Uber Re-enters the Shared Mobility Market After Two Years of Pandemic
The size of the global shared mobility market was estimated at USD 166.3 billion in 2021, and it is projected to increase at a CAGR of 16.9% from 2022 to 2030. An emerging market called shared mobility allows customers to share transportation resources and services either individually or in combination. Shared mobility is not only affordable and environmentally good, but it is also convenient.
Now, let’s talk about what’s happening in the giant ride-hailing company – Uber. The Wall Street Journal reported that average pricing for services like Uber and Lyft reached a record high in April 2022, up 35% from pre-pandemic levels.
The data also reveals that in the first quarter compared to three years ago, both companies recorded 35% fewer trips and 20% fewer riders. These rideshare companies’ prices reached all-time highs, due to the skyrocketing gas costs and a driver shortage.
This is not the only thing that has happened to these companies. Uber’s shares have fallen about 50% in the past year, while Lyft’s have fallen about 65%. Lyft’s shares have decreased by around 69% since the pandemic started, while Uber’s have decreased by 45%.
Passenger numbers are declining as fare increases, drivers are still in low supply, and investors are putting further pressure to cut heavy losses.
In the first quarter compared to three years ago, the firms’ combined ridership was down at least 20% and journeys were down 35%.
Analysts and investors are speculating about the size of the market for ride-hailing services and whether Uber and Lyft can continue to make money.
Uber is bringing back carpooling services
Uber is reintroducing ridesharing services to pick up several passengers who want to save money by simply paying a portion of the fare in order to fight the persistent set of challenges. During the health emergency, ride-sharing was suspended. They’ll be providing this service at a discount — in certain U.S. cities.
Currently, New York City, Los Angeles, Chicago, San Francisco, Phoenix, San Diego, Portland, Indianapolis, and Pittsburgh are the target cities for shared Uber rides. The business claimed it will add more cities later this summer.
The service is now marketed as “UberX Share,” having previously gone by the name “Uber Pool.”
Riders will receive an upfront discount in addition to up to 20% off their ride if they are paired with another rider mid-trip. The business is striving to strike a new balance between driving profits and expanding its customers while remaining reasonably priced.
Uber has been subsidizing ride costs for years. Although it burdened the company with significant losses, these reductions allowed them to boast of tens of millions of riders. Uber is making a gamble that shared rides would win back customers who are price-conscious. In November, Uber resumed them in Miami, and it intends to later this year expand to 15 additional markets.
Factors contributing to the growth of the shared mobility market
Many governments throughout the world are starting initiatives to encourage the expansion of these congestion-reduction solutions. Due to factors including enhanced accessibility, reduced driving, and decreased personal car ownership, this has a huge impact on commuters’ lifestyles and the market as a whole.
Benefits to the environment, society, and the transportation system are typically obtained through shared mobility projects. Public transit, which includes shared public transportation, micro-mobility (bike- or scooter-sharing), commute-based modes, or ridesharing are some of the different ways that people commute (car or vanpooling).
The increase is the result of more individuals globally and in emerging nations becoming online. A factor for the segment’s growth is also anticipated to be the emergence of new services designed to guarantee complete customer satisfaction.
Lack of parking spaces, increasing traffic congestion, the expensive expense of having a personal vehicle, and most importantly, high fuel prices are other factors that encourage the growth of the market for shared mobility. The market is anticipated to expand further because of the increased development in the number of private-sector employees who would like to commute via shared mobility services.
Why shared mobility would be a good choice for entrepreneurs?
Over $100 billion has been spent on shared mobility startups since 2010. The players in the automobile industry are not the ones who are investing in shared-mobility startups, according to a closer examination of investor types.
As opposed to betting on tried-and-true, long-lasting company models, almost 72% of the total disclosed investment since 2010 has come from venture capital and private equity players, indicating a bet on the future. With about 21 percent, tech companies come in second, and with about 4 percent, the automotive industry.
The market for shared micromobility is expanding and showing significant investment acceleration. Shared-micromobility firms have already garnered capital commitments of more than $9 billion, placing that segment second behind e-hailing players, despite the fact that shared electric scooters only recently entered markets on a big scale. This is a result of the rapid growth of shared micromobility trips.
Some significant participants in shared mobility have even outperformed conventional automakers in terms of valuation. Shared-micromobility player valuations are substantially lower right now, but they increased quickly, with some even reaching unicorn status in a short period of time.
Shared mobility will become more and more popular, which will slow but not stop global automobile sales. Over the next 15 years, car sales in emerging nations will outperform the effects of shared mobility, even though there will probably be fewer new cars on the road as a result of sharing. However, if automakers, suppliers, and other mobility participants take action now to prepare for it, the shared mobility tale isn’t all terrible for the industry. Even though the shared-mobility sector is still in its infancy, some much larger automakers have already been surpassed by its new entrants in terms of market valuations, indicating strong investor backing.
After reading the article, if you feel that the shared mobility market is the space you want to invest in, then choosing the correct mobility software would be essential for you. Jugnoo.io has helped businesses across 75+ countries to set up and scale their mobility startups in an effective manner. We provide you with multiple seamless integrations, complete white-label solutions, a strong admin panel, and customer & driver apps so that you can become the leader in the market.