in their respective taxi app development. For instance,
- In Vietnam, Mai Linh, one of the major taxi operators in the country, is trying to focus on providing ridesharing services, to overcome the country's mobility challenges (majorly due to traffic congestion and rising population) by partnering with Kyyti Group, in November 2017.
- In January 2019, a new company called Ridealto was established that offers ride-sharing services on a subscription basis. The company has its own fleet of SUVs and drivers.
Asia-Pacific - Leading the Taxi Market
The demand for taxi service in the Asia-Pacific region has been increasing rapidly, owing to the rapid adoption rate of ride-sharing service among customers, in countries, like Vietnam, India, China, and Singapore. Thus, to capture the growing taxi market in the countries, foreign players, like Ola, Uber, and Didi Chuxing are launching and expanding their existing services in the market. For instance, on 25th June 2018, Didi Chuxing launched its services in Melbourne and India's Ola also entered the Australian market by the end of 2018.
Although the demand for Taxi in the Asia-Pacific region has been increasing over the past three years, the government norms on the taxi industry have also been stringent, especially in countries, such as Australia, Vietnam, etc.
- In Vietnam, after the implementation of pilot program Decision No. 24/QD-BGTVT, in January 2016, by Ministry of Transport (MoT), the number of taxis operated by seven operators (majorly by Uber and Grab), through app increased to ~78,000 cars in 2017. In 2018, the Department of Transportation in Vietnam decided to stop licensing operators under a pilot program, as the app-based taxis have been putting pressure on local traffic infrastructure and creating unhealthy competition with the traditional taxi and transportation firms.
- In 2018, the Australian government announced a levy of AUD 1 on taxi services, which may impact customers with 7-12% rise in the taxi fares.
In recent years, new and innovative technologies and business models have appeared in many countries and cities across the world, through smartphone apps. These involve booking and payments systems, ridesharing services, and using private vehicles for passenger transport.
These technological platforms provide an extension for the on-demand transport market in the region. For instance, 'sharing economy' platforms make it easier for customers to negotiate and engage directly with service providers. Consumers are also provided with a higher level of information and opportunity for price comparison in advance. All the above factors have contributed to the growth in Asia-Pacific's taxi market.
Competitive Landscape
Some of the major players in the taxi market include Uber, Grab, Lyft, Ola, etc. Among them, Uber's main strategy to expand its business is to focus on upcoming technologies, like automated driving vehicles. In 2018, the Toyota Motor Corporation announced to invest USD 500 million in Uber technologies, to develop self-driving cars, and aims to deploy them in Uber ride-sharing network by 2021.
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