On-Demand Transportation Market to Hit US$ 340 Billion by 2030

The on-demand transportation market size is expected to hit around USD 340 billion by 2030, growing at a CAGR of 19.25% over the forecast period 2021 to 2030.

Tokyo, Nov. 15, 2021 (GLOBE NEWSWIRE) -- According to Precedence Research, the global on-demand transportation market size was reached at USD 120.85 billion in 2020. On-Demand transportation allows passengers to plan their trip at a convenient time (during service operating hours) and be picked up at an agreed-upon location. On-demand transportation is becoming more popular around the world. E-hailing, automobile sharing, car renting, and station-based mobility are providing a productive environment for the transportation business to develop.

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Crucial factors accountable for market growth are:

  • Increased traffic congestion as a result of an increase in the number of automobiles
  • Increased tourist and working-class population, as well as a growing trend of road trips
  • The increasing popularity of smartphones
  • Rising gasoline prices, fewer parking spots, and exorbitant automotive prices

Report Scope of the On-Demand Transportation Market

Report CoverageDetails
Market Size in 2020USD 120.85 Billion
Growth Rate from 2021 to 2030CAGR of 19.25%
Fastest Growing MarketNorth America
Largest MarketAsia Pacific
SegmentationService Type, Vehicle Type, Region
Companies CoveredGeneral Motor Company, BMW Group, Daimler Group, Robert Bosch GmbH., Ford Motor Company, Gett, Inc., NI Technologies Pvt. Ltd. (OLA), Lyft Inc.

Regional Snapshots

Asia Pacific is estimated to have the greatest share of the On-Demand Transportation market during the forecast period. The Asia-Pacific area serves as a reporting platform for transportation infrastructure and service provision; regional, urban, and rural connectivity challenges; and public health problems such as road safety and pollutant emissions.In 2021, revenue in the Car Rentals industry in the United States is expected to reach USD 22,424 million. By 2025, the number of users in the Car Rentals market is estimated to reach 49.7 million. In 2021, user penetration is 10.8 percent, with a projected increase to 14.6 percent by 2025. In terms of worldwide revenue, the United States will generate the most. Such high car rental revenue in U.S. will create a positive impact on the overall on-demand transportation market.

Report Highlights

  • Car rental was expected to be the largest segment in terms of market share among various on-demand transportation services in 2017. However, demand for other services such as e-hailing and car sharing is expected to rise significantly over the forecast period.
  • The four-wheeler segment provides advantages such as reduced noise pollution and a more comfortable driving experience, which is critical in developed countries. Rising consumer disposable income in countries such as India and China are also helping to drive growth. Thus, the four-wheeler segment has the major share in the on-demand transportation market.

By Service Type: E-Hailing, Car Sharing, Car Rental, Station-Based Mobility

By Vehicle Type: Four-Wheeler, Micro Mobility

By Geography: North America, Europe, Asia Pacific, Rest of the World

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Market Dynamics

Driver - The rising sales of smartphones

The rising number of linked vehicles has improved acceptability of on-demand transportation services such as car sharing, e-hailing, station-based mobility, and automobile renting. With the use of mobile applications, consumers may alter, pre-book, or cancel their cab arrangements. Furthermore, advancements in IT infrastructure and a growth in the use of cab or taxi sharing services by individuals are expected to fuel the introduction of on-demand transportations that save fuel and time.

In 2020, smartphone penetration in India reached 54 percent, with a projected increase to 96 percent by 2040, more than doubling from the previous fiscal year, when just 22 percent of mobile users used a smartphone. In 2020, the total number of smartphone shipments in India is expected to be approximately 149.7 million. In 2019, the United Kingdom had the highest smartphone penetration rate in the world, at 82.9%. Increased smartphone sales will have a beneficial influence on the on-road transportation sector throughout the projection period.

Restraint - The increased passenger safety

In recent years, passenger safety has emerged as one of the most important limitations on the expansion of the on-demand transportation industry, with increased passenger safety concerns having a significant influence on market growth. Governments are worried about such incidents and may enact rigorous restrictions to ensure the safety of passengers and drivers. The Department of Transport's (DoT) On-demand Transport (OdT) business section monitors the passenger transportation industry to ensure public safety requirements are fulfilled. In September 2021, an Indian Uber driver was arrested for raping a female passenger. As a result of this occurrence, the government is implementing passenger safety steps, which will limit market expansion.

Opportunities - Development of AI for transportation

The transportation industry is being transformed by artificial intelligence. It is already being used in a variety of transportation industries, from assisting automobiles to operating autonomously to smoothing traffic flows. It can help to make all means of transportation safer, cleaner, smarter, and more efficient, in addition to making people's lives simpler. Autonomous transportation powered by artificial intelligence, for example, might assist to eliminate the human mistakes that cause many traffic accidents. The EU is taking efforts to adapt its regulatory framework to these changes, so that it can foster innovation while also ensuring basic values and rights are respected.

General artificial intelligence strategies and guidelines that support the technologies that enable the application of artificial intelligence in transportation are among the measures that have already been implemented. Furthermore, the EU gives financial assistance, particularly for research. For example, in February 2019, the European Parliament passed an own-initiative resolution on "a comprehensive European industrial strategy on artificial intelligence and robotics," which includes a section on transportation. These aspects provide potential for industry participants in the on-demand transportation business.

Challenges - Poor connectivity in some locations

The well-known issue that many of the world's poorest people lack the means or equipment to log on, with only 31% of people in developing nations utilising the internet, compared to 77% in affluent ones. Still, Internet connection is a luxury for half of the world's population, who does not have access to the Internet through a mobile device or fixed line broadband. The greatest access rates are seen in advanced economies such as the United States, France, Germany, the United Kingdom, and Canada. The proportion of Internet users in major emerging economies varies greatly, ranging from roughly two-thirds in Brazil and Mexico to about one-third in India.

Countries in Sub-Saharan Africa, followed by those in Asia's growing and developing economies, have the lowest Internet connectivity while being world leaders in mobile money transactions. There is also a significant difference in Internet connectivity among organizations in Sub-Saharan Africa; only approximately 60% of businesses utilize email for business, compared to roughly 85% in Europe and Central Asia.

Recent Developments

  • In 2021, OLA, an Indian e-hailing startup, recently declared a strong desire to extend its operations in Australia and New Zealand.
  • For example, in 2015, BMW Group, Audi AG, and Daimler Group paid USD 3.1 billion for HERE, Nokia's digital mapping and positioning company. The acquisition was made to improve the mapping capabilities of the BMW Group.
  • Ford Motor Company announced the formation of Ford Smart Mobility LLC, a new business intended to develop, construct, expand, and invest in innovative mobility services, in 2016.

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