The mobility sector is on the brink of a major overhaul, transforming from a product-based industry (individually owned cars) to a service-based industry (ride sharing and public transportation). Between autonomous vehicles and the proliferation of ridesharing services, new potential revenue streams are opening up in the transportation market, even as traditional vehicle sales stagnate, and even drop over the next ten years.
According to a NewtonX survey deployed to executives in the auto industry, ridesharing industry, and autonomous vehicle sector, autonomous ride-sharing is expected to generate the largest share of revenue in the mobility market by 2030, even when compared to traditional car sales. Until then, though, the results of the NewtonX survey showed what auto industry leaders expect in terms of revenue share, city policy, and rider trends over the next ten years.
Growing Congestion and Slowing Car Sales: What We Can Expect From the 2020s
Somewhat counterintuitively, ridesharing services such as Uber and Lyft have actually increased city congestion. The reason is, over 50% of e-taxi trips would not have been taken without a ridesharing service (passengers otherwise would have walked, biked, or taken public transportation). This has created a congestion crisis in many major US cities — forcing them to respond with congestion tolls, setting driver wage floors, and capping hailing licenses.
Despite this barrier, however, ridesharing growth will continue to increase. Of people who regularly use ridesharing services, 76% say that they expect to increase the number of rides they take per month over the next two years. Additionally, while fares will likely remain stagnant, the number of drivers will continue to increase, particularly as ridesharing companies come under fire for driver wages.
Concurrently, city dwellers in particular will stop investing in personal cars at the same rate. This is already starting to happen, with growth in car sales slowing (last year sales grew .6%; this year growth is expected to slow even further, until sales stagnate and eventually decrease). The cause of this slowdown in the car boom of the past ten years is not just ridesharing; it’s also due to the micromobility movement, as well as city investment in public transportation.
As we’ve previously written, microbility services such as Bird, Lime, and Citi Bike have had astronomical growth over the past two years, logging 10x more trips during their first 12 months than their e-hailing counterparts did during their first year in business. While the overall market for micromobility services is still small (not to mention the barriers the industry has faced, in particular pushback from cities), it does provide a possible solution to the growing problem of congestion in cities.
2030s and Beyond: Micromobility at Scale and Lower E-hailing Prices With Increased Automation
American culture around car ownership is changing, particularly in congested cities where there are other, more sustainable and cost-effective methods of transportation. This shift occurred as a result of service-based companies including Lyft and Uber, but its ramifications will move well beyond these two companies. People are increasingly more willing to share rides, experiment with alternative transportation methods (dockless scooters, bikes, etc.), and reduce their carbon footprint through limiting the number of household vehicles.
Concurrent with this trend, increased automation will make providing cost-effective ride hailing services more feasible. Cities, pressured by congestion crises, will need to find scalable and effective infrastructure for e-hailing, micromobiltiy, and of course, traditional public transportation.