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The growing disinclination to own a vehicle is one of the major factors driving the changes
The mobility-on-demand market is set to exceed $200 billion by 2024, according to a new research report by Global Market Insights. Its current industry value is around $100 billion.
The expansion is due to a range of factors, including the increasing inclination of customers toward shared services rather than ownership. The costs of owning vehicles including components, such as insurance, repair, maintenance, and depreciation, are more than the sharing of vehicles.
Furthermore, volatility in fuel prices is encouraging the users to switch to the shared transport, propelling the mobility-on-demand market growth.
Increasing government initiatives to implement these services in countries are expected to accelerate the mobility-on-demand market growth. The governments in various developed economies including the US and Germany are funding such projects to foster innovations and provide technical assistance to the industry players.
For instance, the Federal Transit Administration (FTA) of the US has signed an agreement with a national non-profit organisation, Shared-Use Mobility Centre (SUMC), to provision the successful implementation of these projects across the country.
The growing trend of adoption of electric and plug-in hybrid vehicles in shared transportation services is dominating the mobility-on-demand market. Increasing stringency of regulations regarding the emissions of hazardous greenhouse gases from the vehicles is compelling the drivers and fleet owners to opt for these environment-friendly alternatives.
Various automobile manufacturers are forming strategic partnerships with mobility-on- demand vendors to promote the use of electric or plug-in hybrid cars. For instance, Volkswagen UK formed a partnership with Zipcar to launch a new fleet of 50 Volkswagen GTE plug-in hybrid cars in London. These premium zero-emission cars encourage more people to choose electric instead of fossil-fuel-based cars.
Technological advancements and the emerging IoT trend are further propelling the mobility- on-demand market growth. Rise in the number of connected vehicles and the increasing penetration of smartphones are anticipated to drive the industry. Various government organisations are focusing on encouraging digitalisation for the overall economic growth.
Technological developments, such as autonomous and AI-enabled vehicles, are expected to revolutionise the industry. Innovations, such as electric vehicles and GPS-based navigation systems, are anticipated to fuel the mobility-on-demand market growth.
Inadequate transportation infrastructure is expected to hinder the mobility-on-demand market growth in countries including India, Brazil, and Mexico. Deteriorating conditions of road infrastructure discourage the commuters to travel by roads, thus challenging the growth of car rental market.
Furthermore, the integration of these services with the traditional transport infrastructure is an expensive and time-consuming process. Lack of awareness regarding these services is pushing people to use public transport extensively, hindering the industry growth.
The growing popularity of car-sharing services is expected to propel the mobility-on-demand market growth. Reduction in travel costs and emissions of greenhouse gases are some of the drivers of the car-sharing industry. Station-based car-sharing services currently sized at over 600 million encourage the commuters to walk, cycle, or use public transportation to the car-stations.
Technological advancements, such as smartcards, GPS tracking, and app-based reservation of cars, will drive the car sharing market growth, impacting the industry growth.
The mobility-on-demand (MOD) market in private applications is expected to witness a significant growth over the forecast timespan due to growing inclination of individual commuters toward shared services.
Increasing traffic congestion in urban areas is compelling the people to opt for services such as ride-hailing for running daily errands such as grocery shopping, thus propelling the ride-hailing market growth to reach over USD 100 billion by 2024. Increased convenience of booking these services through apps on smartphones and websites is further increasing the demand for mobility-on-demand market in private applications.
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