Taxi Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Taxi Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The taxi market was valued at USD 159.6 billion in 2020. The market is estimated to reach USD 327.54 billion by 2026, at a CAGR of 8.95% over the forecast period (2021-2026).

In 2020, the global taxi market experienced a significant blow due to COVID-19, with lockdowns and restricted movements reducing the demand for the taxi. Post lockdown, increased risk of contamination associated with public transport has compelled people to abide by social distancing measures. Customers are showing a greater interest in personal vehicles, which is negatively impacting the taxi market. Nevertheless, with ease in lockdown measures and the availability of COVID-19 vaccines, the demand is slowly returning to the market. It is expected that by the end of 2021, the market will likely experience growth again.

In recent years, passengers’ preferences to avail themselves taxi and ride-sharing services across developing countries, such as India, China, Vietnam, etc., have increased. There has also been an increase in taxi demand in developed regions, such as the United States and Europe. This has led the companies to enhance the options available (such as the introduction of motorcycle/bike taxi) and expand their operations to be available through mobile applications, to retain their respective market shares in a highly competitive market.

Asia-Pacific captured a major share of the market, accounting for 73.14% of the global taxi market in 2020. When compared to other modes of transportation, increasing traffic congestion and low taxi fare are the major factors driving the growth of the motorcycle/bike taxi service in the Asia-Pacific market

Key Market TrendsRising Demand for Ride Hailing and Ride Sharing Services

The taxi industry has been one of the longest-running industries, contributing significantly to the global economy. However, the rising demand for ride hailing and taxi sharing services is replacing the demand for conventional taxis in the market.

Ride hailing is anticipated to lead the taxi market over the forecast period. According to some surveys, a total of 15 million ride hailing trips are made each day, which is expected to increase gigantically and hit the 100 million mark by 2030.

Several ride hailing companies are raising funds from investors intending to improve their technology and provide better services to their customers. For instance,

· In December 2020, Estonian ride hailing firm Bolt raised EUR 150 million (USD 182 million) in a funding round led by D1 Capital Partners. The company said it would use the money to develop driver face verification and machine learning to prevent potential incidents. The firm’s app now counts more than 50 million users in over 40 countries across Europe and Africa.

· In November 2020, Meru cabs announced that they are planning to raise USD 54.25 million (INR 400 Crore) from private equity funds. The fundraising plan comes at a time when the company is sharpening its focus on providing cabs to corporates and expanding its base of electric vehicles in India.

Owing to the modern taxi category, i.e., booking through mobile application, Uber and Grab gained immense traction from passengers. As more than 70% of the passengers consider taxi service as a convenient and quick commuting feature, the market has immense potential to grow over the forecast period

Asia-Pacific is Leading the Taxi Market

The taxi market is witnessing significant growth in Asia-Pacific. Players like DiDi Chuxing, Ola, and Onda are using the high smartphone penetration rate in Asia-Pacific to their advantage. They are capturing the market share through innovation and cutting-edge technology. These South Asian taxi giants are acing the competition in the regional markets and are expanding overseas. Chinese taxi giant Didi Chuxing has started operations in Mexico, Australia, Costa Rica, Japan, and many other countries, whereas the Indian market leader Ola is serving in Australia, New Zealand, and the United Kingdom.

China has the world’s largest taxi market, which can be attributed to its being the most populous country in the world. The taxi market in the country began to grow in the early 1980s. Due to their flexibility, comfort, good availability, and end-mile connectivity offering, taxis quickly became an essential service.

India is the second-most populous country globally, where most people fall under the middle-class economic category, and utilize cabs and auto-rickshaws (local three-wheeler taxis) for commuting short distances. The taxi industry is changing continuously, even on a quarterly basis, due to the different socio-economic and political situations arising in the country. Pooling/sharing taxis in the country saw huge demand, and now bike taxi is becoming even more popular, primarily because of its affordability.

Competitive Landscape

Some of the major players in the taxi market include Uber, Grab, Lyft, Ola, etc. Among them, Uber's main strategy to expand its business is to focus on upcoming technologies, like automated driving vehicles.

In 2020, DiDi Chuxing alone accounted for a maximum market share compared to its competitors, followed by Uber Technologies and Lyft. Didi is most widely used taxi app in the Chinese market, which is also prevalent in the Brazilian market. Didi started following the footprints of Uber’s future strategy by launching a trial run of its self-driving technology in Shanghai, China, in June 2020.

The key players in the industry are investing a lot of money in technology. Uber and DiDi Chuxing are working on self-driving cars. The focus is on enhancing the customer experience. In India, there has been a surge in the number of customers opting for outstation services. This has led to players, like Ola, Meru, and Prydo, to offer value-added services to their customers at very competitive prices. Ola partnered with Apple Music and other music and video streaming services for its prime play service.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

ANI Technologies Pvt. Ltd. (OLA)
BlaBlaCar
Bolt Technologies OU
Curb Mobility LLC
(Didi Chuxing) Beijing Xiaoju Technology Co. Ltd
Flywheel Software Inc.
Gojek Tech
Grab Holdings Inc.
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Kabbee Exchange Limited
Lyft Inc.
Uber Technologies Inc.

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