Ride-hailing plateaus in US, but gaining ground in Asia

12 December 2019 Consulting.us 3 min. read
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Ride-hailing is seeing much greater uptake in India and China than in mature western economies, according to the Fourth Annual Global Mobility Study from L.E.K. Consulting, Vision Mobility, and CuriosityCX. The study surveyed 5,800 respondents in North America, Europe, Australia, India, and China.

More than half (55%) of Indian respondents and 40% of Chinese respondents said they used a ride-hailer such as Uber in the past three months. In Europe, ride-hailing use ranged from 15% to 25%.

In the US, which was the earliest adopter of new mobility, ride-hailing remained relatively static in the past three years, reaching 23% in 2017, then declining slightly from 26% in 2018 to 24% in 2019.

"The most exciting growth of new mobility is in India and China where ride-hailers and other innovative transport options are set to leapfrog the use of public transport and privately owned cars,” Ashish Khanna, partner at L.E.K. Consulting, said. “For car manufacturers, this means they should focus their strategy in these markets on selling to fleet companies rather than individuals.”

With relatively low levels of car ownership and less-developed public transit networks in India and China, ride-hailing is set to overtake traditional transport for a segment of the population, according to the report. That segment is higher-income urban dwellers with internet access, rather than, say, subsistence farmers.

Ride-hailing plateaus in US, but gaining ground in Asia

In the US and other mature economies, the initial uptake and then plateauing of ride-sharing has been accompanied by traditional forms of transit holding steady in usage, or declining. The portion of US respondents who used local public transit at least once in the past three months declined from 27% in 2016 to 23% in 2019, cab use declined from 17% to 8%, and car rental fell from 19% to 11%. Personal car usage declined only slightly from 84% to 82%.

"In the mature western markets for new mobility, uptake of ride-hailing, the first mass market new mobility option, has leveled off. Early adopting cities, such as New York and San Francisco, have even seen usage falling in the past year. The disrupters are themselves being disrupted by e-scooters and other new forms of micro-mobility, and regulator intervention is curtailing expansion.”

In the US, e-scooter usage increased from 3% in 2018 to 4% in 2019. About a third of global respondents were aware of e-scooter schemes and approximately 25% had used a scooter recently. Awareness levels were highest in India (63%) and China (46%).

EVs and AVs

The report projects a rapid increase in hybrid and electric, as well as autonomous cars, in the coming decades. Though EVs represent only 3% of global car sales in 2020, that figure is expected to rise to 15% in 2025 and 65% in 2040. Autonomous vehicle sales are set to grow from 2% in 2025 to 55% in 2040.

Nearly half of global respondents said they are interested in buying a hybrid or electric vehicle, but key barriers to ownership remain – namely cost, battery range, and lack of charging infrastructure

"To accelerate the move to electric vehicle adoption, car manufacturers must put greater emphasis on bringing down the cost of vehicles and improving battery mileage, and work more intently with governments and the broader industry to improve charging infrastructure," Khanna commented.

The eventual widespread use of driverless vehicles, meanwhile, could create revenue concerns for public transit in developed countries. “Their introduction will reduce the cost of ride-hailers and other forms of new mobility and make them competitive with public transport,” Khanna said. “Until that point, we expect new mobility in developed markets to primarily be a substitute for traditional taxis, for leisure use, and to fill the gaps that public transport does not cover.”