Growing Internet Penetration Worldwide Fueling Growth of On-Demand Transportation Services Market

The “On-Demand Transportation Services Market – Forecasts from 2020 to 2025” report has been added to ResearchAndMarkets.com’s offering.

The global on-demand transportation services market is growing owing to the increasing price of vehicles, growing fuel prices, reduced parking spaces, and expensive maintenance of vehicles. Rising advancements in IT infrastructure along with increasing investments is boosting the market growth of on-demand transportation services. The demand for on-demand transportation services is being driven due to its ease of operation, affordability, greater convenience as compared to public transport, along with the increased penetration of smartphones and connected vehicles. The rising adoption of car-sharing services by millennials is also contributing to the growing market for on-demand transportation services. Growing air and noise pollution levels are pressurizing governments to take strict measures in order to reduce these levels. As a result of growing environmental concerns supported by stringent regulatory standards implemented by international organizations is leading to the encouragement of adopting ride-sharing services, thereby positively impacting the market growth of on-demand transportation services. However, recent cases for drivers being abusive have raised the safety and security concerns among customers which are currently restraining the market growth to some extent.

The Global On-Demand Transportation Services market is segmented by type, by vehicle type, by business model, by application, and by geography. By type, the market is segmented into ride-sharing, vehicle rental/leasing, and ride-sourcing. By vehicle type, the market is segmented into passenger cars, light commercial vehicles, heavy commercial vehicles, buses & coaches, and micro-mobility. Segmentation by the business model is done as C2C, B2B, and B2C. Based on the application, the global on-demand transportation services market is segmented into passenger transportation and goods transportation.

The growing penetration of the internet worldwide is a major driver for the on-demand transportation services market as more people are using the internet for booking cabs and/or for renting vehicles. The penetration of the internet has grown double fold in a decade from 22.96% individuals using the internet in 2008 to 49.72% individuals using the internet in 2017.

Car sourcing apps like Uber, Ola, and Gett require seamless internet connectivity as they connect the host server for reserving bookings of the user. The adoption of ride-sourcing services is increasing among people in order to avoid road congestion while saving on the cost of owning a vehicle, thus bolstering the market growth of this type of on-demand transportation service. Ridesharing is expected to grow at a decent CAGR during the forecast period owing to the rising awareness among people about climate change and being more conscious about taking necessary steps to save the environment. The adoption of ridesharing services is growing at a significant rate as it allows to reduce the cost incurred on fuel. Vehicle rental/leasing also holds a noteworthy market share over the forecast period.

B2C is one of the major segments of the business model in the global on-demand transportation services market. The increasing use of ride-sourcing and ride-sharing is driving the market growth of the B2C segment by a higher margin as compared to others. B2B business model will witness a considerable CAGR during the projected period on account of growing leasing and renting of vehicles for transportation of goods by small and medium businesses.