Ridesharing is a service in which multiple people use the same means of transportation to get to the same or similar destination. With growing urbanization, we’re seeing the ridesharing market explode with more popular platform-based services becoming the norm. The market is drastically changing every day and research shows that it will continue to grow steadily over the next few years.
You might think you know all there is to the ridesharing phenomenon, but we’re pulling back the curtain and bringing you 5 statistics about this trend that just might surprise you.
1. The Rideshare Market is Projected to Reach $218 Billion by 2025
With global urbanization on the rise and personal car ownership declining, ridesharing has no doubt gained popularity in recent years. It’s the solution for growing decongestion issues and having fewer cars on the road. While there are some big players already dominating the market, we are seeing more apps burst on the scene that allow for a seamless and social user experience.
2. 70% of the Rideshare Market Remains Untapped
Despite its tremendous growth, only 1% of vehicle miles traveled in the US came from ridesharing 2016. McKinsey attributes this limited growth to the 45% annual driver turnover rate. In order to take on more of the market, ridesharing players should be focusing on non-urban markets and untapped commuter neighbourhoods in order to reach more potential riders.
3. The Ridesharing Industry is Bigger in China Than the Rest of the World Combined
In the world’s most populous country, ridesharing has taken off like no other. Perhaps it’s the 1.3 billion people making traffic congestion a harsh reality, the high cost of owning a personal vehicle, or the technological advancements in shared mobility that’s made China the leader of the pact.
In 2018, China’s revenue from the ride sharing industry amounted to $29.7 billion, with the United States ($17.1billion) and the UK ($2.2 billion) trailing behind. It’s because each large city in China has ride-hailing activity equal to that of a small country. The industry is expected to more than double to $72 billion by 2020.
4. Generation Z and Millennials in the US Dominate the Ridesharing Space
Often dubbed a trend amongst Millennials, we now know that both Millennials and Generation Z make up the majority of ride sharers. A recent study shows that 45% of Americans between the age of 18-29 are using ridesharing services. The majority of riders are in cities as opposed to suburban or rural areas, and 40% have an annual household income of $90,000 or more.
These demographics are embracing ridesharing because they’re tech savvy and they’re acutely aware of the growing urbanization and environmental problems. Millennials in particular tend to value experiences over material objects and are more likely to share belongings with others when compared to baby boomers.
5. RideSharing Services are Increasing in the Suburbs
It’s a common assumption that ridesharing usage is higher in urban areas, but we are seeing more people making uses of these services in suburban areas. In fact, 48% of Uber users across the US are in suburban areas, while 46% of users are in urban areas. In New York for example, families often relocate to the suburbs and have been traditionally bound to their personal vehicles, but more parents are relying on ridesharing services than ever before.
With the industry constantly evolving and more players entering the market, ridesharing will be a topic in the headlines for years to come. The hope, of course, is that soon we will start to see the impact on our roads and in our cities.