Today, the ride-hailing industry is considered to be one of the fastest-growing landscapes. Ride-hailing services provide door-to-door transport using a single platform that connects the driver and the passenger. With the ride-hailing market providing huge employment opportunities, low ownership cost for car owners and affordable, timely rides for the passengers, there has been a steady growth. In fact, the industry is set to continue its upward trend as it is forecasted to reach $126,521.2 million by 2025 with a 16.5% CAGR.
However, increasing competition brings in a whole lot of challenges. While ride-hailing giants like Uber and Lyft are expanding their worldwide presence, local ride-hailing players are also joining the digital ecosystem and putting up a tough fight. Nevertheless, there remains untapped opportunities in the on-demand transportation segment. Let’s take a look at the challenges and opportunities in the ride-hailing industry below:
Distinct hurdles in the ride-hailing market
- Impact of drivers
Drivers form an integral part of the taxi ecosystem. And when the competition is so high, almost every business is vying to get as many drivers on board. So, gaining your circle of driver partners can be a challenge. To tackle this, most businesses focus on building long-term relationships with new and existing drivers through loyalty programs. Additionally, training sessions via in-app videos has been an effective way of ensuring the safety of the drivers and, in turn, gaining their trust.
- Persistent pricing struggles
Some of the ride-hailing market giants are facing stern competition from their rivals. This is mainly due to the effective pricing strategies of the newcomers to attract customers. There are many players in this market and each one of them offers various rewards to attract their passengers. But, at the end of the day, the ones with better customer experience have the best chance of topping the charts.
Potential opportunities in the ride-hailing industry
- Exploring new verticals
There are many ways that a ride-sharing service can extend into, such as food services, medical services and courier delivery. For example, Uber started with its ride-hailing service and then, captured the food delivery marketplace. Likewise, Ola in India acquired Foodpanda for food delivery and is trying to dig deeper with an entry in the medicine delivery chain.
- Stabilizing flexible payment options
Nowadays, passengers prefer digital payment modes rather than cash payments. Therefore, options such as ride now and pay later, recharging wallets for payments after the ride and monthly payment packages, where they can pay the ride fares on a bi-monthly or monthly basis is garnering more attention in the taxi landscape.
Talk to our experts today to find more about upcoming challenges and opportunities in the ride-hailing industry.