The ride-sharing industry is considered the third revolution in the transportation industry. The integration of the technology industry and the transportation industry provided ease of travel. Ride-sharing services are convenient, reliable, and affordable travel solutions.
As per current trends and statistics, the ride-sharing business has seen significant growth. This year, the market hit US$276.40 billion. The number of users for the ride-sharing industry could reach 1,430.8 million in the upcoming year. It is the stage for global ride-hailing dominance.
The growth of Uber and Lyft clearly shows the rising demands of online platforms. Both Uber and Lyft offer According to Statista, Uber and Lyft’s revenue for 2022 is $25.55B and $3.701B, respectively.
Despite the hike in the industry, there are certain areas where the ride-sharing business faces issues. Driver lawsuits, security problems, payment problems, and program crashes are some of the difficulties. The industry has certain upcoming challenges that need to be addressed. They become an issue for company owners.
In this article, we will discuss upcoming challenges in the ride-sharing industry. Also, what are the opportunities in the ride-sharing business? Before that, let’s know some must-know facts about the ride-sharing business.
Facts about the ride-sharing industry
Ridesharing platforms generally connect drivers with customers who want to move from one place to another. Customers use the mobile application to book rides.
Uber and Lyft are successful digital ridesharing platforms. Other examples include Gett, Club, Didi, Gojek, etc. Many small businesses and startups are entering the ridesharing business.
The ride-sharing industry has a significant role in controlling environmental pollution and carbon emissions. The ridesharing industry is eliminating the need for personal vehicles.
Ridesharing is an easy, convenient, cost-effective, and reliable relocation solution. The entire industry is built on the needs and pain points of customers.
Ride-sharing industry: Challenges
When we talk about the ride-hailing landscape, the first names that come to mind are Uber and Lyft. These two are the oldest startups that made ride-hailing services popular. The major revenue for ride-hailing comes from these two apps. Uber was the only platform with online ride-booking services.
But now, various small startups are trying their hand at ride-sharing applications. Local competitors are creating ride-hailing software. Increased competition results in lower rates and more efficient services.
For instance, in Brazil, there is Easy Taxi; Austria has Hitch-a-Ride, and China has Didi Chuxing. All these apps have an impact on their industry.
Competition is a challenge for big names. Companies must look at the growing competition. They must work on the impact of competition and how competition affects sales.
Countries like Singapore are working on rules and regulations to control the ride-sharing business. Even the taxi industry will face the consequences. Till now, these two markets have been ill-defined. The fact is that the ride-sharing industry has emerged in the last few years. Thus, the government was unable to implement any laws.
Increasing crime rates and underpaid drivers are filing lawsuits against these companies. However, the government is more likely to support startups and development in the transportation industry. But regulations may backfire against champions. They will lose the freedom to act on their own.
Low Pay Driver
Another challenge ride-hailing services like Uber have to face is the increasing conflict among drivers. Uber and Lyft drivers are underpaid. The share and the profit they receive fall under the low wage. In protest of the violations, multiple lawsuits have been filed against companies.
For instance, in Austin and Texas, drivers are suing Uber and Lyft for low pay and the benefits provided by the companies.
Apart from low pay, public security is also a major reason companies are dragged into court. Thus, drivers’ low pay is a major issue for ride-hailing businesses and needs to be tackled. Also, safety and security are always the top priorities in the right place.
Ride-sharing industry: Opportunity
“Every challenge, every adversity, contains within it the seeds of opportunity and growth.” is a quote by Roy Bennett. Certainly, quotes are true in many aspects of life. In the business world, no specific laws apply to all situations.
As a result, the only way to sustain a business is to act in response to needs. Challenges are the roadblocks that can change the entire business path. Here, we listed a few areas that are opportunities for the ride-sharing business.
Ride-Sharing and Ride-Hailing are two different terms used synonymously. Commonly, people consider them the same, but both are different in one aspect. Ridesharing refers to the service when multiple customers share the same ride-based route. In contrast, ride-hailing is for general rides.
Personal rides are expensive. Thus, ride-sharing is more cost-effective for customers. Ridesharing is a new opportunity for companies to increase their reach. Affordable rides will attract more people to ride-hailing platforms.
Address the Environmental Changes
Easy, affordable, and reliable ride-hailing services eliminate the need to own personal cars and vehicles. As a result, there are subsequently fewer personal vehicles on the road, which lowers carbon emissions.
Moreover, ride-sharing is an additional point that makes the ride-hailing business more relevant. What’s going to be the opportunity for the ride-hailing business?
In developed and developing countries, the environment is a big issue. People are concerned about environmental changes, glacier melting, and UV rays’ impact. Therefore, anything that reduces the risk is their concern. Ride-hailing businesses should advertise their services that favor fewer carbon emissions.
As mentioned in the challenges section, crime is also increasing as the industry grows. Companies should work more on these areas. If people feel safe, no one will ever invest their time and money in services.
Yes, security concerns are a challenge for ride-hailing businesses. But that can be used as an opportunity to stand out from the competitors. Market services as companies are responsible for security and safety concerns.
Making proper protocols for pick-up and drop-off points, stricter driver identification, and consistent tracking of the entire ride will increase trust among ordinary people.
In reference to all above, we can conclude that ride-sharing software has innumerable challenges that need to be tackled. Along with challenges, the industry also has various opportunities that need to be addressed. Overall, the ride-hailing business has taken over the transportation industry.